Despite widespread job cuts within the technology sector, recent research indicates that IT skills shortages continue to pose a significant challenge, leading employers to resort to above-average pay increases to fill the resourcing gaps.

These findings are part of the latest Robert Half Jobs Confidence Index (JCI), a quarterly report conducted in collaboration with the Centre for Economics and Business Research (Cebr), which offers a comprehensive analysis of the factors influencing confidence in the UK labour market.

The JCI’s technology snapshot in its most recent iteration reveals that although vacancies have declined due to redundancies across the sector, there are still approximately 52,000 unfilled IT positions on average. This suggests that skills shortages persist as a prominent obstacle for tech companies. Nevertheless, the sector has demonstrated resilience, with quarterly labour productivity growth increasing by 3.6 percentage points.

According to the JCI, average weekly earnings in the IT sector have risen by 8 percent year-on-year, reaching £1,146 per week. This marks the highest growth rate among all sectors, with IT salaries currently 80 percent higher than those in other industries. While the surge in earnings may be influenced by the prevailing cost-of-living crisis, the substantial disparity compared to other sectors suggests that pay inflation is predominantly driven by the ongoing skills shortages.

The layoffs have promoted career shifts

Furthermore, the data indicates that the recent wave of layoffs since the end of 2022 has prompted many professionals to transition into contract roles. The proportion of IT employees with temporary work arrangements has increased by 0.2 percent quarter-on-quarter.

These findings shed light on the complex dynamics within the technology job market. Despite the layoffs that have occurred, the demand for skilled IT professionals remains high, leading to persistent skills shortages. To attract and retain talent, employers have resorted to offering above-average salary increases. The trend of professionals seeking contract roles also suggests a shift in employment preferences within the sector.

As the technology industry continues to evolve, it is imperative for businesses to address these skills shortages effectively. Investment in upskilling and training programs, along with initiatives to attract new talent, will be crucial in meeting the demands of the ever-changing tech landscape. The insights provided by the Robert Half Jobs Confidence Index serve as a valuable resource for policymakers and industry leaders to navigate these challenges and foster a resilient and competitive technology sector in the UK.

Kris Harris, Regional Director at Robert Half, comments on the technology sector:

“It’s clear that despite the layoffs and general uncertainty that we’ve seen in the tech sector, demand for IT specialists is still outstripping supply. While firms are using financial incentives to source the skills they need – largely driven by the demand of candidates themselves – this isn’t a sustainable solution in what remains are tight economic landscape.

“The skills gap in IT has been prevalent for a number of years now, but as tech innovation continues at pace, now really is the time to take action before it’s too late for some businesses that will ultimately lose their competitive standing without the right talent. Diverse hiring will certainly play a critical role and initiatives need to be implemented quickly if this resourcing gap is to be closed.

“The Amazon Web Services (AWS) re/Start programme, which aims to upskill underrepresented or underemployed groups with the necessary skills for them to succeed in entry-level tech roles, is a prime example of a pre-existing initiative that delivers real results. Upskilling and reskilling talent where other functions are perhaps facing lower demand is also another viable option that needs greater focus.”





Amelia Brand is the Editor for HRreview, and host of the HR in Review podcast series. With a Master’s degree in Legal and Political Theory, her particular interests within HR include employment law, DE&I, and wellbeing within the workplace. Prior to working with HRreview, Amelia was Sub-Editor of a magazine, and Editor of the Environmental Justice Project at the University College London, writing and overseeing articles into UCL’s weekly newsletter. Her previous academic work has focused on philosophy, politics and law, with a special focus on how artificial intelligence will feature in the future.