Wage inflation in the IT jobs market, is it time for a pay rise?

At Elwood Roberts we hear daily ‘I am looking to leave because I want a pay-rise’! The market has gone up by over 20% in 2022 and only getting higher as inflation continues to spiral out of control.

So, the big question remains, why didn’t they get a raise?

Right now, there is a miss-understanding in the Irish markets. There are increasing numbers of candidates who feel they are underpaid in the IT sector, but across the board and they can get a substantial increase if they move job. So, we want to cover off why that is?

IT jobs salaries

Here are 5 reasons why IT job salaries are going up:

  1. Inflation
  2. Cost of Living
  3. Friend moved and got more money
  4. Media Messaging, like this one ☹
  5. Miss-leading Articles.

So, what’s the truth? Companies have salary budgets, complex salary brackets, and an existing workforce benchmark system for fairness within the company. If a business breaks their own grade, takes on a new employee outside the salary band, what’s going to happen (cause employees will find out, they always do) – you will have a very upset team. A proper head ache for HR folks, lets be honest.

I’ve seen this happen on more than one occasion. Some let people leave or be upset, others matched the salaries at review time.  For me, adjusting the overall grades would be the smart play.

If you look at any overall market trends in Ireland, not just the Tech sector it does show relative consistency when it comes to salary growth over the last few years. The Tech sector for example continues to see organizations experiencing rapid growth, over 60% of companies in the sector expect to hire in 2023. But there are large firms freezing recruitment. Which might just halt the wage inflation that we have seen between 2020 and 2022. That 60% hiring will continue to drive a talent war, which in turn did create salary increases in some cases over 25% for those who have not moved in let’s say 3 years, for those jumping every 12-18 months they won’t see close to this kind of rise in the near future.

It would seem we are at the end of a wave, and there is still some adjusting to be done when it comes to expectations. We have gone into more details on the IT sector in this blog, so please check it out.

I don’t think we will see some mass employment recession in 2023 like many folks are commentating, we will see the bigger boys lose people such as Meta and not be replaced within the business, as I mentioned in a previous article, I believe the tech sector will still expand businesses hiring will need to continue to fight for tech talent.

Whilst Inflation and Cost of Living aren’t going away, I think the tech employment market in Ireland will remain busy and there will be no shortage of jobs.

Salaries will trend sideways for some, so if you have an eye on the market purely for financial gain do your homework, speak to your management team and recruiters such as Elwood Roberts.