Sourced Quarterly Market Update – Summer 2022

Welcome to our fourth quarter update and review of 2022 ­ and what a year it was. We’ve been asked a lot over the past month how our year has been and how we’re feeling. In short, it’s been an unprecedented year of busyness and we’re all exhausted! We’re very much looking forward to a couple of weeks of well-earned rest over Christmas and New Year as it’s looking like 2023 is going to be more of the same.

Looking at the year as a whole, there is so much to cover. We’ve tried our best to contain this in the report by looking at what’s trending, who’s in demand, who’s moving and a general view of the market. We hope this is useful as an update to our Tech Shaper’s report which came out in September, and as always, we encourage you to contact us if you’re looking for any specific market intelligence. We’re in a really unique position to watch the market as it evolves and are always happy to share these insights.

General Comments

State of the Market

This year started with a bang and never really stopped. In the first quarter of 2022, we saw more attrition than we had possibly ever seen as a business. It seemed that just about everybody had moved jobs between December 2021 and March 2022. With this came the obvious knock-ons of a huge demand for permanent talent, ever-increasing salary demands and a market that was at its wit’s end to attract talent ­ all in the face of closed borders and a severe talent shortage.

Resourcing has presented a real challenge to meet these demands all year, and unfortunately, until we see an even greater softening of immigration policy, we expect these challenges to remain. While the great shift around has undoubtedly allowed a lot of candidates to take on promotion opportunities, new professional development and realign salaries after a very flat 2019/20, most will now be settled into these new roles for the next 2-3 years, meaning recruiting local talent becomes harder still.

With this retention holding strong, we are continuing to look further afield and are seeing a definite increase in international candidates wanting to relocate to the Canterbury region. The challenge is, however, getting them here.

Permanent Market Reigns

While 2021 was the year for the contractor, 2022 was definitely the year for permanent appointments. Candidates have been demanding, and successfully obtaining, higher salaries and are now viewing hybrid work as almost non-negotiable. The idea of a traditional ‘in-office’ role is just no longer seen as acceptable and this will continue to challenge employers who are slow to adopt it. As with 2021, many candidates moved despite not actively applying for new positions. By becoming more aware of the demand levels for their skills and strong market conditions, they are taking the opportunity when approached to move.

From a Sourced perspective, we have found this all very fractured. There has been no clear answer to hanging on to talent and plugging the flood of those shifting around. Increasing salaries didn’t at times seem enough, and there was simply an overall appetite to change it up and chase greener pastures.

We expect 2023 to be a year of review for employers, ensuring salaries are relevant to the new normal and placing culture and well-being front and centre. The hope is that recipe is right to encourage those who haven’t moved yet to remain.

All this permanent movement did see a definite softening in the contractor market, with contractors other than BAs taking longer to find assignments and tending to stay in them for longer. BAs, as always, have been the exception to the rule and demand has remained as high as ever.

Interestingly, we have not seen the same increases in contractor rates as we have seen on the permanent side, with BA rates being the only ones to lift significantly in response to continued demand.

Within Sourced Walls 

We were really pleased to recently both sponsor and attend the Canterbury Tech Summit and the New Zealand CIO Summit.

The CIO Summit in particular was an amazing opportunity to learn more about what is driving the IT Sector as a whole at the moment, and certainly, there were three key themes:

• Talent Shortage
• Employee Well Being
• Cyber Security

The CIO Summit was held in the amazing Te Pae Christchurch Convention Centre and what an amazing asset this is for our city. It was great to see local faces at the CIO Awards Dinner also, although we’re still unsure about Jason Gunn as an MC and Robbie Williams impersonator.

Who’s in Demand?

Demand is high right across the spectrum right now, with roles covering Infrastructure, Development and Professional Services. Permanent appointments are front and centre, Service Desk and Infrastructure featuring very heavily across the last quarter. Unlike previous years where new activity would now be ramping down as we approach Christmas, we are already locking in work to kick off in early January.

In the Professional Services space, we have seen solid demand all year across both operational and strategic BA work with demand for PM and Programme Managers beginning to return. The Test space has remained very quiet, including on the client side which perhaps shows a market that has bucked the trend and remained stable. Within Development, demand remains very steady in the .Net space, and with Cloud starting to emerge as a key demand area. We are also seeing this in the Infrastructure Space, with a lot now looking to DevOps, SysOps, AWS and Azure to ensure they are marketable in future.

General Round-Up

As with 2021, 2022 has again been the year of the candidate. There are opportunities available across most levels and skill levels and competition is extremely high among employers. Anecdotally, many employers are simply giving up and looking at different ways to deploy resources from within, bring professional services companies in or simply park non-essential project work. There is little to no chatter about the recession ­ this simply doesn’t appear to be a factor. We would counter the candidate availability point that if you lift enough rocks, there are gems to be found, so be kind to your recruitment partner. We are in a great spot to uncover real gems; it just takes time and effort.

Work/life balance, learning opportunities, growth and development and a positive work environment are still top on candidates’ wish lists, however, salary is now a predominant feature. We always expected this as salaries remained static across 2019, 2020 and early 2021, and in many ways, this was a long-due adjustment.

We will watch with interest as we head into the New Year, but until then, we would like to wish you all a very Merry Christmas. Hope you take the time to enjoy a relaxing break with family and friends over the festive season!