A 2024 Snapshot of Auckland's Tech Job Market

The aftermath of restructures, hiring freezes, and redundancies in 2023 has left many professionals feeling underwater and overwhelmed with workloads, fostering a growing interest in exploring new career opportunities. Stepping into 2024, the industry anticipates increased movement in the job market, with candidates seeking roles that offer higher remuneration and improved benefits.

Movements in the Executive Suites

The close of 2023 witnessed a significant reshuffling in executive suites, ushering in new CEOs, CIOs, COOs, CTOs, and CFOs. Traditionally, these leadership transitions signals a period of 3 to 6 months marked by careful observation and strategic planning. Following this, a subsequent 3 to 6 months typically ensue, characterised by decisive actions, the introduction of innovative processes, and a thorough review of project priorities and direction.

Considering the timing of these leadership changes toward late 2023, it positions us squarely in the midst of this transformative phase throughout 2024. This period is likely to be marked by substantial movement in the job market, potential initiation of new projects, potential closures of existing projects, and a noteworthy flux in employee dynamics. Organisations can anticipate a cascade of changes, as the new leadership teams work to imprint their vision and steer the company toward new horizons.

Restructures

While the frequency of these restructurings has decreased compared to the previous year, some organisations are still undergoing these phases. Financial reasons are often at the core of these strategic shifts.

These restructurings, while not industry-wide, tend to be targeted at specific departments within organisations. In contrast to the broad impact felt across the tech sector in 2023, recent trends indicate a more focused approach. Notably, entire Testing departments have recently been facing the repercussions, with projects being halted, resulting in a substantial influx of skilled professionals entering the job market.

Candidates Availability

Organisations in New Zealand continue to grapple with a pronounced shortage of candidates who not only align with their culture and values but also possess the specific skill sets required, notably in areas like Data, AI, Cybersecurity, and with unique Tech stacks.

What adds to this challenge is the consistent trend of professionals seeking opportunities abroad, particularly in Australia and the UK. On the other end, existing immigration laws present formidable obstacles, creating a challenging relocation process for candidates willing to enter the country. This contributes significantly to the still existing skills gap in the Tech sector.

Work Flexibility and Hybrid Working

Companies are currently reassessing their policies regarding hybrid and flexible working arrangements. A noticeable trend is emerging with more organisations opting to revert to the pre-COVID model of 5 days in the office. This shift has triggered disruptions and an uptick in the number of employees actively seeking new roles that offer greater flexibility. The evolving dynamics in workplace preferences underscore the need for companies to navigate this transition with thoughtful consideration to maintain a motivated and adaptable workforce.

Contractor vs. Permanent Employment Base

The trend observed in 2023, favoring permanent positions over contract roles, persists into 2024, reflecting a strategic shift in organisational preferences. Many companies, drawing inspiration from larger entities, are opting to transition towards a more permanent employee base. This shift is rooted in the desire to internalise and retain crucial knowledge, ensuring the sustainability of projects and the cultivation of new practices within the organisational framework.

Furthermore, the move towards a permanent employment base aligns with financial considerations. Companies are finding it economically advantageous to invest in upskilling their existing workforce or augmenting it with new talent, rather than relying on contractors for short-term fixes. This strategic investment allows organisations to create a skilled and cohesive team, promoting a culture of knowledge-sharing and innovation.

However, it is essential to recognise that, like any investment, the return on this strategic shift takes time. The financial benefits, cultural enhancements, and project sustainability achieved through this approach contribute to the organisation's resilience and long-term viability, making it a holistic investment in the future.

Contractor vs. Vendors

Organisations are increasingly favoring external vendors over independent contractors to streamline project management. This shift offers advantages such as comprehensive project oversight, access to previous projects data, and reduced administrative overhead. However, this approach introduces risks, including potential skills gaps, challenges in controlling project timelines, and unforeseen financial implications.

Moreover, recent industry events, such as the acquisition of Vmware by Broadcom, are expected to influence services prices from vendors and Managed Service Providers (MSPs). These may prompt organisations to conduct strategic reviews, driven by financial considerations. As a result, businesses will likely assess the overall cost-effectiveness and benefits of the vendor model, ensuring adaptability in a dynamic market while managing potential increases in service prices. Striking a balance between efficiency, financial prudence, and organisational control becomes paramount in optimising project success amid these evolving industry dynamics.

Salaries and Rates

While decision-makers have indicated a willingness to entertain rate and salary increases, our 2024 Salary Survey signals a potential misalignment with the rising cost of living. This discrepancy could result in market frustration among professionals, triggering a inclination to explore new opportunities that offer more competitive remuneration packages.

The evolving landscape, influenced by factors such as industry events, strategic shifts towards permanent employment bases, potential transition from vendors to independent contractors, and the ongoing waves of candidates exiting the country is expected to contribute to notable changes in the job market. From extensive discussions with clients about upcoming projects, five-year strategies, and market trends, there's a growing expectation of a significant market shift.

This shift is likely to tip the balance in favor of candidates, granting them increased bargaining power. Consequently, we anticipate a potential rise in salary and rate expectations heading into the 2025, similar to the increases observed in 2022. Professionals navigating the tech job market should remain vigilant and adaptable in the face of these anticipated shifts.

As Auckland's tech job market undergoes significant shifts in 2024, professionals and organisations face dynamic challenges and opportunities. From restructures and leadership changes to evolving candidate availability and strategic shifts towards permanent employment bases, the landscape is transforming. The rise in vendor utilisation brings both advantages and risks, influenced further by industry events. Anticipating these changes, I welcome you to connect for a personalised and comprehensive discussion over coffee or an online catch-up.