After years of being able to confidently demand massive pay packets from would-be employers, the landscape is starting to change, with some employers knocking back good candidates who have been asking for a premium on top of already high salaries, according to a survey from recruiter Robert Half.
On average, Australian tech professionals look for an extra 16 per cent on top of their initial salary offering – with just over a third getting what they ask.
But nearly 20 per cent of CIOs have taken the offer off the table when candidates ask for more.
This is all part of a changing balance of power for tech workers, according to regional MD of Robert Half, David Jones.
“As a result of high inflation and interest rate increases to control inflation, technology leaders continue to review team structures, strategically evaluating headcount,” he said.
That means using more contractors in order to “remain flexible” and is somewhat of a warning for tech professionals who are thinking about shopping around for more cash this year.
Jones said it was important for technologists to “consider what motivates them to move, beyond salary”.
“From late 2021 through to mid-2022, salary increases were often a primary lever used to attract and retain staff,” he said.
“However, it is already become more common for technology leaders to push-back on what they perceive to be unrealistic salary requests.”
Unsurprisingly, it’s people with the skills in highest demand who continue to have the bargaining power.
Cyber security specialists, developers, and cloud engineers are among those in-demand permanent jobs where asking for a bit more during negotiations could pay off, according to the latest Salary Guide.
Robert Half has also noticed ongoing high demand for DevOps and automation skills.
Low experience cyber security roles can pull in as much as $126,000 – partly because junior roles are difficult to find in an area that, while complaining about a lack of talent, is still wary about entry level positions.
For full stack developers salaries range from $104,000 to $140,500, while a business analyst might pull in $147,500 at the top end.
Are layoffs a copycat problem?
Since late last year, the biggest names in tech have been laying off staff en masse: 12,000 cuts at Google, 10,000 at Microsoft, 11,000 at Meta, 18,000 at Amazon, 7,000 at Salesforce – the list goes on.
But there has been some scepticism over exactly how effective these mass redundancies are.
Professor Jeffrey Pfeffer from the Stanford Graduate School of Business is especially critical of layoffs, calling it “an instance of social contagion”.
“If you look for reasons why companies do layoffs, the reason is that everybody else is doing it,” he said.
“Layoffs are the result of imitative behaviour and are not particularly evidence-based.”
Pfeffer points to the negative cultural and health impacts downsizing has, including his own research from 2016 which warned that the way companies manage their workforces adds strain on healthcare systems and can directly cause deaths.
But for all the harm layoffs cause – such as increasing the risk of suicide – Pfeffer claims there is often little benefit for the organisation since the company will often end up re-hiring staff further down the line anyway.
“Layoffs do not solve what is often the underlying problem, which is often an ineffective strategy, a loss of market share, or too little revenue. Layoffs are basically a bad decision,” he said.
“Companies sometimes lay off people that they have just recruited – oftentimes with paid recruitment bonuses.
“When the economy turns back in the next 12, 14, or 18 months, they will go back to the market and compete with the same companies to hire talent.
"They are basically buying labor at a high price and selling low.”