The UK technology labour market is showing the green shoots of recovery after a torrid 12 months which saw the number of job vacancies plummet, a new report says.
Vacancies in the IT sector plunged more than 40 per cent in 2023 compared to the previous 12 months, as employers across the country tightened their belts amid uncertain economic conditions and rising interest rates during late 2021 and 2022 as the pandemic ended, the analysis shows.
However, in the first three months of 2024 there were 18,551 IT vacancies, a rise of nearly 16 per cent compared with the last three months of 2023 and 1.4 per cent up on the monthly average in 2023, when the market was significantly stronger.
The report on UK tech employment trends in the first quarter of 2024 has been published by Manchester-headquartered recruitment marketplace Hiring Hub. It is based on research by Vacancysoft, a provider of labour market data and analytics.
Information used to compile the report was gathered from the career centres of company websites and relates to unique job postings only, not duplicated ones.
Hiring Hub founder Simon Swan said:
“Last year’s job market slowdown, which saw over a 40 per cent reduction in IT and tech jobs from the peak of 2022, clearly left its scars.
“But there is good news to share: the green shoots of a mild recovery were visible in the first quarter of 2024, leaving me cautiously optimistic about the next few months as employers are clearly adapting to higher interest rates, tighter financial conditions and seismic technological shifts catalysed by AI.
“We definitely felt this temperature change at Hiring Hub, with March 2024 the best month for job uploads on our recruiter marketplace this year. While there’s still a degree of uncertainty around the economy causing obvious headwinds, the jobs outlook is gently improving and the sentiment should be one of cautious optimism after a tough second half of 2023.”
He added:
“Driving the rebound in IT jobs is a thawing of venture capital investment, as funders that were sat on the sidelines last year with dry powder to deploy seek high-quality start-ups and scale-ups whose growth they can fuel – jobs typically coming a few months downstream of each deal.”
London, which was particularly hard hit in 2023 as IT jobs there plummeted by more than 50 per cent, is the main beneficiary of increased VC activity, says the report. The capital and the south east combined accounted for more than 52 per cent of all IT and tech roles between January and March this year.
Nationally, there were more than 6,000 tech vacancies in February and March and only just less than that in January. March was the strongest month since August 2023.
The technology, media and telecoms sector accounted for 48 per cent of IT vacancies in the first three months of this year, followed by financial services on 22.7 per cent and consumer goods and services on 8.5 per cent.
The report says the trend of more jobs specialising in data has continued into 2024, as businesses look to integrate and exploit the opportunities which AI presents. This has meant the importance of data is more prevalent, leading to more jobs in this niche area.
Skills in greatest demand are IT development and engineering, IT management, infrastructure and support.
James Chaplin, chief executive of Vacancysoft, said:
“After the downturn in 2023, the signs are positive. As economic conditions pick up, so the IT jobs market has been taking shape, with London in particular being the biggest beneficiary.
“A big part of the uplift can be attributed to the pick-up in VC funding. If VC and private equity funding are indicative of where the market is going next, we believe that technology firms specialising in climate and ecology will lead the way. Funding into these businesses is now at record levels.”
Hiring Hub, which is backed by Manchester-based private equity house investor MonacoSol, connects employers with recruitment agencies to help them find quality candidates quickly.
https://www.hiring-hub.com/
https://vacancysoft.com/