The last six months have brought mass job cuts in the tech sector. For instance, Amazon has laid off 18,000 employees, Meta 11,000, Microsoft 10,000, and Twitter 3,740. And these are just a few of many examples. Consequently, hundreds of thousands of developers have become unemployed, which means that at least some of them have started looking for new jobs. So, is the programmer shortage era now officially over?
The demand for experienced tech professionals remains high. Many companies, including small tech businesses and businesses in other industries, keep hiring developers since there is still a lot of tech work to do, and AI-based solutions like ChatGPT aren’t yet sophisticated enough to replace programmers. This means the tech job market is still tight, and finding the right talent is just as challenging as usual.
Meanwhile, the success of IT product and service companies depends on hiring highly qualified tech specialists. To thrive and compete in the current market conditions, these companies should think carefully about their recruitment strategies and embrace new approaches to hiring.
This article examines the tech candidate market and explains where to hire the best specialists to overcome IT talent shortages.
The tech talent shortage: How bad is it today?
The expectations of a possible global recession have shaken the tech industry, forcing many businesses to go for workforce reductions. But while the recent spate of layoffs is noticeable, it’s not extreme enough to change the global market: there is still a huge talent shortage.
For example, the US, the current leader in tech, accounts for over 100,000 of all unfilled IT jobs. A Korn Ferry report suggests that the country could lose out on $162 billion worth of revenue annually unless it finds more tech specialists. Meanwhile, Grid Dynamics reported that, according to the US Bureau of Labor and Statistics, the shortage of software engineers in the country will exceed 1.2 million by 2026.
The lack of local tech experts has led to increased competition for available talent, turning IT into the best-compensated sector with sky-high salaries. In the US, the median salary for computer programmers is around $110,140 a year, which is way more than salaries for non-tech professions.
But what about other countries?
Venture capital investment in UK-based tech startups increased by 130% from 2020 to 2021. This led to enormous growth in tech vacancy numbers, from 145,000 open jobs in 2021 to 181,000 in mid-2022 (24.14% growth rate). Out of 550 UK tech employers in a survey, more than half stated that candidates lacked the right technical skills to fill open positions.
Meanwhile, in Switzerland, the ITTA, an IT training company, estimated that the country will likely face a great shortage of IT professionals in the labor force by 2028 when they will need more than 117,900 experts.
In general, these figures indicate that hiring qualified local tech talent is becoming more difficult. The other side of the coin is that when you find the right fit, hiring may be too expensive due to high demand and low supply, and may be beyond the company’s budget.
These new realities are leading to changing hiring trends. Let’s take a look.
Hiring trends in the tech market
Economic uncertainty, The Great Attrition, and momentum for massive digitization have made competition for tech talent fierce. Traditional hiring no longer produces desired results, pushing companies to seek new strategies to fill tech positions.
Here are the hottest hiring trends in the tech industry that could help you attract top talent.
Quality hiring over fast hiring
Companies now take a more strategic approach to hiring. To embrace labor market volatility, they create a strategy, invest in employer branding, and make the hiring process more transparent.
Businesses pay more attention to a candidate’s soft skills and adaptability instead of searching for deep specialists whose skills may no longer be in demand in a few years. Hiring entities increasingly use nontraditional interview questions and pre-employment testing to assess candidates’ critical thinking and ability to learn and adapt beyond their job responsibilities.
Shift towards more flexible work
The last few years have brought a change in recruitment patterns. Now, companies are more willing to adapt to candidates' needs when they find specialists with the right expertise who can contribute to the company’s success.
Offering flexibility to candidates means offering remote working opportunities, hybrid work, and flexible hours. A Gallup survey in June of 2022 found that eight in ten people worked in a hybrid environment or remotely.
But what about flexible hours? Monster’s 2022 global report revealed that 49% of US and 48% of UK recruiters stated that flexible work schedules helped them retain talent. This is no surprise since at least in the UK, flexibility is the top priority for candidates, according to LinkedIn’s latest Talent Trends in the UK report.
More openings for temporary jobs
Hiring temporary tech workers has become the new norm within the past few years. In 2019, temporary contract workers outnumbered permanent staff at Google — the company hired 121,000 temps, compared to 102,000 full-time employees.
Why the change? By hiring temporary contractors, companies can:
- Quickly react and adapt to fast-changing market requirements
- Supplement their workforce during sudden peak periods
- Fulfill highly specialized, niche roles that require deep expertise
- Bring fresh perspectives and new ideas to tired projects
Hiring temps is much quicker than onboarding a permanent employee. Companies usually do this through recruitment agencies that take responsibility for checking references, interviewing, and shortlisting the best candidates.
And hiring temporary workers lets companies determine whether someone is the right fit. If so, they may become full-time employees.
Remote work has become more popular with today’s workforce. But it also brings value to businesses. Hiring remote employees lets companies work with developers from anywhere in the world rather than be limited to a specific geographic location. 71% of IT decision-makers said hiring remote workers provides access to a wider talent pool, which is important given the competition for skilled developers. And 52% said it makes recruiting developers with niche competencies easier.
Hiring remote developers also saves companies money on overhead, such as office space and equipment. In addition, remote programmers may work more efficiently in an environment that suits them and where they can avoid certain distractions and interruptions that often occur in office settings.
Another advantage of embracing location independence is that nighttime for some staff is daytime for others, allowing companies to have round-the-clock availability of developers. This can be particularly beneficial for organizations that operate in multiple time zones.
So if a location isn’t an essential attribute, the question is, where do you find excellent tech experts? Let’s take a look at the options.
Where to find tech talent: Markets with the biggest talent pools
Hiring and working across borders is no longer an exception; instead, it’s a proven trend across many IT companies. A location-independent approach lets them attract a broader talent base and faster mitigate talent gaps.
Here are the regions and countries with the most prominent talent pools.
Transcaucasia, located on the border of Eastern Europe and Asia, has a relatively new tech market and hasn’t penetrated various IT rankings yet. Still, it boasts a big pool of developers and immense opportunities for foreign tech companies. Countries like Armenia and Georgia encourage IT sector growth and create favorable opportunities for conducting international business operations.
Armenia, for example, has strong university programs specializing in IT and offers excellent R&D capabilities in engineering and computer science. The country is home to global companies like the photo and video editing app Picsart, and noise-removal software Krisp, which proves that Armenian engineers possess strong practical skills on top of education.
As for Georgia, the country strongly supports technological innovation and houses startup workshops and international conferences. A high level of tech education paired with a 5% flat rate tax for international and local IT companies working for foreign entities has attracted global companies like EPAM and Rakuten Viber to open offices in Georgia.
> Average software developer salary in the Transcaucasian region: $27 000/year
Central and Eastern Europe
Central and Eastern European (CEE) countries are well known as big tech hubs with a large talent pool, convenient time zone differences, and a perfect cultural fit. They have high scores for programming skills in HackerRank and SkillValue rankings.
At the same time, in Central and Eastern Europe, a developer's average salary is far lower than in Western Europe or the USA due to economic and sociopolitical differences. This makes it the perfect market to find specialists in web and mobile app front-end and back-end development.
According to the Global EF Index, countries like Romania, Poland, Moldova, Bulgaria, and Ukraine have moderate to very high English proficiency. Here’s a closer look at each country in this market.
· Ukraine is a country with a large talent pool of 285,000 IT specialists who perform high-quality software development for companies around the globe. It’s home to world-renowned start-ups like Grammarly, People.ai, Revolut, and Petcube. Ukraine was recognized as the Delivery Destination of the Year by the Global Sourcing Association (GSA) in 2021.
· Poland scored 98 out of 100 at HackerRank’s Global Coding Olympics and has a large talent pool of 250,000 skilled specialists. According to IBISWorld, the software development market size in Poland is now worth €8.1 billion, ranking seventh among EU countries. The country also ranks first among the fastest-growing European developer communities, according to GitHub.
· Romania also has one of the largest pools of developers in CEE. In 2021, its tech startups received over €100 million in investments. In addition to having high English proficiency, Romanian developers also speak at least one additional foreign language — French, Hungarian, or Italian.
· Moldova’s universities graduate 2,000 tech students each year, many of whom speak English and two or three other foreign languages, among them German, Italian, French, and Romanian. The country has a considerable talent pool of 29,600 tech experts, favorable tax incentives for IT professionals, and enormous support of the IT industry from the Moldovan government.
· Bulgaria has flat corporate and personal income taxes of 10% each, half as much as the average rate in EU countries. HackerRank says Bulgarian developers rank as the second and third most experienced in Java and Python. No wonder companies like Microsoft, IMB, Hewlett-Packard, and Oracle chose the country to open their R&D offices.
According to Coursera’s 2022 Global Skill Report, learners in Ukraine and Poland are among the top ten in the world in terms of competency on cutting-edge technology assessments. The report states that other countries with the most qualified learners include Bulgaria, Hungary, Romania, and Czech Republic, which are also located in the CEE region.
> Average software developer salary in CEE countries: $23 000/year
The Middle East is another region where you can hire skilled programmers. When it comes to tech talent, Turkey leads the way among Middle East countries. Software engineers from Turkey have been behind numerous successful tech companies, including the collaboration tool Zeplin, the online learning platform Udemy, and the fintech platform Lyzico (acquired by PayU).
The country has a big talent pool of more than 150,000 developers, which is constantly growing as tech students graduate each year. Last year, Microsoft opened an R&D center in Turkey, which was quickly followed by Amazon’s announcement to invest $100 million in opening a logistics center in Istanbul.
The rapid growth of investment in the Turkish tech sector has put Istanbul alongside European tech clusters like London, Paris, and Berlin. However, the depreciation of the Turkish currency, the lira, has forced many developers to look for remote work in international companies.
> Average software developer salary in Turkey: $16 000/year
> Most popular programming languages: C#, Java, Node.js, .NET
Western Europe isn’t as popular for developer recruitment as the CEE region, yet it also has much to offer in terms of a high-quality tech workforce. While leading tech companies in Europe struggle to fill their own tech positions, countries like Portugal don’t seem to face this trouble. The country has become a major tech hub in Europe thanks to the continuous flow of tech talent from Portuguese universities.
Portugal houses many international corporations, including Google, Zalando, and Amazon, and holds one of the major international tech events: Web Summit. The country ranks 9th of 111 countries in the English proficiency index and takes the 25th position in The Best Countries for Business listing from Forbes.
> Average software developer salary in Portugal: $22 000/year
> Most popular programming languages: PHP, .NET, Python
The global talent shortage and inflated prices for local developers have made many companies look beyond their borders to hire tech professionals at more affordable rates. The second half of 2021 showed a whopping 286% increase in tech hiring from Latin America, making LatAm programmers one of the most requested around the globe.
What drives this high demand?
The main convenience lies in Latin America’s workday overlap with North America. In addition, according to Statista, people from Chile, Argentina, Bolivia, and other countries of the region have upper-intermediate English level proficiency. The fact that the majority of the region’s population speaks Spanish is also a big plus since it's the second most spoken language in the US.
In Coursera’s 2020 Global Skills Index Report, Argentina and Chile scored highest among Latin American countries in data science, with competitive skills in Python, SQL, and NLP. The Chilean government actively promotes tech talent education and growth to position the country as an exporter of technological services.
> Average software developer salary in Chile: $49 000/year
> Most popular programming languages: PHP, ASP.NET, Java, Python, Node.js, Perl
It looks like the above countries are bourgeoning with available tech candidates. But navigating through unknown markets may be difficult. Let’s look at the challenges of hiring developers from abroad.
Challenges of finding tech talent in a global market
Looking for offshore tech candidates pushes software companies out of their comfort zone. Given the particulars of foreign markets, the hiring process may take much longer than expected, leading to revenue loss and threatening your business’s continuity.
Knowing the problems is half the battle. So here are the most common challenges software companies may face when looking for talent offshore.
Sourcing quality candidates. Researching, identifying, and engaging with tech professionals is a long process. And for candidates who live in different countries and time zones, it may even take longer. Besides, sourcing activities usually focus on developing and building a talent pipeline, which eats up too much time when you only need to fill one or several positions.
Screening and assessing candidates. Monster’s 2022 global report states that evaluating candidates during the interview was the biggest challenge for employers in 2021. Unlike programming skill assessments, soft skills are tricky to measure, though they play a vital role in building dispersed teams.
Language and cultural barriers. If you and your potential candidates don’t communicate well in the same language, it can cause misunderstandings during the interview process and pose obstacles to correctly assessing candidates’ soft skills. In addition, people in different cultures often have different business etiquette, interpretation of gestures, and symbols. For instance, an innocent “thumbs up” may be a sign of approval in some countries and may convey something rude to people from Italy, Greece, Iran, and Iraq.
Time zone differences. Dealing with time zones can be tricky, especially when scheduling job interviews. Setting up late-night interviews or, worse, skills tests, may put some of your candidates in the unfavorable position of performing when they’re not at their best. This can result in unfairly inaccurate assessments of candidates and their skills.
Labor laws and tax regulations. Staying compliant with laws and regulations is the trickiest thing when hiring internationally. The employment law landscape changes quickly, making it challenging to foresee all the nuances of complying with a country’s rules. This includes requirements to establish a legal entity when employing abroad, compensating in local currency, dismissal rules, and obtaining a required work visa or permit to name just a few of the complexities.
Finding the right fit. With so many countries and options in the market, identifying a candidate who’s the right fit for your company or project can be a real challenge. Where to start? What country will offer the best fit? These and other questions can cause headaches for IT company leaders.
As more companies turn to remote hiring, finding the right tech talent abroad may prove quite difficult, especially if you’re trying to do it on your own.
How working with a recruitment agency helps overcome hiring challenges
Hiring a recruitment agency that specializes specifically in finding IT talent, like Indigo Tech Recruiters, can help you reduce your search time and supply your team with the tech specialists you need. Our company has a huge talent base that includes more than 300,000 tech professionals from the markets described above.
We have your back with a variety of services, including
- Sourcing and screening candidates
- Coordinating and scheduling interviews
- Navigating the legal and regulatory requirements of hiring foreign workers
Once you sign an agreement with us, we start a search and submit the first set of suitable candidates for your approval within approximately one week. Those candidates have already completed our interview process and are ready for your consideration. In the event that a search takes more time because of specific requirements or hard-to-find skills, our recruiters always provide weekly reports to keep you updated with the search progress on each position remaining unfilled.
After we submit the first three candidates to you, we ask you to pinpoint the requirements and create job offers for candidates selected for hire. In approximately six weeks, the chosen candidate will start working at your company.
What if the candidate fails to pass the probation period? Don’t worry. We’ll source another suitable candidate for you, free of charge, under our warranty period, which is three months from the job start date. On top of that, we offer loyalty programs for our long-term partners..
Despite the recent massive layoffs, there is still the scarcity of tech talent in countries like the US and the UK. Naturally, this poses challenges to finding software developers and threatens the growth of IT product and service companies.
The tech talent shortage has made companies rethink their hiring strategies and offer more flexible working conditions. This has led to an increase in openings for temporary jobs, remote work, and global hiring strategies. The latter gives companies access to a broader talent base and mitigates talent gaps expeditiously at a lower cost.
But navigating foreign markets can be challenging because of local legislation, cultural peculiarities, and time zone differences. Luckily, hiring a tech recruitment agency can help you overcome all of these challenges and find qualified candidates for your team.