As we enter 2024, the economic outlook is cautiously improving – and this should translate into an improving market for technology recruitment.

 

Volumes of tech recruitment in 2023 were lower than those seen in the post-Covid ‘boom’ years of 2021 and 2022 when there was an explosion of investment in technology solutions and, therefore, people. This doesn’t mean that 2023 was a poor year – it was more a case of the market returning to normal pre-pandemic levels.

 

Nevertheless, after the frenetic activity of 2021 and 2022, last year felt like something of a dip. In tough economic conditions, businesses became more cautious about hiring, while candidates also became more cautious about contemplating a move. However, there remained plenty of good mandates out there and some sectors such as energy were very active as they pushed forward with their Net Zero transformation plans. The market for contractors also remained strong, balancing out the tightening in permanent placements.

 

With a new year now beginning, there are signs that eye-wateringly high rates of inflation are behind us. There are hopes that interest rates will begin to fall. Cost of living pressures including spikes in the prices of energy and other key commodities may ease, bringing some relief to both consumers and businesses.

 

That is not to say that 2024 will be plain sailing. In what feels like the new normal ever since Covid struck, there are many uncertainties around. On the macro level, geopolitical conflicts such as the wars in Ukraine and Gaza are unpredictable and are likely to have continued commercial ripple effects - the recent disruption to shipping in the Red Sea being one example.

 

Then there is more ‘normal’ political uncertainty. In the UK, an election is expected during the year or in January 2025 at the latest. This may produce a period of ‘wait and see’ amongst some businesses in the months immediately leading up to the election, with some recruitment being paused or slowed down.

 

Most obviously, it is likely to have an impact in the public sector. This has been a big and steady recruiter of technology talent given the number of significant technology transformation projects at play to digitise public services. My hope is that any slowdown in public sector technology recruitment will be short-lived.

 

Globally, the election in the US will obviously be hugely significant. It would be a brave person to give any firm forecast of what will happen, however! More broadly, geopolitical tensions are likely to persist between the West and players such as China. The technology sector will be hoping that the situation regarding China and Taiwan does not deteriorate given the key importance of that small territory in producing so many of the chips on which modern devices depend.

 

In short, there are many unknowns and risk factors. However, I remain optimistic that 2024 will be a better year economically than 2023 and will therefore present more opportunities for talented technology professionals looking to move on to the next stage of their careers. The Big Tech players have reset since carrying out some resizing last year and look poised for growth again. Financial Services had a relatively quiet year in 2023, but as economic conditions pick up and financing conditions improve so too their resourcing needs are likely to grow.

 

Meanwhile, through our specialist Nash Squared business Spinks, we are beginning to see increased activity in the technology start-up and scale-up market with venture capital investment increasing.

 

Certainly, we know from our 2023 Digital Leadership Report, which surveyed over 2,100 technology leaders around the world, that talent remains high on the agenda – 54% of leaders said that a skills shortage is preventing them from keeping up with the pace of change, signalling an ongoing demand and need for tech talent.

 

I expect permanent recruitment to build again through the year as companies increase their investment in activity and people and as individuals become more confident about contemplating a move.

 

I also expect the contractor market to continue on the upward trajectory it has already established. The contingent workforce has become a key part of the mix for most larger businesses, and we’re also seeing ‘fractional’ roles appealing to growing numbers of individuals who are attracted by the idea of working for more than one employer. Could this be the way of the future as traditional career models change?

 

Another area I expect to be high on the agenda for Digital Leaders is the building and boosting of diversity in their teams. Businesses want to be more reflective of the wider society within which they operate. They also recognise that diversity of people leads to more diversity of thinking and, therefore, innovation. Certainly, this is an area where the technology sector needs to do better.

 

Our Digital Leadership Report shows that the representation of women in the technology workforce remains disappointingly low – only 14% of leaders and 23% of the workforce overall – while the proportion of those from an ethnic minority background is only marginally higher at 25%. Building more diverse talent pools and pipelines needs to be a continuing priority in 2024.

 

There are signs in our research that the growing return to offices and the reduction of remote working days could have a negative impact in some cases on the representation of women, so this is an area that needs careful managing. One area we haven’t yet seen having a major impact on recruitment – despite all the hype – is artificial intelligence and generative AI. I am yet to see a clear example of job losses because of generative AI. Obviously, that is one to watch – but I am hopeful that AI will create as many new opportunities for people, and expand the range and remit of their present roles, as positions it replaces.

 

Overall, there is a lot to look forward to in the technology talent recruitment market as the year gets underway. As economic conditions improve, clients will return to their agendas for growth which will inevitably have a technology element to it. Sourcing the right technology talent will be a key part of this as businesses move along their strategic journeys to achieve the objectives they have set.

 

Andy Heyes is the Managing Director for Harvey Nash UK&I, Central Europe, AUS & Spinks and is also a member of the Nash Squared Executive Leadership Team.

 

He has been working at Harvey Nash for over 25 years and has extensive experience working across all sectors and industries. Starting out in the contracts division of the London Office, Andy quickly progressed and was appointed as Managing Director for the UK South Technology Recruitment Business in 2020.

 

Under his leadership, the Harvey Nash business has successfully grown to what it is today. Andy believes in a very ‘human’ approach, focusing on developing people and ensuring our clients, candidates and contractor communities are at the heart of everything we do.