CNA IT Salary Survey Q1-Q2 2021 Insights
During June-July 2021 CNA International IT was working on a new Salary Survey. There were several reasons for that:
- The market situation had changed considerably since late 2020;
- A combination of influential factors requires a closer examination to understand its long-term effects on the Ukrainian IT segment;
- The competition for tech talent requires up-to-date market data to facilitate effective employee retention and candidate attraction;
- There’s a need for thorough information about IT specialist’s salary levels, candidate expectations, and availability of various IT specialists on the market.
This article goes through the highlights of our research. If you want to read our full version of our Q1-Q2 study, contact us.
Q1-Q2 2021 Salary Survey Insights
Changes in the Ukrainian IT Segment
Q1-Q2 2021 saw several developments within the Ukrainian IT segment.
Transformations within the Outsourcing Sector
The Ukrainian outsourcing segment is expanding its reach and upscales its business operation. Q1-Q2 2021 saw:
- Hitachi’s acquisition of GlobalLogic;
- EPAM’s continuing growth and IPO;
- GridDynamics’ acquisition of Daxx;
As a result, outsourcing companies rack up headcounts to increase their capitalization potential. Big outsourcing companies have enough resources to compete for talent and offer bigger salaries.
One of the reasons why it happens is because the US IT segment is expanding. According to State of European Tech research, by 2030, the IT industry will constitute approximately 10% of the US economy.
This growth will further affect the world economy and the Ukrainian economy in particular. Interestingly, the workforce deficit will reach 4,3 million by 2030, with unrealized production approximating 449,7 billion.
Growth of the Startup Sector
While outsourcing companies think big and act strong, Ukrainian startups establish themselves within niches on the Ukrainian internal market and the rest of the world.
2020 saw a significant slowdown in startup development. Q1-Q2 saw Ukrainian startups getting numerous investments. During this period, investors’ focus shifted from high-concept startups to more pragmatic startups with product potential.
- Locad had raised $4,9 million in seed investments;
- Preply raised $35 million in Series B;
- Upshot raised $4,3 million in Series A;
- Scalarr raised $7,5 in Series A investments.
- People.ai raised $100 million in Series D investments and was evaluated at $1,1 billion.
Because of incoming investments, startups have resources to compete for tech talent. However, startup companies are willing to compete primarily for high-profile specialists – potential impact players who will bring the business to the next level.
More Foreign Companies on the Ukrainian Market
Another interesting development of Q1-Q2 is that foreign companies (Reddit, Lyft, et al.) were coming into the Ukrainian market without intermediaries and hiring specialists on their own. In the past, such companies relied on outsourcing companies to handle their proceedings.
Moreover, since foreign companies have more financial resources to fuel the recruitment effort, they can offer salaries far exceeding the Ukrainian companies. This factor increases the candidate’s salary expectations even further.
Demand growth for IT Specialists
Q1-Q2 2021 shows a continuing trend of the demand growth for IT specialists throughout the Ukrainian IT segment. As of late July 2021, the demand reaches its peak.
Compared with the previous year, this period saw a 20% growth in job postings on different platforms.
There were several reasons for that:
- Q1 2021 saw companies closing hiring gaps for lackluster 2020;
- Q2 2021 marked the shift toward business scaling and competition for high-profile tech talent.
As a result, we’ve noticed several trends:
- Increasing competition leads to rapid salary growth for IT specialists;
- Consequently, this development intensifies employee retention efforts via salary review and counteroffers.
- At the same time, the number of opportunities on the market motivates tech talent to change jobs more frequently.
To illustrate the demand for IT specialists, let’s look at DOU and Djinni job posting statistics.
DOU Q1-Q2 job posting statistics
- January – 8213
- February – 8077
- March – 9881
- April – 9365
- May – 9357
- June – 9240
- July – 10186
Djinni Q1-Q2 job postings/applications statistics:
- January – 5,31 \ 3,32
- February – 6,46 \ 3,19
- March – 8,57 \ 3,15
- April – 9,65 \ 2,77
- May – 9,95 \ 2,76
- June – 10,36 \ 2,8
- July – 12,2 \ 3,37
Next is the job change frequency. During Q1-Q2 2021, Ukrainian IT specialists were more actively changing jobs (34%, according to DOU). The reasons for changing jobs are higher salary, career progression, professional realization, and working on a personal project.
Salary growth is one of the most noticeable trends of the Ukrainian IT segment during Q1-Q2 2021.
During our research, we’ve found the following:
- Junior\Middle specialists 10-25% growth.
- Senior+ specialists – 30-40% growth.
- A counteroffer can provide a team lead with a 40% raise.
- C-level talent’s competitive offers and retention efforts led to a 50% growth pattern across the Ukrainian IT segment for C-level salary levels.
What causes this kind of salary growth?
- General competition for tech talent. IT specialists are the lifeblood of companies. Each high-profile specialist is a potential impact player with a game-changing solution waiting for realization. Because of that, companies are willing to offer more to entice viable candidates to their job openings. Unfortunately, this mindset made recruitment much more challenging.
- Employee retention via counteroffers. At the same time, such competition for talent makes employee retention a bigger priority. One of the most effective retention tools of the moment are counteroffers with higher compensation packages (i.e., higher salary, more perks, etc.). During Q1-Q2, we saw a number of companies rely on counteroffers with up to 50% salary increases for valuable talent.
These two factors generate momentum for the steady increase of the salary levels.
Lead Positions Salary Chart
C-Level Positions Salary Chart
Change of Job Search Methods and Candidate Expectations
The other significant development of Q1-Q2 2021 is the transformation of candidate’s job search approaches.
- Job boards continue to lose relevance. While it is possible to hire junior\middle specialists, hiring senior or lead-level talent is a rarity.
- Networking is becoming a preferred approach to recruitment in the Ukrainian IT segment (especially for senior-level candidates).
Demand growth made candidates more influential in the recruitment process. Candidates in the active job search can get 2-4 simultaneous offers on average.
- More offers lead to selectiveness regarding what kind of offers candidates are willing to consider.
As a result, the way candidates assess job offers changes.
Let’s look at what candidates prioritize when they consider job offers:
- Salary level
- Tech Stack
- Remote Work + Home Office
- Interest in the project
- Company appeal
Middle-level specialists prioritize professional development upon considering offers.
In contrast, senior and higher-level specialists are interested in career opportunities and self-realization when weighing the pros and cons of incoming job offers.
Recruitment in Q1-Q2 2021
As it was mentioned in the previous sections, the recruitment during Q1-Q2 2021 had become much more challenging.
While the mechanic aspects of recruitments haven’t changed significantly, getting the job done became an undertaking.
- Lack of market intelligence leads clients to misinterpret the market situation. The result: unrealistic expectations, unfeasible inquiries regarding recruitment, and short-term solutions without clear long-term plans.
Here’s an example of how this problem manifests itself.
- The company hires people for bigger paychecks while disregarding other engagement factors like culture fit, interest in the project, etc.
- However, when specialists take on the job based on the salary only – chances are he will not stick around upon receiving another “big money” job opportunity.
The other recruitment challenge is the result of growing competition for tech talent.
- Candidate nurturing takes more effort compared with the past. Candidates want as much information about the company as possible. If they decide to proceed with applying – it is going to be a well-informed decision.
- There’s a significant problem of candidates getting distracted by offers from other companies coming at the same time.
- The amount of communication with different recruiters is often overwhelming for the candidates. As a result, burnout is common and it often leads to candidates dropping off.
The other important factor in recruitment during Q1-Q2 2021 is the transformation of the recruiter workforce.
2020 saw numerous cuts and layoffs of the recruitment departments. Now companies try to recuperate. One of the ways is tighter cooperation with recruitment agencies.
The market is full of specialists with one year of experience and salary expectations starting with $2500. In addition, there are lots of junior-level specialists fresh off courses (over 60% of all candidates for recruitment-related positions).
Tighter cooperation with the recruitment agencies
Q1-Q2 also saw a tightening of the cooperation between companies and recruitment agencies. There are several reasons for that:
- The growing competition for tech talent,
- The need for up-to-date market intelligence
- Lack of recruiter workforce.
The combination of these factors led to the demand growth for recruitment agencies’ services.
Because of that, recruitment agencies have a significant competitive advantage in several areas:
- Market knowledge and understanding of what drives candidates and how to engage with them.
- Operational insight helps to optimize the recruitment\HR processes to maintain the company’s competitiveness in the market.
- Diverse networking allows finding fitting candidates faster and quickly gain much-needed market intelligence.
As a result, there is an opportunity for recruitment agencies to expand their services.
- Recruitment process outsourcing is a viable solution for companies that don’t have fully equipped recruitment departments.
- Employee training services is one of the ways companies can mitigate recruitment\HR workforce shortage and quickly develop the nascent departments.
- HR consulting can solve all sorts of human resources challenges – ranging from fine-tuning the workflows to developing employee motivation or recognition systems.
- Employer branding consulting can help with ironing out the brand message, adjust the company’s presentation to employee\candidate point of view, and present the company as a worthwhile employer.
- Market research – companies need more information regarding what is going on in the market (trends, salary levels, candidate expectations) to make well-reasoned decisions.
The demand for tech talent and salary growth will continue into Q3-Q4 but at a slower pace. Since the salaries grew 20-50% on average since January 2021, it is reasonable to expect further 10-20% growth until the end of the year.
To keep up with the competition – both product and outsourcing companies need to overhaul their value propositions and employee retention methods. We expect more flexibility and openness for negotiation to attract tech talent.
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