Atlassian, Amazon paying $300K for software developers leaving start-ups struggling for IT talent

A massive hike in wages for software developers is putting local start-ups under strain as big firms like Atlassian hunt skilled staff.

A massive hike in wages for skilled software developers and cybersecurity engineers is putting local start-ups under strain, with several executives warning they are unable to compete for talent.

Wage increases are being driven by Australia’s borders still being closed to non-residents, combined with heightened demand for cybersecurity services during Covid.

Start-up founders are reporting that wages have increased so much that they are now unable to compete for talent against well-funded foreign giants, and the strain threatens to slow the early lead of the nascent local cybersecurity sector.

Some reports are suggesting wages have increased by more than 30 per cent in just 12 months.

Cyber security executives said increased demand for skilled developers is pushing wages up to the point that local companies are having to rethink growth plans, as start-ups are outbid by well-funded international digital giants such as Amazon and Accenture.

SecureStack co-founders Guy Givoni and Paul McCarty say they are having trouble competing for talent.

“All my developers are being tempted right now,” said Paul McCarty, the boss of local start-up SecureStack.

“The rate we are paying them as a start-up can’t really compete with AWS, Atlassian and others offering more than $300,000. When the money comes calling, it’s hard to say no.

“One of my engineers was lured away even though he loves working for us. I told him I would counter – until I saw the offer, and then realised I simply couldn’t.”

The most in-demand roles include full-stack developers and software engineers, critical hires for most cybersecurity and technology start-ups, according to Mike Monnick, CEO of drone cybersecurity provider DroneSec.

“With Covid restricting travel, a lot of international talent is unavailable to us. Demand is growing while our local talent pool is getting more expensive, which ultimately impacts our ability to keep Australian drones and assets safe from attacks,” he said.

Sydney-based cybersecurity start-up Avertro is in a similar situation. Its CEO Ian Yip said he offered candidates generous packages and employee options, but global giants regularly swoop in and offer double the salary plus sign-on bonuses.

He said that in order to compete, local start-ups were leveraging their positive work culture, commitment to values, and finding innovative ways to retrain talent from outside the cybersecurity sector.

CyRise chief executive Scott Handsaker.

Chief executive of cybersecurity start-up accelerator program CyRise, Scott Handsaker said Australia needed to act swiftly to make it easier for technology workers either to return home or migrate here once borders reopen.

Australia’s closed border policy would likely soon come to an end but the damage to the industry could take longer to recede, he said.

“If we want to grow Australia’s cybersecurity sector, local start-ups need access to quality talent, without costs spiralling out of control.”

However, some start-ups are choosing to see the rising wages as a positive sign for the Australian cybersecurity ecosystem.

“I acknowledge there‘s a skills shortage, but this is what digital transformation feels like,” said Vaughan Shanks, CEO and co-founder of Melbourne-based cybersecurity start-up Cydarm.

“It’s a sign the Australian economy is transforming, and what we’re doing in cybersecurity and tech generally is valuable.”