Jobs shrinking and applications are rising as recruiters regain the upper hand

The tech jobs market is cooling, say recuitment experts, because employers are increasingly unlikely to match expectations of large salaries.

New data suggests an end to the current candidate-centric market.

Job seekers are beginning to lose the upper hand and new data shows the number of advertised jobs is beginning to shrink while applications per role are on the rise.

In the first quarter of this year, the number of job applications per role had almost doubled compared with the same period in 2022, according to a report from JobAdder.

The recruitment software company said the new data reflected a shift away from recruiters actively reaching out to applicants and now require applicants to actively apply for new jobs.

JobAdder found that, on average, companies which used its software had opened five fewer roles in the second quarter of this year compared with the first quarter. Over the same period, permanent roles dropped 4.7 per cent while temporary roles 1.7 per cent.

IT recruitment business W Solutions founder Patrick Wong said demand had changed significantly and his workload was about quarter of what it was this time last year.

“Back then I was handling 20 jobs at any one time by myself but over the last six months it has been one job per week,” he said.

“While this is part of the recruitment cycle, I would imagine the market would stay like this moving forward for at least the next few months.”

The current situation looked similar to what the recruitment industry saw after the GFC in 2008, Mr Wong said, and resembled the first few months of Covid-19 when many workers were stood down.

“In 2021 it began to pick back up and in 2022 it was ridiculous. It was like what real estate agents had experienced over the past few years. The market was absolutely booming and people were raking it in,” he said.

The busy periods for recruiters are typically between Australia Day and April followed by a slight slowdown heading into the end of the financial year. Mr Wong said the market tended to pick back between August and October before cooling off before Christmas.

Many employers were struggling to keep up with the market-rate roles in tech, and many refused to hire talent on the salaries which resembled the wage paid to older managers who had been with the company for years, Mr Wong said.

“I’m constantly telling clients right now that they’re around $20,000 to $30,000 under the market rate for what they want,” he said.

“They often turn around and say they can’t afford more because that’s what they’re paying the manager of that department.”

Neal Woolrich, director of HR advisory at Gartner, said he’d seen a similar struggle despite the easing of the labour market

“We’ve seen it for a couple of years now and it’s been reasonably common to see people being poached for a 50 per cent premium or in some circumstances a doubling of their pay,” he said.

“However, we are seeing an easing of the labour market, especially in tech, but there is still not enough skilled talent in critical roles.”

Mr Woolrich said Gartner had been focusing on how employers could “attract and retain without having to rely as much on compensation” which was, he said, “where the war for talent has primarily been fought for the past few years”.