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The IT market is experiencing significant growth. The beginning of the year was greeted with a correction, not the first one in recent years. Let's talk about the current market situation compared to the previous year. Were corrections expected?
The answer to this question is not black and white. On one hand, many indicators suggested that we could expect a slowdown, but on the other hand, it was uncertain. The outbreak of the war in Ukraine had a significant impact on the European market - technology companies were hesitant to establish their hubs in Eastern Europe, not just in war-torn countries but also neighboring countries like Poland. Moreover, the energy crisis related to the armed conflict had an impact on almost the entire Europe. Given this situation, a correction in our region was foreseeable. On the other hand, many IT project managers were aware of the numerous planned investments, making it challenging to predict the outcome definitively. Additionally, the banking situation in the United States also played a major role in the global correction. As many of us know, Silicon Valley Bank, a major financier of tech startups, collapsed in March 2023, leading to a financial setback for many startups. This bankruptcy, with over $209 billion in assets, became the second-largest in U.S. history after Washington Mutual's collapse in 2008.
SVB was the largest source of financial support for startups, especially those expanding beyond the U.S., and losing their financial base forced them to halt their projects and expansion into other countries. Consequently, IT recruitment was put on hold. It's not the only bank facing such a situation. Another event that impacted the market was the acquisition of Credit Suisse by UBS , creating a Swiss banking giant.
The problem of mass layoffs mainly affected the major tech players, particularly those operating in the United States. These companies previously based their recruitment strategies on the needs of long-term projects, but now they rely on short-term plans. Amazon laid off 27,000 employees, Alphabet Inc. - 12,000, Disney+ Hotstar - 7,000, Meta and Microsoft - 10,000 each, Dell Technologies - 6,600, PayPal - 2,000, and Yahoo - 1,600.
Although layoffs in the industry occurred in the previous year, the scale was not as significant as the current one. However, we must remember that the current economic situation, high inflation, and disrupted supply chains due to the energy crisis related to the conflict in Ukraine will have a major impact on 2024.
The market correction also affected IT recruitment agencies, leading to many recruiters being laid off due to the lack of active projects and cost concerns. Fortunately, Yard Corporate, as a company mainly working with large clients experiencing strong growth, didn't feel the impact as strongly as other agencies. Nonetheless, many agencies still feel the consequences of the massive layoffs in the IT industry.
The first and second quarters of this year saw market corrections and a wave of layoffs. The holiday months are expected to bring some stabilization, leading to a much-improved fourth quarter. From the agency perspective, we usually experience a slight slowdown during the holiday season due to vacations, which is a normal occurrence.
The overall economic situation significantly influences the market. If there are no global crises, adverse developments in the war in Ukraine, crashes on the American stock exchange, or the outbreak of another armed conflict or pandemic, the beginning of the year should be a very good time for the industry to finally return to stability or even experience higher demand than before. However, this all depends on various factors that we can't control. It's also worth noting that many companies are investing heavily in expanding their departments in Poland. For instance, Microsoft recently announced the opening of its first data processing center in the region, which will require over a billion dollars in investment. This will lead to a high demand for specialists in this area, and many other companies are also placing their new investments in Poland. Therefore, despite everything, it seems that the new year will pleasantly surprise us!
Additionally, we should emphasize that the IT industry is incredibly dynamic - the development of quantum computers and artificial intelligence will generate a demand for new specialists. While AI may replace jobs in certain areas, more employees will be needed to operate and maintain it, leading to a significant increase in demand for technological specialists.
Like last year, the most sought-after specialists are in the Software Development area, particularly those with experience in big data. The highest demand is for Backend Engineers (especially in technologies like Java, Python, and .NET), Frontend Engineers (with TypeScript and React), and DevOps Engineers (with a focus on technologies like Docker, Kubernetes, and Jenkins).
Since the beginning of this year, we have also witnessed growth in offers related to Cloud and Security - Cloud Engineers (AWS, GCP, Azure), Cloud Architects, Security Engineers, and Penetration Testers.
Security Engineers are specialists who focus on ensuring security, such as data security in companies. They monitor security, analyze logs, and use forensic analysis to detect security incidents. The significance of this role continues to grow due to the increasing migration of services to digital space. The number of cyberattacks is rising, and more companies are promoting advanced data protection campaigns.
DevOps Engineers, on the other hand, are responsible for automating the software development and infrastructure management process, combining software development (coding) with infrastructure maintenance (administration).
Currently, foreign giants are investing in Poland, such as Microsoft with a billion-dollar investment, Kainos with a £1 million investment in a new office in Gdańsk, Concentrix opening a Software Solutions center in Kraków, and Godel Technologies Europe opening a new office in Białystok. How will this impact employment and which specialists will be in demand?
These are not the only foreign companies interested in our market. We are currently recruiting for companies from Israel and Dubai, which will enter Poland no earlier than next year. These are companies working with cutting-edge technologies, employing thousands of employees, mainly in the big data and security areas.
Poland is an attractive market because we have excellent specialists who are significantly more cost-effective compared to those in the West or the United States. Polish programmers, especially cloud specialists, are considered some of the best in the world - after all, one of the founders of OpenAI, Wojciech Zaremba is Polish ;)
We are, therefore, a great place for foreign companies to expand. This means that IT engineers will be sought after in our market, leading to increased recruitment, which is a positive outlook for us.
The most popular form of employment for programmers is definitely B2B. However, companies prefer hiring candidates on employment contracts because it takes several months to integrate an employee into the work, organizational culture, making it an investment in the person. With a B2B contract, the employee is not as tied to the employer, making it easier to switch to another company. For employers, this can be troublesome because after a year or two, they have to find another candidate for the same position and integrate them into projects again. Employment contracts are more binding from an employer's perspective. Moreover, B2B offers numerous tax benefits (e.g., IP Box), making self-employment more attractive. The trend of B2B contracts has been observed for several years, while in the past, employment contracts were more common, especially for women, as it was a crucial condition for associating with a chosen employer.
Despite the uncertain market situation, salaries for experienced specialists are increasing, and this trend is expected to continue. I'm referring to really good specialists. Within a year, their salaries have increased on average by 5-10 percent. Regarding benefits, there have been significant changes. We must remember that specialists earn a substantial income, and benefits like multisport cards or medical care are not as crucial for them. As a result, the market for non-monetary benefits has changed significantly. It's no longer about fruit Thursdays or leaving work 15 minutes early on Fridays. Nowadays, benefits include foreign training, stock options, ergonomic office chairs worth several thousand zlotys each, even for employees working remotely. Some companies also offer concierge services (e.g., assistance with laundry or grocery shopping) or cover therapy or education expenses. The approach to employee comfort has also changed, with relaxation exercises every two hours, air purifiers in workspaces, proper office lighting through color selection, and broad well-being programs.
The upward trend is expected to continue, as well as the offering of attractive benefits. However, we must remember that for many specialists, working on interesting projects in modern technologies is essential. People nowadays work not just to earn money but also to have an exciting job that brings pleasure and satisfaction. A good salary alone is no longer enough to be an attractive employer, and I would even say that financial expectations are no longer the main motivator for change.
Yes, definitely. I can reveal that these are companies from Israel, Dubai, and the United States.
Assuming that nothing as significant as a pandemic or armed conflict occurs, the industry's prospects are very positive. We must remember that the IT industry has been, is, and will be the most resilient sector to various economic obstacles. New technologies will continue to evolve, and specialists will be in demand to create them.
