Digital & Tech: An Inflated Market for Salaries

As part of the series of insights around our 2023 Digital & Tech Salary Survey, our Director for Digital & Tech Daniel Chadwick shared his insights on the state of the market and the year to come. Read on for his thoughts.

In another turbulent year for business, inflation has hit the market. The cost-of-living crisis has rapidly become the greatest impactor on recruitment and salaries within the sector. This time last year, we discussed the high value that was being placed on alternative company benefits, such as flexible and remote working, well-being packages, and investment into Learning & Development. These were even beginning to be valued equally, if not higher than, a competitive salary package. But, with bills and prices skyrocketing, the scales have tipped once again to prioritise salaries.

One of the greatest stumbling blocks that companies are coming up against is the difficulty to ensure their salaries are in line with real-time inflation. Failure to adjust salaries for both existing and new employees means that many companies are at real risk of underpaying their staff, resulting in the risk of them jumping ship for higher-paying opportunities. Companies are faced with a difficult balancing act: in order to recruit new quality talent, companies must pay inflated salaries to secure these individuals. However, some companies are wary of bringing on staff at the same- or even in some cases a lower- level as existing staff at a higher salary than existing employees are receiving. Whilst we have spoken to many companies who are considering inflating their staff salaries across the board, and some of our clients have started to do so, there are many companies who are failing to adjust their salary bandings accordingly. All of this is contributing to retention in the market being at an all-time low, as the difficulty to recruit and retain reaches a boiling point.

Another interesting shift to note is the continued impact of remote-working practices on salaries. During the pandemic, it became apparent that companies based in London or the South regions were willing to pay higher salaries than those in the North. Because of continued remote and hybrid working practices, it has become possible for some individuals to gain higher salaries working remotely wherever possible. This is undeniably having an impact on salaries, and companies in other regions must ensure they are doing everything they can to remain competitive and flexible if they are hoping to secure the best talent.

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