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Buoyant tech sector bucking the UK trend, says consultancy

Tech jobs – and salaries – look safe despite cooling economy

The UK's technology sector is continuing to hire and to bump up salaries despite the deteriorating economic outlook, at least according to accounting and consultancy outfit RSM.

RSM said that its Middle Market Business Index (MMBI) survey showed that fewer organisations in all sectors plan to increase recruitment during the second quarter of this year compared to the first quarter, down from 52 percent to 41 percent. The survey also found a drop in the number of businesses planning to recruit more staff over the next six months, which points to the labor market outside of the tech sector starting to cool.

The company cited reasons including the impact of the war in Ukraine, the hike in inflation, ongoing supply chain issues and weakening customer demand, which it says is having a dampening effect on middle market companies.

In contrast, RSM points to figures from the Office for National Statistics that indicate that vacancies in the information and communication sector reached 76,000 in the first quarter of 2022, up by 10 percent from 69,000 for the final quarter of 2021.

According to RSM, the number of new tech companies incorporated in the UK also increased by 62 percent during 2021 compared with the previous year.

The latest MMBI was completed in April from a survey of 20 tracker questions distributed to approximately 700 senior executives at middle market companies. The survey sought opinions on current and future business conditions.

By RSM's definition, mid-market companies are those with annual revenues of £10 million to £750 million (c $12.5 million to $939 million). Around 33,000 organizations in the UK fit that description.

RSM UK economist Thomas Pugh said that labor shortages in the media and tech sectors are due to the relatively new skillsets the industries require.

"It will take time for those skills to become more commonplace in the economy, especially amongst more senior staff. This makes it crucial for the sector to invest in training and upskilling their people rather than trying to recruit more from a very limited pool," Pugh added.

According to the consultancy, UK tech salaries have increased by 36 percent since 2015, which it claims shows that the tech sector remains buoyant and is continuing to invest in people.

RSM also said that while a shortage of talent has meant that salaries for programmers and IT specialists are at a premium, offshore IT support from areas of the world where costs are usually lower are also beginning to match rates in the UK. ®

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