Author: Gemini

IT Recruitment Trends in the UK

In this article, we'll explore the key trends expected to shape IT recruitment in the UK over the next 18 months. We'll draw on recent industry reports, market analyses, and expert opinions to provide a comprehensive overview of this dynamic landscape.

Current State of the UK IT Recruitment Market

The UK tech sector is a significant contributor to the UK economy, with a market value exceeding $1 trillion and employing over 3 million people. Within this sector, approximately 38% of professionals are in tech industry business roles, encompassing sales, marketing, finance, HR, operations, and management. These professionals play a crucial role in supporting the development and delivery of technology products and services used throughout the economy. In 2023, net tech employment in the UK reached an estimated 2,130,745 workers, a 3.4% increase from the previous year. This represents a rise of 195,085 net new jobs since 2018. Despite a slight dip in net tech employment between 2019 and 2020, the sector has rebounded and is projected to continue growing.   

However, the market faces challenges. The KPMG & REC UK Report on Jobs from January 2025 indicates a weakening demand for permanent positions and a decline in vacancies, with the biggest contraction since August 2020. This cautious approach to hiring in the broader UK market is largely attributed to ongoing economic uncertainties. Brexit, the COVID-19 pandemic, and wider economic concerns have all contributed to this uncertainty. Despite these challenges, the UK recruitment sector has shown resilience, driven by acute skills shortages, candidate scarcity, and changing working styles. The recruitment industry itself plays a vital role in supporting the UK's economic recovery by helping businesses find the talent they need and keeping unemployment rates low.   

Adding to the complexity of the market, research from Lorien shows that only 35% of younger tech candidates in the UK are happy in their current roles. This dissatisfaction may stem from younger workers entering the workforce during a period of intense digital transformation and high demand for tech skills, leading to increased pressure and competition.   

Key Trends Shaping IT Recruitment in the UK

1. Demand for Top Talent and Rising Salaries

The demand for skilled IT professionals remains high, leading to significant salary increases across the sector. In 2024, technology salaries were reported to be 25% higher than in 2020, with a Chief Technology Officer potentially earning between £113,899 and £210,276 annually. While this data is from the previous year, it indicates a trend of competitive salaries in the IT sector. Salary remains a primary motivator for job changes, followed closely by work flexibility.   

3. Rise of AI in Recruitment

Artificial intelligence (AI) is transforming the recruitment process, with 68% of UK recruitment firms expected to rely on AI tools for tasks ranging from sourcing to onboarding. AI-powered recruitment platforms can analyze thousands of CVs in seconds, rank candidates by compatibility, and even predict their likelihood of staying in a role. This technology can significantly reduce time-to-hire and improve the accuracy and efficiency of the recruitment process.   

Beyond efficiency gains, AI in recruitment offers the potential for improved candidate matching by identifying skills and experience that may not be apparent from traditional resumes. It can also help reduce bias in hiring decisions by focusing on objective criteria. However, ethical considerations and the risk of over-reliance on AI need to be carefully addressed. Companies must ensure that AI tools are used responsibly and that human oversight remains a key part of the recruitment process.

4. Focus on Skills Over Qualifications

The rapid pace of technological change is placing greater emphasis on skills and experience rather than traditional qualifications. Employers are increasingly prioritizing candidates who can demonstrate practical skills and adaptability, regardless of their educational background. This trend is particularly evident in the IT sector, where continuous learning and upskilling are essential to stay ahead of the curve.  

This shift towards skills-based hiring is further reflected in the increasing use of data-driven hiring practices. Companies are leveraging data analysis to identify the skills and traits that are most predictive of success in specific roles, enabling them to make more informed hiring decisions.  

5. Growth of the Gig Economy

The gig economy is gaining traction in the UK, with more companies opting for temporary and contract positions to meet their staffing needs. This trend is driven by the need for agility and cost-effectiveness in an uncertain economic climate. By 2025, the UK staffing market is projected to grow by 4.3%, fueled by temporary hiring in sectors like healthcare and IT.   

6. The Great Resignation and Retention Strategies

The "Great Resignation" has significantly influenced recruitment strategies, as companies grapple with increased employee turnover and competition for talent. To attract and retain top talent, companies are offering competitive salaries, remote work options, and clear career progression paths. This emphasis on employee retention highlights the importance of creating a positive work environment, fostering employee development, and providing opportunities for growth and advancement.   

Most In-Demand IT Skills in the UK

The following table presents the most in-demand IT skills in the UK, along with average* annual salaries and projected growth:

*location, sector etc. make any average salary o a snapshot of a far more complex set of figures.

   

In addition to these technical skills, soft skills are becoming increasingly important for IT professionals. Communication skills, stakeholder management, and people management are highly valued by employers. As technology plays a more central role in business operations, the ability to effectively communicate technical concepts and collaborate with colleagues across different departments is essential for success.   

Impact of Brexit

Brexit has had a notable impact on the UK recruitment market, particularly regarding the availability of talent. Changes to immigration policies have restricted the free movement of workers from the EU, leading to talent shortages in certain sectors. This has increased competition for skilled professionals and driven up salaries.   

Furthermore, Brexit has affected the UK talent pool by contributing to a decline in net migration from the EU. This reduction in skilled workers from the EU could have long-term consequences for the UK tech sector, potentially exacerbating skills shortages and hindering innovation. To mitigate these risks, the UK needs to focus on developing its domestic tech talent pool and attracting skilled professionals from other countries.   

One specific concern is the potential widening of the cybersecurity skills gap in the UK after Brexit. With stricter border regulations, it may be more challenging to attract cybersecurity professionals from the EU, making it crucial for the UK to invest in training and development programs to address this skills gap.   

Impact of the COVID-19 Pandemic

The COVID-19 pandemic has had a profound impact on the UK IT recruitment market. It accelerated the shift towards remote work, highlighting the importance of digital skills and adaptability. While the pandemic initially led to a slowdown in hiring activity, the IT sector proved to be more resilient than other industries. In fact, May 2024 saw a record number of professional vacancies (307) since the start of the crisis.   

However, the pandemic also had a significant impact on employment, with an estimated 7.6 million jobs at risk during the lockdown, including permanent layoffs, temporary furloughs, and reductions in hours and pay. This impact was disproportionately felt by low-income occupations, with nearly 50% of jobs at risk being in occupations earning less than £10 per hour.   

The pandemic has also brought about lasting changes to the workplace and employee expectations. With the increased prevalence of remote work, employees are placing greater emphasis on work-life balance, flexibility, and well-being. Companies need to adapt to these changing expectations to attract and retain talent in the post-pandemic world. This includes offering flexible work arrangements, promoting employee well-being, and fostering a supportive and inclusive work environment.

Impact of Wider Economic Challenges

Economic uncertainty, rising inflation, and the talent crisis in British businesses have all contributed to a more cautious approach to hiring in the UK. Businesses are increasingly focused on cost control and efficiency, which may impact recruitment budgets and hiring decisions.   

In times of economic uncertainty, a strong employer brand becomes even more critical. Organizations need to communicate their stability, resilience, and values to attract and retain talent. Building a positive reputation as an employer can help companies stand out in a competitive market and attract skilled professionals.   

To navigate these economic challenges, companies should adopt a more strategic approach to workforce planning. This includes conducting regular assessments of workforce needs, anticipating potential skill gaps, and developing contingency plans. By proactively planning for future talent needs, companies can better position themselves to weather economic downturns and capitalize on growth opportunities.  

The growing talent crisis in British businesses poses a significant challenge to economic growth. This crisis is characterized by a leadership and workforce gap, with many businesses struggling to find and retain skilled employees, particularly in senior management roles. Addressing this talent crisis requires a multi-faceted approach, including investing in education and training, promoting upskilling and reskilling initiatives, and creating a more attractive work environment for skilled professionals.   

External Factors

Various external factors can influence the IT recruitment market, including:

• Technological advancements: The emergence of new technologies creates demand for professionals with specific skills, while automation may displace certain roles. For example, the rise of AI and machine learning is driving demand for professionals with expertise in these areas, while automation may reduce the need for certain manual IT tasks.  
   
• Industry trends: Growth in specific sectors, such as AI and cloud computing, can drive demand for IT professionals. For instance, the increasing adoption of cloud technologies is fueling demand for cloud engineers, architects, and security specialists.  
   
• Regulatory changes: Changes to employment laws or immigration policies can impact the availability of talent and the cost of hiring. For example, post-Brexit immigration policies have restricted the free movement of workers from the EU, leading to talent shortages in certain sectors.  
   
• Social and cultural shifts: Changing attitudes towards work, such as the increasing preference for flexible work arrangements, can influence candidate expectations and recruitment strategies. Companies need to adapt to these changing expectations by offering flexible work options, promoting work-life balance, and creating a more inclusive and supportive work environment.  
   
• Political and world instability: Events like Brexit and the COVID-19 pandemic have created economic uncertainty and impacted recruitment. These events can also lead to changes in government policies, trade agreements, and global economic conditions, all of which can influence the recruitment landscape.   
   

Areas of the IT Sector Expecting Higher Growth in the UK

Several areas within the IT sector are poised for significant growth in the UK:

• Cloud computing: The adoption of cloud technologies continues to accelerate, driving demand for cloud engineers, architects, and security specialists. This growth is fueled by the need for greater scalability, flexibility, and efficiency in IT operations.  
   
• AI and machine learning: AI is transforming various industries, creating opportunities for AI developers, data scientists, and machine learning engineers. The UK government has also unveiled its AI Opportunities Action Plan aimed at boosting productivity and creating job opportunities in this field.  
   

   
• Cybersecurity: With the increasing sophistication of cyber threats, the demand for cybersecurity professionals is expected to remain high. This demand is driven by the need to protect sensitive data, prevent cyberattacks, and ensure the security of digital infrastructure.  
   
• Data analytics: As businesses become more data-driven, the need for data analysts and scientists will continue to grow. The ability to extract insights from data is crucial for informed decision-making, business optimization, and innovation.  
   
• FinTech: The UK is a leading hub for financial technology, with strong growth expected in areas like peer-to-peer lending, money transfer, and digital banks. This growth is driven by technological advancements, changing consumer behavior, and the increasing demand for digital financial services.  
   
• Tech occupation employment: Tech occupation employment is projected to grow at a faster rate than overall employment across the UK economy over the next 10 years. This indicates a continued strong demand for IT professionals in various sectors.  
   

For example, financial services recruiters, such as Barclays, Citigroup, Deloitte, J.P. Morgan, and Morgan Stanley, are actively seeking IT graduates with expertise in AI, cloud services, virtual reality software development, robotics process automation, user experience (UX), and analytics. This highlights the link between industry trends and the demand for specific IT skills.  

Conclusion

The UK IT recruitment market is expected to remain dynamic and competitive over the next 18 months. While economic uncertainty and other challenges may create some headwinds, the underlying demand for skilled IT professionals remains strong. Companies will need to adapt their recruitment strategies to attract and retain top talent in this evolving landscape. This includes offering competitive salaries, embracing flexible work arrangements, and utilizing AI-powered recruitment tools. Furthermore, a focus on skills development and upskilling will be crucial for both employers and job seekers to navigate the changing demands of the IT industry.

The shift towards hybrid and remote work models presents both opportunities and challenges. While it expands the talent pool, it also requires companies to adapt their recruitment and management practices to effectively manage a distributed workforce. The rise of AI in recruitment offers the potential for improved efficiency and candidate matching, but ethical considerations and the need for human oversight must be carefully addressed.

Brexit has had a notable impact on the UK talent pool, potentially exacerbating skills shortages in certain areas. The UK needs to focus on developing its domestic tech talent and attracting skilled professionals from other countries to mitigate these risks. The COVID-19 pandemic has accelerated the shift towards remote work and highlighted the importance of digital skills and adaptability. It has also brought about lasting changes to the workplace and employee expectations, with greater emphasis on work-life balance and well-being.

Wider economic challenges, such as economic uncertainty and the talent crisis in British businesses, require companies to adopt a more strategic approach to workforce planning, invest in employer branding, and prioritize employee retention.

Overall, the UK IT recruitment market is characterized by both challenges and opportunities. By understanding the key trends and adapting their strategies accordingly, companies can successfully navigate this dynamic landscape and secure the talent they need to thrive in the digital age.