Tech Talent

Business
Survey
Report
2023
 Tech Talent Business Survey Report 2023

Foreword
2022 was a tough time for the IT sector, but 2023 has seen different
challenges emerge. Many industries ordering tech services are currently
facing a slowdown, growing inflation, the consequences of a war in Europe
and layoffs related to drops in revenue during the last quarter. In short, it’s
difficult for a business to grow against such a backdrop.

The talent gap’s impact on a candidate’s prospects is dependent on

seniority and experience. Entry level salaries have stagnated for nearly a
decade. On top of this, the most recent economic woes have worsened the
position of the junior IT specialist on the job market. In contrast, a shortage
of highly qualified IT Talent is pushing up salaries for more senior positions.
This gap between junior and senior positions has further widened due to
the development of AI-based solutions such as ChatGPT1, which can help in
work being conducted more efficiently and can be managed by
experienced professionals who know what questions should be input.

Running this anonymous study was intended to address the challenges of

the new reality that IT companies are facing and to see how these issues are
affecting the market. The study’s findings may help IT companies to become
aware of current trends and the ways of navigating a volatile environment in
order to plan ahead.
 Tech Talent Business Survey Report 2023

The current situation

on the market
Since the beginning of 2023, the tech market’s biggest change has been
the mass layoffs of tech specialists. As of now, over 700 tech companies
have made over 200,000 employees redundant2, with the majority of
redundancies occurring in January.

This has happened across the board, from tech giants such as IBM, Google,
and Vodafone which has recently cut over 11,000 tech jobs3,4,5, to smaller
businesses which are beginning to experience the same market
contractions. Some companies in Europe have cut up to 25% of their staff6
in order to stay afloat. As issues have even started to impact cost-effective
locations, it appears as if the entire IT world is experiencing a slowdown.

In recent years, there have been significant hikes in the cost of Tech Talent
across all geographies. As last year's Talent Alpha survey indicated, more
than 93% of companies had experienced salaries levels increases. Despite
this fact, the difference in salaries between the U.S. and Europe is still
significant. According to CodeSubmit7, Qubit8 and Indeed9 , U.S. salaries
were up to four times higher in certain roles when compared to the same
specialization in CEE in 2022. However, our latest insights indicate that the
pay gap between UK and CEE specialists' wages has closed to 15% in the
first quarter of 2023.
 Tech Talent Business Survey Report 2023

The current situation

on the market
Despite this change, Central European Talent remains competitive with
Western clients in terms of price. This opens the door for CEE businesses,
once the crisis subsides, as companies searching for cost effectiveness but
also security, are still setting their sights on this part of the world. In the
same way that the 2009 financial crisis led to a booming business services
industry in Central Europe, today many companies are looking to improve
operational results against the backdrop of a number of crises.

The expansion of shared services in a cost-effective location seems to be an

option considered by many, given the latest updates by, for example,
Google10 and Visa11.

An additional factor that has to be taken into consideration when analysing

the latest market conditions, is the technology switch that we are currently
facing. With Artificial Intelligence and Machine Learning technology set to
revolutionize our world, business must react rapidly in order to stay
competitive. It will force companies to build new technology foundations,
rethink current development strategies, search for possible niches and
create or re-create their technology teams. This will surely affect the entire
technology ecosystem, starting from the ways in which technology is being
taught to the extent and manner in which these advancements are utilized.
 Tech Talent Business Survey Report 2023

Survey results analysis

1 Reality – what are the obstacles that the IT Business currently faces?

What are the biggest external risks for your business

How much do you predict your business will grow

in the upcoming year? in 2023?

30
Business will 

Inflation 9%
reduce slightly
25
Economic recession 29%
Business will stay

20
Geopolitical tensions flat

15
Lack of financing and liquidity Business will grow 
 41%

10 by up to 20%
War on talent
20%
Business will grow

Growing salary expectations 5

more than 20%
Clients canceling or postponing projects 0

Although 53% of the companies surveyed said their business was growing in 2022, the rest saw a decline (15%) or flattening (32%) in growth. When it comes to

predictions for 2023 – the biggest bet (41%) was on a no growth scenario while 9% believed that their businesses would drop in performance. The remainder of the

companies surveyed were still hopeful, with half of the companies anticipating growth of up to 20% (21%) or even more (29%). However, the latest findings indicate that the

aforementioned negative scenarios are becoming a reality. The most common difficulties faced by SMEs around the world are: a lack of new business opportunities,

unfavorable economic factors, market uncertainty and a shortage of appropriate staff which is still a problem despite there being more available specialists.

Positive predictions given in the survey may be motivated with smaller and medium companies finally managing to fill their respective tech gaps during the last quarter of

2022 – many of the specialists laid off by the biggest companies were reabsorbed12 into the market by smaller companies that had no chance to compete with the salaries

and perks offered by the tech giants in the last few years. It is worth mentioning, that according to last year’s Tech Talent Survey by Talent Alpha, 9 out of 10 participants said

their businesses had been affected by the talent gap. As a consequence, the tech talent gap issue is being resolved in this area, with signs that many smaller businesses

might be forced to reduce staffing levels in the coming months. On a positive note, big business, which once exclusively sought cost-effective solutions such as outsourcing,

is now focusing on talent from smaller, ergo less expensive companies. However, the general weakness of the global economy means that market conditions remain

challenging.
 Tech Talent Business Survey Report 2023

Survey results analysis

1 Reality – what are the obstacles that the IT Business currently faces?

What are the signs of the decrease you’re
 If you have a specialist available now, how long would


experiencing? it take to find them a new project?

I never have specialist


3%
available
3%
14%
No new business

Less than a week

opportunities 21%

43% 41%
Current projects

1-2 weeks
are downgraded

43%
Current projects

Up to a month 35%
are closed down

More than a month

One of the main challenges the IT Market has to deal with, is the shortage of opportunities. 43% of companies stated that they faced a lack of new opportunities, while

another 43% said that they suffered from projects being downgraded. In other cases (14%), projects had been closed. The expected time for finding a project for a vacant

specialist was a month (41%) or more (35%), with a few companies (21%) expecting a shorter waiting time – even less than a week (3%). There was also a group of niche

companies (3%) which stated that they never had specialists on the bench.

These numbers illustrate that businesses across the United States, Europe and China are all experiencing weakening activity. Concerns caused by the collapse of Silicon

Valley Bank, Signature Bank, and First Republic, as well as Credit Suisse have rippled across other industries including the tech sector13. This shows that the tech business is

sensitive to external, global conditions.

 Tech Talent Business Survey Report 2023

Survey results analysis

1 Reality – what are the obstacles that the IT Business currently faces?

Are you able to cover your staffing needs? How often, on average, do your tech specialists ask

for a raise these days?

Once a month
3%

9% 3% 6%
Yes’ we are okay 

Once a quarter
with covering our needs
35%
We are experiencing 

53% Every 6 months
temporary issues 38%
52%

We have some significant

Once year
issues

Less than once a year

This economic factor is seen as the source of the biggest concern for IT businesses with recession, inflation and instability of finances regarded as the greatest dangers.

According to the latest data, up to 83% of IT companies14 were concerned about the future and were cautious when it came to expenses. This illustrates the current

sentiment in the IT market. Another issue related to the uncertain economic situation is linked to the low variety of new opportunities – businesses are worried about clients

postponing or even cancelling projects. Another important group are respondents who were afraid of growing salary expectations, which may be justified as inflationary

pressure was having an impact on wages at the beginning of the year and global job opportunities for local specialists. What is worth mentioning, is the fact that none of the

respondents were afraid of other cost increases, which shows how important salaries are in IT businesses’ overall costs.

The survey’s results confirm that businesses are noticing only slight challenges related with covering their staffing needs. 38% of the companies surveyed had experienced

temporary challenges in this area, with over half (53%) feeling confident about this matter. Only 9% had significant issues with covering their staffing needs, with no

company seeing this situation as critical. Looking at market data, company owners15 admitted that they had changed employees in 2022 due to compensation (20%), with a

quarter planning to do so in the near future. According to the survey, the average time for specialists to ask for a raise was six months or once a year. Specialists asking for

salary increases once a month or every quarter were a rarity.

 Tech Talent Business Survey Report 2023

Survey results analysis

1 Reality – what are the obstacles that the IT Business currently faces?

How much, on average, have the salaries of your IT specialists grown in the last 6 months?

16
The’ve stayed the same

14
Up to 10%

12

11-20%
10

21-30% 8

6
31-50%

51-75%
2

More than 75% 0

Last year's results showed that only 6.1% of companies did not experience increases in specialists’ salaries. For a significant proportion (32.4%), salaries grew by 20-30%,

while some (2.7%) said there had been a rise of over 75%. In 2023, salaries have still been growing but on a different scale. Most often, rates have increased by 11-20%.

On average, the range of rises is 10-30%. This year, no company has declared that they would raise their specialist's salary by over 75%. The issue of continuously raising

rates may be a bigger problem as it will exacerbate the talent gap and force companies to accept reductions in their margins.

Research by Dice16 shows that nearly half of IT specialists still believed that they were being underpaid. This and the large workload are the main reasons for specialists

quitting. With the current global downturn, we may see that the growing financial appetite for IT specialists may stall for a while, at least until the economic situation

stabilizes17.
 Tech Talent Business Survey Report 2023

Survey results analysis

2 Trends – plans on dealing with challenges.

While taking into consideration the results of the survey and data from

the market, some recurring patterns are visible. There are different

ways of dealing with such a situation but there are five trends that Tech

Companies are planning to utilize during these difficult times.

Investing in sales - as the most common

way of escaping from the crisis.

What seems to be the safest solution in times of crisis, is to strengthen ties and build a

lasting relationship with current customers. The focus is on the sales department, to help

build lasting relationship with partners – existing and prospective. 62% of companies,

who took part in the survey, planned on investing in sales. In the context of the survey,

some of the solutions for dealing with difficult market conditions were still in the sphere of

plans and declarations.

Nonetheless, there is a noticeable increase in the forecasts for 2023, assuming that sales

will grow between 4% and 6%18. It is not on a par with pre-pandemic levels, but it is still

somewhat interesting that despite tough times in the finance sector, many have decided to

invest and help the business. To underpin this fact, 80% of CEOs worldwide19 plan on

investing in innovations to keep engagement and loyalty at a high level.

 Tech Talent Business Survey Report 2023

Cutting non-employee costs.

The economic recession was the biggest fear (78%) for the majority of companies who
participated in the survey. This is in line with the results of other surveys which showed
that up to 74% of CEOs perceived inflation as the top external challenge in 202320, while
99% of CFOs were looking to cut their company’s budget21. The step of examining and
minimizing expenses seems reasonable since tech companies' expenses have been
outpacing revenue22. Companies who took part in the Talent Alpha survey were planning
to find resources for balancing the budget and future investments by cutting costs
elsewhere23. The results showed that 50% of the companies surveyed were looking to cut
operational costs.

Passing growing costs on to the end clients.

The tech industry has significantly suffered from the impact of rapidly increasing prices for
services. Many felt the urge, to rethink their budgets. One way of dealing with constantly
raising expenses was for companies to pass on price increases to their customers. 29% of
companies which took part in the survey plan to increase their margins. Given the latest
insights from our Partners ecosystem, some companies may not be able to implement this
plan. Regarding the topic of raising margins, there are different perceptions in various
research. At one end of the scale - due to financial problems, many tech CEOs see a
pressing need to raise prices24 for services to increase company revenue. On the other
hand, another survey noted that 93% of business leaders in Europe expected to cut
margins by between 10 and 25%25. This is bound to vary from location to location. Even if
there has not been much growth in this area, the responses in the Talent Alpha’s Survey
may herald future shifts in many IT businesses’ strategies.
 Tech Talent Business Survey Report 2023

Implementing a hiring freeze - while passing

additional work on to subcontractors.
Regarding all of the plans of IT Companies in dealing with the crisis, one area is
particularly interesting. This year has seen changes in recruitment trends. Despite the
layoffs happening on the market, hardly any of the survey’s respondents planned on
reducing salaries (6%) or staff (3%).

In fact, nearly everyone had plans to grow their teams. Our latest findings indicate that 17% of the IT
companies have
software houses have had to rethink their strategy although this situation may change in
the next quarter.

When it comes to employers, there was also some interest in reaching out to gig workers
instead of investing in permanent hires. Some (17%) had decided to rely more on gig decided to rely on
the gig workers

workers in 2023. Such a shift in hiring can help companies cut costs, resolve temporary
issues and increase efficiency. According to other research, only 33% of the market used
gig workers26.

This way of dealing with the crisis may be seen as fairly revolutionary, since minimizing
expenses is widely seen as one of the top benefits of utilizing contract workers27. It can
in 2023.
work both ways – according to Talent Alpha’s survey, 97% of IT services companies had IT
Specialists available during the year. It could be less than 5% of the company’s workforce
(47% of surveyed companies), or even up to 30% of a team’s specialists (12%).

Although the results show that finding opportunities may be somewhat difficult during the
crisis freeze, it can still pay off.
 Tech Talent Business Survey Report 2023

Survey results analysis

3 Staff reduction as the worst-case scenario

Despite anticipated obstacles, only 6% of companies surveyed would

slightly reduce their teams. In January 2022, the tech unemployment

rate in the US fell from 1.8% to 1.5%, according to CompTIA's

analysis.28 With the growing need for Talent, the decision to cut

nonemployee costs may be more urgent.

Despite being the main asset of a company, employees are also its

biggest expense. For small and medium-sized businesses in the growth

stage, investor requirements can be an important factor in cutting the

headcount29, as it seems to be the first action for some.

 Tech Talent Business Survey Report 2023

Survey results analysis

4 The market – who took the survey?

The results presented in the report were based on questionnaire

responses from nearly 40 companies as well as around 20 in-depth

interviews with representatives of companies that hire a combined total

of over 400,000 employees. These companies were 57% software

houses, 18% more complex IT service businesses, 9% HR/recruitment-

related businesses, and 16% major outsourcers and other businesses.

The majority of the companies surveyed were SMEs with 1-50

employees (65%), and 51-250 employees (32%), located mostly in the

CEE region (Albania, Bulgaria, Croatia, Estonia, Georgia, Hungary,

India, Lithuania, Mexico, Poland, Romania, Serbia, Ukraine, and the

United Kingdom) as well as countries located in Asia.

The top countries in which respondents operated were Poland, the

United States, Germany, and the United Kingdom. Industries in which

respondents operate included: 65% tech/software development, 6%

retail/ e-commerce, 6% outsourcing, 3% HR/recruitment, 3%

consulting, 6% banking & finance, and 3% marketing and media.

 Tech Talent Business Survey Report 2023

Survey results analysis

5 Key takeaways

Changes induced by inflation, the pandemic and the war are impacting companies' business but over 70% expect this

impact to be not long lasting.

In this report, Talent Alpha focused on examining how SMEs had operated in the last few months of the crisis. The report

also provides fresh perspectives and approaches on how to deal with IT market conditions - implemented or planned by

companies.

The report looks at issues such as the talent and wage gap, rising salaries for IT professionals, and the declining number

of new opportunities for businesses.

Below are some key thoughts from the report and the most interesting trends:

Although 53% of those surveyed said their business was growing in strength at the begining of 2023, 43% of

companies were experiencing a lack of new opportunities which now are impacting the business.

The economic factor is the biggest fear factor – 78% of the businesses surveyed were concerned about the

financial lability on the market.

Only 6% of companies treat layoffs as a way to solve problems. The vast majority are looking for other opportunities

to increase business efficiency. 62% of companies invest heavily in various types of sales activities and the

acquisition of new leads.

Rethinking the budget – relocating expenses and investing in trying times may be the way to go.
 Tech Talent Business Survey Report 2023

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 Tech Talent Business Survey Report 2023

About Talent Alpha

Talent Alpha is a tech talent platform that connects smaller IT businesses with large enterprises. Founded in 2018,

the company’s platform now has a pool of nearly 900 vetted service providers, with a talent pool of over 50,000 tech
specialists.
We want to be as close as possible to our service providers and to precisely know what ongoing changes they are
experiencing so as to ensure our platform is even more suitable for the challenges that lie ahead.
To do this we match international enterprises with smaller IT service providers in CEE which haven’t been utilized by big
organizations. Talent Alpha’s talent marketplace, thanks to AI, has a sourcing process that can be up to 10 times quicker
than traditional HR recruitment procedures.

For more information visit talent-alpha.com

Published by Talent Alpha, June 2023