December 21, 2022

2022 IT Industry Reflections and 2023 Predictions

8 min read

2022 was a big year for our industry – where the talent crunch, the number of New Zealand organisations delivering digital transformations and the growth in the tech sector collided with remote and hybrid working and the loss of homegrown talent to overseas experiences. All these combined had a significant impact on the industry. So, as we look ahead to 2023, it feels like a good time to reflect on what happened in the past year and predict what lies ahead in an era in which talent is leaving and entering the country and the technology needs of businesses are necessitating more staff in permanent and contractor roles.

What happened in 2022 within New Zealand’s tech sector?

2022 was the year that many of the restrictions around living with the COVID pandemic were eased or removed. The easing and removal of the restrictions extended to the borders where since 2020, we’ve had to manage without skilled immigrants looking to work and live in Aotearoa. Migration onto the cloud and other technological and digital transformations haven’t slowed – quite the opposite – which has meant demand for the volume and quality of skills has increased, and the supply decreased.

Kiwi tech professionals left to explore the world

To some, ‘The Great Resignation’ feels more like a catchphrase that peaked a year ago, but there’s no arguing with the number of qualified tech professionals leaving to explore the world. Kiwis leaving has been enabled by restrictions on travel finally loosening (and the knowledge that they’ll now be able to get back home!). Exploring the world to hone skills is valuable to professionals but costly to the local industry in the short term without the incoming talent to compensate for it. Factors outside of work opportunities and the desire to travel have supercharged this exodus somewhat, with the most popular factor being a more affordable cost of living. Despite large numbers of Kiwis heading offshore, we expect that a healthy portion of this group will return at various stages – bringing their newly acquired experience into New Zealand organisations.

The loss of talent due to travel restrictions loosening isn’t unique to the tech sector. Still, we’ve certainly felt it more than most, given the already-existing shortage in the industry predating the pandemic.

Borders reopening – enabling more overseas talent to work in NZ

While the easing of restrictions has seen those in the country depart for new adventures, it’s also seen the potential for overseas talent to come back into New Zealand. In 2020 we didn’t just see the taps turned off for new talent coming into the country but also much of the existing overseas talent left in considerable numbers to return to family before lockdowns ensued.

Work still needs to be done to estimate the full impact of the skills deficit that the reopening of the border will have. We’ve navigated an imbalance between demand and supply in this industry for many years, so we expect this development to answer only some employers’ problems. It’s not simply a matter of opening borders either; industry immigration and tourism efforts are required to position the country as a viable and attractive destination to live and work. For now, we are seeing an increase in applications from overseas talent – from those planning to move to New Zealand in the near future.

Flexibility and remote working have cemented themselves in the IT sector

Our industry has been ahead of the curve when it comes to remote working, although before 2020, this was still the exception as opposed to the rule. Contractors have long been used to hotdesking and working on the go, and busy tech professionals have been bringing their laptops home to complete work for some time. Where is our time spent during the workday? The pandemic forced all businesses to accommodate working from home as a norm. Many organisations have invested heavily in decentralising their infrastructure, pumping up security and rolling out systems that allow their team to work from anywhere in the country. In 2022 we saw this reality evolve from a necessity into a preference, with most tech professionals expecting hybrid or flexible working as the new standard offering. The benefits of remote working and hours flexibility include:

Tech Professionals

More control and time management on personal and work commitments
Removing lengthy commutes to work every day
Ability to focus on solo work without distractions of the workplace
More work opportunities outside of where you live
Time your work hours with when you feel the most productive

Tech Employers

Access to talent outside of the region the organisation is based in
Attractive benefit for potential hires
Can free up or reduce office space with fewer employees in the office at one time
Use more of the workplace for meetings and collaboration vs. individual work

What’s in store for 2023?

2023 promises to be a busy year for our industry. The first full year of open borders and immigration ramping up should see more employers finding the right talent. On the other hand, we could see a continuation of homegrown talent leaving amid growing costs of living and an election year that could spell change in 2024. But regardless of the access to talent, we aren’t anticipating a slowdown in demand – with innovation, digital transformation, and general IT maturity remaining a priority.

More talent arriving to help the skills shortage

In 2022 New Zealand opened back up to overseas talent, but we were slow compared to other countries, and this lag shouldn’t be ignored. As a result, we may look at a few years before we reach the same level of emigration to New Zealand as in pre-COVID times. With that said, 2023 should see thousands of new IT professionals reach our shores and be considered for permanent and contract, depending on their skillsets, visas, and where in the country they decide to base themselves.

Employers and recruiters will leverage the borders reopening in earnest throughout 2023 utilising offshore job listings and various digital advertising methods. We expect more debate and policy discussion about how the government can streamline the immigration process for skilled workers as businesses continue to struggle to acquire talent in the short term.

A focus on upskilling and developing talent into roles

In our research of IT employers and professionals this year, it’s clear that internships and junior development programmes are vastly underutilised. With such a talent shortage in the local market, we encourage the industry to consider creating more opportunities for inexperienced but enthusiastic talent with well-supported training and development plans. We see this as a win-win for both parties. The candidate gets on-the-job experience, training and connections with an internship or graduate program, and the business enjoys a new channel or relatively low-cost resource that, if managed properly, can develop into long-term IT employees.

Employers should consider incorporating an internship or development process to reduce the long-term skills shortage issues. 2023 may see many organisations piloting such programmes or refining them to make for a better experience.

Further development of IT sectors outside the main cities

We’re excited about the growth of the IT industry outside of Auckland and Wellington. Areas like the Waikato are seeing big growth in the population of IT professionals and tech start-ups. Christchurch is another fast-growing sector that offers unique opportunities for tech businesses via the industries that make up that region. In addition, 2023 will likely see more tech professionals choose lifestyle over proximity to the workplace, growing the presence of tech activity in smaller cities and towns across the country.

There’s no doubt that more tech professionals will move out of the city with less expectation to physically be in a CBD office to secure a role. Even in the leadership space, we have seen plenty of organisations open their minds to senior staff working in hybrid arrangements – the past few years have been a successful pilot for a permanent shift in workplace dynamics and employer attitudes. As more of our tech talent is present in more parts of the country, we expect to see more businesses opting for a regional office location. This might be the start of a 5-to-10-year shift where IT’s economic activity isn’t so concentrated in the urban areas of New Zealand.

Priorities on the basics

In the past, the industry’s predictions have been tied closely to innovation and the ‘new’. Whilst innovation will be part of the 2023 IT industry, talent shortages and borders reopening give us reason to believe that for many organisations, 2023 will be about securing the right talent, building structure to retain and develop that talent and creating successful teams in the process. The IT sector has experienced much turbulence in the past few years, and significant innovation must fit in around the foundational aspects of IT unless events outside the business’ control force it.

With that said, digital transformation is unlikely to slow down as part of a multi-year initiative to improve business systems and protect against security or disaster risks. Artificial intelligence is still in its infancy within most organisations, and we’d expect to see the introduction of it to solve more operational challenges for the more technologically nimble businesses. Topics such as the metaverse, which has attracted much commentary without the execution or widespread interest to match, is a space that, whilst likely where the online world will end up, will require evolution and the right mix of hardware and software for businesses to adopt a strategy around it for 2023.

Learn more about New Zealand’s IT industry

If you’re interested in reading more about our tech sector, head to the Absolute IT blog, where you can find insights about various topics, including skills in demand, pay and evolving technologies.

Explore our available IT roles today

Are you looking for a new IT role in which you can enjoy a flexible working arrangement? Check out our latest jobs to find your next big career move.

Absolute IT

December 15, 2022

Insights from the Latest Waikato Job Market Report

7 min read

As our Regional Manager of Waikato Brian Bernard puts it, Waikato might be described as “the upcoming mini Silicon Valley for New Zealand” with the innovation, start-ups and tech professionals moving to the area. As part of our efforts to understand each tech market in the country, we routinely conduct research on both job seekers and employers to understand their motivations and priorities. 2022 has been an interesting year for the NZ tech sector. We’re a few years removed from the start of the pandemic, but the impacts have been felt all the way through, with the borders only reopening in full by mid-2022. The market is still short on talent as there’s not been enough time for lost overseas talent to be replaced – compounded by the fact that many Kiwi tech professionals are leaving to explore the world and ply their trade elsewhere.

Our latest Waikato Regional Report provides dozens of useful insights for both employers and employees to understand what’s happening in the region, and what they should think about in the next 12 months. Below we explore just a selection of these takeaways; we encourage you to read the full report.

Download the Waikato Job Market Report

Our respondents for the Waikato report

The tech professionals we surveyed in our report were from a range of experience levels, with the biggest group represented by those with over 15 years in the industry (42%). The next biggest percentage (25%) had between 10-15 years of experience. The employment type was balanced between 52% permanent, 42% contract and 6% fixed term.

Waikato’s respondents reflected a 32% public sector/58% private sector/10% not-for-profit split.

The other part of the IT regional report is surveying tech employers. This split in sectors was 41% public, 46% private and 13% not-for-profit. The size of businesses varied, with 36% of employer respondents from businesses with 151+ employees, 31% with 11-50 and 26% with 51-100.

A talent shortage in Waikato

As is a prevailing trend across the country, we have a talent shortage, and Waikato is no exception. While the possibility of overseas talent will help fill some roles, we know that for some employers there’s a perception that New Zealand-based experience is required. We’d challenge this belief; many of the roles in high demand (more on this below) are highly technical and transferable from other markets. Overseas skill sets can benefit a role by bringing in outside perspectives and different problem-solving experiences.

Digital transformation in sectors like health is putting more strain on the talent pool in Waikato, although we’d expect the continual emigration from Auckland to help this somewhat, as well as the momentum of overseas talent settling into Waikato as well.

Skills in demand in Waikato’s tech sector

Software development and architecture are the most sought-after skills in the region, serving as the core technical capability that enables solutions to be delivered inside all organisations and project teams. Again, this shortage can be alleviated to a degree with an open mind to the fit of overseas talent. With digital transformation a priority for many large organisations, including those within the health sector, business analysis is in high demand as well. We’re observing a potential move to more permanent roles, where tech professionals have more stability and employers look to control resource costs. BAU team skills are in demand as well, with Systems Administration, DevOps and Support/Help desk skills also sought after.

Security promises to remain in the top 10 list for many years to come, with businesses moving more of their operations into the cloud and customer/user data requiring careful management and storage. And with reliance upon the internet which creates opportunities for cyber threats, security experience will bode well for tech professionals looking to maximise earnings and work opportunities.

Motivators for contractor hires

While we expect that permanent hires will make up a bigger chunk of the workforce based on the evolving needs of businesses in the region, contractors are simply part of any IT sector based on the nature of projects and access to specialist skills. In our research, we found that 56% of employers are planning on recruiting contractors in 2023.

Pay rises and bonuses

Pay has been a focal point of the tech workforce, and with the depleted numbers of available tech talent in the past few years, there have been excellent earnings opportunities for professionals possessing the right skills. While New Zealand is likely to have some degree of shortage for years to come (as has been the case for the past few decades), we could see Waikato pay stabilise with more talent becoming available and a focus on permanent hire into the BAU operations of businesses.

In 2022, 97% of Waikato tech employers gave their team pay increases – reflective of a need to retain good talent in a competitive market. Consciously, only 40% of tech professionals expect a pay increase, although the top motivator for considering and ultimately moving to a new role is improved income.

How happy are Waikato tech professionals?

9 in 10 tech professionals reported being happy with their current workplace, citing workplace culture most commonly (36%) as the reason for being happy. Despite a general sense of happiness in their work, 4 in 10 tech professionals are considering a move to a new workplace in 2023. Along with the aforementioned better pay, reasons given for this included contracts ending and simply ‘time for a change’ – a natural theme within the fast-moving and varied tech sector.

Work-life balance could be improved for tech professionals, but that often depends on factors like a specific role, stage of a project, family or personal circumstances, distance to the office, and time management. Employers should continue to work to make the work day and week manageable for their teams – it could mean the difference between keeping or losing that star performer.

Flexible working arrangements

Many impacts can be observed in the IT sector due to the events of COVID and the lockdowns that followed. Perhaps most noticeable has been the paradigm shift in employers’ attitudes towards remote working and flexibility of hours. Through enforced remote working, many employers – including those who’d previously offered a lighter degree of flexibility – have discovered the practicalities of hybrid or remote working is more than tenable. In fact, for many tech professionals, the ability to drop some or all of their commute is a big drawcard in their work. 86% of Waikato tech employers have remote workers now.

Security and business continuity changes in the tech sector have allowed more roles to be conducted offsite. This doesn’t just help keep good talent in the business, but is a strong benefit to advertise to new IT talent. Waikato employers who struggle to fill roles locally may look further afield for remote-based employees in 2023.

95% of Waikato employers offer flexible or remote working options – 97% of this is a mix of working remotely and coming into the office. It’s an encouraging statistic that we hope becomes the default for all employers.

More opportunities for talent development through internships?

We’ve long mentioned that addressing New Zealand’s talent shortage needs to start at the source; creating more desire and support in the education sector to choose IT as a career path. But the stage after training in the field is critical to get right as well – the first role out of tertiary education or other training. We see graduate programmes and internships as the logical channel for employers to attract new talent that may possess technical skills and simply have not applied them yet. An internship with the right mentorship and structure around it can benefit the business greatly – finding new, affordable resources that can grow with the business and its values.

Unfortunately, these programmes are underutilised in Waikato, with only 13% of tech professionals reporting as having gone through such a programme – 50% of which had this experience over 15 years ago.

There’s an initial investment of time and effort to building an internship or graduate programme – it needs to interface with the business in the correct way and requires good internal staff to surround interns with the right support. However, once the framework is in place, internships can become a valuable resource tool – we hope to see more internships surfacing next year.

Learn more about Waikato and New Zealand’s IT industry

If you’re interested in reading more about our tech sector, head over to the Absolute IT blog where you can find insights about a range of topics including skills in demand, pay and evolving technologies.

Explore our available IT roles today

Are you looking for a new IT role, perhaps one in which you can enjoy a flexible working arrangement? Check out our latest jobs to potentially find your next big career move.

Absolute IT