The reality of the tech talent labor market in 2023 is likely to be shaped by a combination of factors, including the continued development and adoption of AI tools and the aftermath of the massive layoffs among tech giants in 2022-2023.

Content:

• How do massive layoffs of 2022-2023 affect the IT labor market today?
• How do AI tools like ChatGPT affect the tech talent market?
• So, is there really a tech talent shortage in 2023?
• Ways to outcome tech talent shortage
• European market of IT outsourcing in 2023
• Why consider Flytika for reinforcement of your tech team?
• Summing up

While the increased use of AI tools has the potential to both create new job opportunities and disrupt traditional tech roles, the layoffs may have led to an influx of highly skilled tech professionals into the job market. As a result, job seekers and companies must stay informed and adaptable to navigate the evolving tech talent landscape effectively.

How do massive layoffs of 2022-2023 affect the IT labor market today?

The massive layoffs among tech giants like Alphabet, Meta, and Amazon, which started in November 2022 and continued in 2023, might impact the IT labor market in several ways. Firstly, with so many people suddenly out of work, there will likely be an increase in the number of skilled IT professionals looking for new job opportunities. This could temporarily increase the available talent pool for IT positions, making it easier for companies to find and hire qualified candidates.

However, the long-term effects of these layoffs are less clear. While there may be an initial influx of IT professionals into the job market, there are also likely to be fewer job openings available due to the economic downturn. This could result in increased competition for IT jobs and decreased salaries, particularly for entry-level positions.

Additionally, the layoffs could have an impact on the types of IT roles that are most in demand. For example, companies that are struggling financially may prioritize hiring IT professionals who can help cut costs and optimize operations, such as those with expertise in cloud computing, automation, or cybersecurity. On the other hand, companies that are experiencing growth may prioritize hiring IT professionals with skills in software development or data science to help drive innovation and expansion.

These are the job positions that were affected the most:

• IT recruiters
• HR managers
• R&D specialists
• NextGen technologies developers
• Junior-level tech specialists

 As market analysts put it, these are the positions that either demand too many investments (and don’t give a guarantee that these investments will pay off) or can be replaced by artificial intelligence.  

Overall, the effects of the massive layoffs on the IT labor market will likely depend on a variety of factors, including the speed of the economic recovery, the specific industries and regions affected, and the types of IT skills that are most in demand. It is important for both job seekers and companies to stay informed and adaptable in order to navigate these changes and find success in the evolving IT labor market.

How do AI tools like ChatGPT affect the tech talent market?

AI tools have the potential to both impact and be impacted by the tech talent market in a number of ways. On the one hand, the development and deployment of AI tools requires skilled professionals with expertise in areas such as machine learning, natural language processing, and data science. As demand for AI technologies continues to grow, companies are likely to seek out and hire more of these highly specialized professionals.

However, AI tools like ChatGPT can also disrupt the traditional tech talent market. For example, by automating certain tasks and processes, AI tools can reduce the need for some types of IT roles or require fewer human workers to accomplish the same tasks. This could lead to a decrease in demand for certain types of IT jobs, particularly those that involve routine or repetitive tasks.

At the same time, artificial intelligence tools can also create new job opportunities and require new types of skills. For example, companies may need to hire professionals with expertise in AI integration, data analysis, or user experience design to help develop and deploy these tools effectively.

Overall, the impact of AI tools like ChatGPT on the tech talent market will likely depend on a variety of factors, including 

• the rate of AI adoption, 
• the specific industries and regions affected, and 
• the types of skills that are most in demand. 

While AI tools may disrupt the traditional tech talent market in some ways, they also have the potential to create new opportunities and require new types of skills, making it important for both job seekers and companies to stay informed and adaptable in order to navigate these changes effectively.

So, is there really a tech talent shortage in 2023?

The tech talent labor market in 2023 is highly competitive and complex. Considering the factors described above, there is still a tech talent shortage among European tech companies. According to a study by the European Commission, the demand for digital skills will continue to grow at a rate of 4% per year until 2025. However, the supply of digital talent is not keeping pace with this demand, leading to a talent shortage in many countries.

In addition to the growing demand for IT professionals, there are other factors contributing to the talent shortage. One of the biggest challenges is the rapid pace of technological change, which makes it difficult for universities and other educational institutions to keep their curricula up-to-date. This means that many graduates enter the workforce without the skills that employers need, leading to a skills gap that is difficult to overcome.

Ways to outcome tech talent shortage

Thanks to globalization, a lack of labor force in one region is not a problem anymore. To overcome the tech talent shortage, companies can opt for delegating their business operations by adopting a variety of strategies, including traditional outsourcing, managed IT services, and staff augmentation.

Traditional outsourcing

One of the main advantages of traditional outsourcing is that it allows companies to access a wide range of IT skills and expertise without having to manage the hiring process themselves. However, being quite an ancient business model, it has some major downfalls. 

• Traditional outsourcing is the most expensive way to delegate your business functions to a third party.
• There is a risk that the outsourcing partner may not fully understand your business needs or the cultural values of your company.
• You might lack control over the working process and other aspects of the outsourced project.
• Lack of communication is one of the largest challenges in traditional outsourcing.
• Before delegating a project to the IT vendor, you have to write down all the requirements to the project. As a rule, changing these requirements in the process leads to fines on behalf of the client.

Managed IT services

Managed IT services involve outsourcing the management of a company’s entire IT infrastructure to an external provider. This could include network management, server maintenance, and helpdesk support. The external provider takes responsibility for monitoring and maintaining the IT infrastructure, ensuring it is always up-to-date and secure.

One of the main advantages of managed IT services is that it allows to foster partnership relations between clients and IT vendors. In such an ecosystem, both parties are interested in development and success of each other, they try to stay transparent and open, and rarely have troubles with lack of communication. 

Staff augmentation

Staff augmentation means hiring additional IT professionals to work alongside your company’s existing staff. This could include developers, designers, project managers, or other IT specialists. The additional staff members work on a temporary basis, either onsite or remotely, and are managed by the client company. 

One of the main advantages of staff augmentation is that it allows companies to access a wider pool of IT talent without having to commit to hiring full-time employees. This is particularly useful for businesses that have short-term projects or seasonal peaks in demand. Staff augmentation is also considered quite affordable, and it allows you to maintain control over all parts of delegated business operations.

European market of IT outsourcing in 2023

The aggressive war of Russia in Ukraine has drastically impacted the labor market, namely the market of tech talent in Europe. Namely, Russian and Belarusian IT vendors were abandoned from the international market. At the same time, some international clients are now afraid to hire developers from Ukraine, seeing the country as destabilized. The political situation in the region resulted in the following consequences: 

• A lot of tech talents from Ukraine have fled the war. 
• A lot of IT specialists from countries-aggressors have fled mobilization.
• European labor market was fled with IT specialists. 

These dramatic changes haven’t affected the trends of the labor market much. 

• Hiring developers in Eastern Europe is still cheaper than getting a tech team from Central or Western Europe
• Poland, Hungary, the Czech Republic, Latvia, Lithuania, and Romania are still the main tech hubs of Europe.
• Great Britain, France, and Germany still offer the largest salaries to their engineers and developers.

Let’s evaluate the tech labor markets of some European countries.  

Poland

Poland is rapidly emerging as a top destination for IT outsourcing in Europe. The country has a large and growing pool of IT professionals, with over 200,000 workers in the industry. Moreover, it became a home for hundreds of thousands of Ukrainian refugees, with some of them being IT specialists. What’s more, many Ukrainian companies are trying to diversify their presence in the international market and open offices in Warsaw. This is also the case for Flytika, which today operates both in Ukrainian and Polish markets. 

Poland also has a highly developed IT infrastructure and a favorable business environment, with low labor costs and a highly educated workforce. According to job portals and other open sources, the average salary of a senior software developer in Warwas is about $3,370 per month.

Hungary

Hungary is another top destination for IT outsourcing in Europe, with a growing number of IT companies setting up operations in the country. Hungary has a well-educated workforce, with a strong emphasis on science and technology education. The country also has a favorable business environment, with low costs and a highly skilled workforce. The average salary of a senior developer in Budapest is $3,390 per month.

Latvia

Latvia is a small but growing player in the European IT outsourcing market. The country has a highly skilled workforce and a favorable business environment, with low costs and a highly developed IT infrastructure. The salary of an experienced software developer (8+ years of experience) in Riga is $3,460 per month.

Czech Republic

Delegating software development to an IT vendor from the Czech Republic can offer several benefits. Here are some reasons why you might consider this option:

• Skilled IT workforce. The Czech Republic has a well-established education system that produces a high number of IT graduates with expertise in various programming languages, frameworks, and technologies.
• Proximity and time zone compatibility. The Czech Republic’s central location within Europe makes it easily accessible for businesses from different parts of the continent.
• Quality and reliability. Czech IT vendors are known for their commitment to quality and reliability. They follow best practices, adhere to industry standards, and often have experience working with international clients.
• Cultural compatibility. Czech professionals often exhibit a strong work ethic, professionalism, and a commitment to delivering high-quality work. The country’s business culture is generally known for its reliability, precision, and attention to detail. 
• European data protection regulations. The Czech Republic, being an EU member state, adheres to the GDPR.

The average salary of a senior-level engineer, though, is relatively high in the Czech Republic and comprises $4,800 per month.

Germany

Germany is the largest economy in Europe and a significant player in the IT outsourcing market. The country has a highly skilled workforce and a strong emphasis on science and technology education. However, labor costs in Germany are higher than in many other European countries. To hire a dedicated software developer from Berlin, you will need to pay $6,250 of direct labor costs a month alone. 

Why consider Flytika for reinforcement of your tech team?

Flytika is a top choice for businesses looking for an IT outstaffing partner due to our expertise in staff augmentation practices and our commitment to delivering high-quality services to our clients. Here are a few reasons you should consider Flytika for your IT outsourcing needs:

1. Global talent pool. We have access to a global talent pool of skilled IT professionals, ensuring that you can find suitable candidates for your business, no matter where you are located. We specialize in Poland, the Czech Republic, Hungary, and Israel. 
2. Customized solutions. We work closely with our clients to understand their unique business needs and provide customized solutions that meet their requirements.
3. Competitive pricing. We offer competitive pricing for our services, ensuring you can access top-quality talent without breaking the bank.
4. Seamless integration. Our IT professionals seamlessly integrate with your existing team, providing additional support and expertise without disrupting your workflow.
5. Quality assurance. Our rigorous quality assurance process ensures that our IT professionals deliver high-quality work that meets your standards.
6. Scalability. Our IT outstaffing services are flexible and scalable, allowing you to quickly and easily adjust your team size to meet changing business needs.
7. Expertise. Our team has extensive expertise in IT outstaffing and managed IT services, ensuring you receive the best possible support and guidance.

Summing Up

As the tech talent shortage continues to impact businesses across Europe, IT outsourcing and outstaffing are becoming increasingly popular solutions. Traditional outsourcing, managed IT services, and staff augmentation offer unique advantages and challenges, and businesses must carefully consider their needs before deciding which approach to take.

If you’re looking for a reliable and experienced partner for your IT outstaffing needs, Flytika is an excellent choice. With access to a global talent pool, customized solutions, competitive pricing, seamless integration, quality assurance, scalability, and expertise, Flytika is committed to delivering high-quality services that meet your unique business needs.