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Transformation of IT Labor Market: What Has Changed during the Quarantine

IT Recruitment Team Lead
Professional IT recruiter for product tech companies with 8 years of experience. Specializes in hiring senior engineers in Ukraine.
17 December 2020
5 min

The year 2020 became a challenge for all of us by transforming every single sphere of life. The active, diverse, and dynamic labor market of the IT industry was no exception. Several times during the quarantine period, the IT market underwent significant alterations. Taking into account the relative economic stability prior to it, the quarantine caught everyone by surprise.


It was officially announced in March 2020 and forced most companies to abruptly switch to a “home office” mode. As well, some of them applied a prescriptive approach to business management by reducing workplaces and decreasing wages by 15-30%. Back in March, most IT specialists retained their jobs and continued to receive 100% of their salaries; nonetheless, the situation had changed distinctly by April. Let’s analyze some specific changes that came up as a result of the pandemic.




Market Collapse


According to DOU – one of the most popular job searching resources among IT specialists in Ukraine – by April, the number of published vacancies decreased by 38% and the total number of job openings in the market was halved. Beyond the raw numbers, actual changes in our clients’ hiring plans were made during the second quarter. One of our customers from the USA was forced to fire a manager from the Kyiv office a few weeks after giving him the job. A second client from France reduced the number of hired specialists from 8 to 5; whereas another one from Norway came back with a request to find him software developers while lowering the requirements for candidates.


The measures mentioned above were taken primarily due to the redistribution of financial flows and changes in strategic goals within companies. Some businesses had shifted their focus from hiring to other relevant processes. For instance, some companies were made to pay for premises they were not using because of the absence of rental vacations. That’s why they reduced hiring resources to optimize such expenses. Other companies chose a wait-and-see position and reduced costs by closing some of their projects and dissolving teams of engineers.


On the other hand, the quarantine opened up new opportunities as well. For example, Game Development companies and businesses associated with online products and mobile development have successfully launched new projects and advanced existing ones. They did not suspend the hiring process but benefited from the increase in the number of candidates in the market. Another of Alcor’s customers, a well-known Israeli grocery company, has continued to offer jobs since March 2020. It has even expanded its team in Kyiv with 10 open vacancies since the beginning of the pandemic.


What candidates are looking for?


In March, the behavior of potential candidates changed as well. Due to the general economic situation and recommendations to isolate oneself, the number of CVs decreased. Those who were looking for a new job as an improvement of an existing position suspended the search. During the first few weeks of quarantine, candidates were not prone to accept new offers. However, in April when IT companies began to dissolve their teams, many qualified specialists entered the market. As a result, the number of potential candidates increased. Moreover, by mid-April most candidates had already accepted the on-going situation. At that time, they began showing ambitiousness, curiosity, and open-mindedness. Relations between candidates and employers changed: applicants were open to dialogue and new career opportunities.




Old Game, New Rules


The third quarter of 2020 in the IT industry was distinguished by the resumption of hiring. New companies entered the Ukrainian market, while the existing ones restored their plans. From the end of the second quarter, Alcor has received five new clients. These are large IT product companies, with a plan to hire from 5 to 15 technical specialists in Ukraine. What is more, during the six months of the pandemic, we managed to hire more than 30 Senior/Lead and Manager specialists for our customers.


During the quarantine period, both interviews and the onboarding process were conducted remotely. In this regard, some companies began to pay more attention to the applicants` experience of remote work, their organizational skills, and productivity. According to the latest research, half of IT companies did not change general requirements for candidates during the quarantine period. This fact indicates that market demands and some of our challenges remained the same.


For instance, the problem of finding experienced specialists is still relevant, as there is a shortage of Senior candidates and an oversaturation of Junior/Middle specialists. As before, hunting and active search are the most efficient tools for searching candidates and appear to be must-haves for those who want a talented IT specialist in their team. However, the IT market is becoming increasingly labile and our fast-paced world dictates new rules. In the near future, it will be even more difficult to find and retain employees, which means that companies have to adapt to this new reality.


Financial Matter


As regards salary levels, there were no significant changes during the quarantine period. 112 Ukrainian IT companies took part in research, which was aimed at finding out specialists` salary expectations. According to the received data, 61.6% of all respondents expect the same level of income as before the start of the pandemic, while 16.1% of candidates ask for less remuneration than in March, 12.5% of applicants expect to receive more and the rest of the companies – 9.8% – did not provide any data, as they froze their recruitment. As explained by Alcor recruiters, an average candidate is ready for a $100-200 shift in salary rate, which is not a considerable amount in general. Taking these points into consideration, we can say that the unexpected Covid-19 crisis did not affect the IT industry very much.


However, if we are talking about lead engineers or top managers, we can notice that the increase in salary rate goes hand in hand with steadily growing demand. Because of ongoing competition for experienced workers, many companies tempt new people, promising them greater income. That is the reason why it could be expensive to hire qualified specialists; yet despite that, it serves as a profitable investment in development of the team.


Current Trends


Regardless of the continuous quarantine, autumn remained a hot business season. The emergence of new projects led to the expansion of existing IT teams. Businesses are now ready to welcome new developers, but applicants are not as active as they used to be before April. During the quarantine, some of the potential candidates mastered freelance and appreciated its pros. What is more, candidates became extremely selective. About 15-20% of them strictly do not want to work in the office and consider only remote work. Quite often such candidates are the ones who used to be happy having their cozy place in the co-working space before quarantine started. The number of people ready for relocation within Ukraine has decreased significantly as well.


Today, the IT sector and its potential employees have fully adapted to these new realities. Due to market mobility and flexibility, most companies overcame hardships and managed to increase their professional teams. Of course, no one knows what the future exactly holds; nevertheless, it remains clear that the IT market will continue to develop and adapt to new challenges.


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We will provide you with statistical data regarding the number of developers in Ukraine and their average salaries. The discussion will proceed with the expected hiring deadlines and our recommendations on managing payroll, equipment procurement, and compliance matters.

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