Tech Employee Pay and Benefits Trends for 2023
While big tech has seen a slew of high-profile layoffs, markets across the country picked up the pace in March and added 316,000 jobs, according to the latest CompTIA report showing a decent month-over-month increase. In March 2023, technology unemployment held steady at 2.2%. Many factors play into labor shortages, including record resignations in the wake of the pandemic; shifting workforce demographics with an aging population and higher levels of retirees; and a significant rise in independent workers, with 60 million Americans performing freelance work in 2022.
CompTIA anticipates the net number of tech jobs in the United States will increase by 272,323 in 2023 to a total of 9.4 million. The industry trade association indicates that demand for tech talent will power continued employment gains across the country over the coming years. According to Gartner, demand for tech talent will greatly outstrip supply until at least 2026.
How can companies compete for and retain top tech talent? By offering competitive compensation and benefits that matter. Here are the top compensation and benefits trends to keep an eye on in 2023.
Top Trends in IT Pay and Benefits
1. Salary reigns supreme.
Pay remains the top reason workers look for a new job, according to research from Indeed. Inflation and widespread wage gains over the last year are influencing candidates’ expectations of higher dollar amounts. And, with more states and cities enacting salary transparency laws, workers increasingly expect that businesses detail average ranges for roles and skills.
2. Flexibility and remote work arrangements are table stakes in IT.
It takes a quick pass at any job posting site to see that remote work is here to stay. Computerworld’s annual Best Places to Work in IT reports that 90% of IT professionals work offsite at least part time and 83% of businesses have established a formal policy on flexible work. More than half of employers (57%) said they empower employees to choose where to work within guidelines or with manager approval, and 42% said their employees are free to choose where they want to work. Across the US, we saw an over 15,000 month-over-month increase in the number of remote positions in tech.
This follows broader global workforce trends. According to WFH Research, 30% of full-time employees are in a hybrid work model now, and 58% of workers want three or more remote work days in the future. Employees who have the flexibility to work remotely report benefits of no commute, feeling safer, being able to live and work from anywhere, having better focus and accessibility, being more excited about their job, and having more time with family and friends.
The benefits of remote work don’t stop there. According to Global Workplace Analytics, employees could save up to $3,000 per year and gain back the time equivalent of 14 days – the time they otherwise would have spent commuting. Employers could save more than $11,000 per remote worker per year as a result of increased productivity, greater agility, and reduced real estate costs, absenteeism, and turnover.
3. Career mobility and professional development in tech is critical.
According to CompTIA, one of the top three reasons workers leave their jobs is that they feel stuck in a rut. Helping employees build career pathways and develop professionally are crucial, especially for Millennials and Gen Z, many of whom will stay in jobs only as long as they continue acquiring new skills. By creating opportunities for employees to grow and develop professionally, organizations can ensure they’ll attract and retain top tech talent. There are many ways to do that, including:
- Tuition reimbursement – for example, Walmart pays 100% of employee tuition for in-demand degrees, such as software development and computer science and analytics.
- Allowance for professional development courses – courses could focus on leadership, technical training, or other skills.
- Upskilling and reskilling. According to Guild Education, two-thirds of all Americans need reskilling and upskilling over the next decade to stay relevant and to survive in our economy. Investments in reskilling and upskilling ensure employees’ career growth, which is a must for attraction and retention.
- Coaching sessions instead of annual reviews. Companies are dropping annual reviews in lieu of coaching sessions, which keep the lines of communication between employees and their managers open all year.
4. Mental healthcare is increasingly considered a core benefit.
Indeed reports employers are differentiating their organizations and strengthening job offers with robust retirement plans, health insurance, and PTO. Mental health insurance has risen to one of the most critical benefits expected at all levels, largely due to the impact of the pandemic on workers and their families. Glassdoor reports that employees who included mental health benefits in their reviews increased steadily throughout 2020.
The importance of mental healthcare cannot be overstated, and workers expect their employers to support them. According to Calm’s Workplace Mental Health Trends Study, work challenges topped the list of mental health challenges faced by survey respondents, ranking higher than personal illness, family health concerns, and loss of a loved one. More than two-thirds (67%) of respondents want their employer to help them deal with stress and anxiety.
Employers can start by encouraging executives to lead the way by openly discussing how they take care of their own mental health, training managers to recognize signs of stress and burnout, conducting regular team check-ins, and creating a safe space to discuss how they can be supportive.
5. DEI programs are a must for IT workers focused on social justice and equity.
While DEI programs such as employee resource groups, diversity training, and mentorship surged in 2020 and 2021, progress slowed in 2022, according to Glassdoor benefit reviews. This slowdown in DEI efforts could harm employers’ ability to attract and retain workers, 62% of which said they would consider turning down a job offer or leaving an organization if they didn’t think their manager supported DEI initiatives. Among Black respondents, it was 80%.
Demand for highly skilled IT talent will not slow down anytime soon. Offering competitive pay and benefits packages is a must. Competitive salaries, remote work options, career development, health insurance, mental healthcare, retirement plans, PTO, and DEI initiatives top the list of requirements. Companies that offer these to tech employees will have a better chance of attracting and retaining the best talent the industry has to offer. If you’d like to learn more about attracting and building a tech team internationally, reach out to us via the contact form below.