The last quarter of 2021 was very intense for the industry in terms of hiring. This reflects the annual trend of greater activity of employers in the labor market in the last months of the year. Companies showed great interest in hiring because they wanted to fill vacancies so they could use budgets before the end of the year, plan their expenses for 2022 and start working on the new formation in January. The slowdown was recorded in the 2-3nd week of December. After a very busy year, both employers and candidates felt a strong need to rest and isolate themselves from professional matters. It can be concluded that the last month of the year revealed a certain turning point in the industry.

Tax law uncertainty

The end of the fourth quarter of 2021 was also marked by the Polish deal and associated uncertainty. The IT job market is full of highly paid professionals who are suffering from the negative consequences of new tax regulations. Hence, in making career decisions, they questioned whether wage negotiation with their current or potential employer was justified even before the Polish deal was implemented, in the face of so many unknowns.

Check also:

As a result, some IT professionals have either postponed the decision to change jobs until the beginning of 2022, or have formulated their financial forecasts in two variables, depending on whether or to what extent they will be affected by the new regulations. It is therefore not surprising that the situation was also complicated for employers, some of whom preferred to wait until the first months of next year when hiring.

Due to the Polish system, employers and IT professionals have begun to check salaries and benefit packages, which will result in, among other things, changes in the recruitment strategy. The new law, which is unfavorable to IT experts, will incentivize them to apply for wage increases. Employers will often have no choice but to respond to them, which will greatly increase the labor costs incurred by businesses.

New recruitment strategies

An increase in labor costs may have an effect on continuing employment. In situations where experienced independent experts become too expensive and difficult to obtain for companies, it is very likely a scenario in which organizations will focus less on acquiring so-called regulars and seniors, and more – on juniors with the right potential and skills. This is a strategy that has grown in popularity in the past quarter.

It is worth emphasizing that placing the center of gravity of recruitment on the juniors is, however, a strategy that requires proper planning. In a company that employs more employees with little experience, it is necessary to secure the interests of the elderly working in the company. They are responsible for educating and supporting the young ones so that they can achieve independence in a relatively short time.

It can be good for companies. First, after a few months, instead of a normal one, they will have a few well-functioning rookies in the team, who usually show great ambition and a willingness to develop. Second, the annual staffing budget can remain roughly the same. Lower salaries for juniors compared to experienced experts will release funds to increase the salaries of seniors working for the company, which will increase the chance of keeping them in the organization.

Salaries and benefits

In the fourth quarter of 2021, financial issues were at the center of attention for employers who hired IT experts. Information on wages, current wage trends, and moves made by other companies in the context of the Polish deal was very popular. As mentioned above, many organizations at the end of the year were limited to collecting data and understanding how the competition behaves. The full scope of the impact of the new regulations on salaries in the IT industry is likely to be assessed only after the first quarter of 2022.

Employers also paid a lot of attention to the non-financial elements of their offer. Companies wanted to adapt their packages to market standards in order to increase the attractiveness of the offer to potential and existing employees. They also checked whether a richer set of benefits could replace salary increases. However, the experience of working with various employers shows that the amount of net income remains the most important for the candidates. If the company offers an unattractive market salary and benefits, it is able to hire an employee without major problems. On the other hand, if he pays less than the standards, but has a very rich set of benefits, getting an expert will be very difficult.

Investments

In the fourth quarter of 2021, investor interest in locating their IT projects in Poland was very high, although slightly lower than the previous quarter. Foreign companies continued to focus mainly on the major cities – Warsaw, Krakow, Wroclaw and the Tri-City. One could certainly speak of a post-pandemic trend reversal, when in the face of the popularization of telework, investors considered smaller urban centers as potential locations.

Where did this change come from? After the initial enthusiasm for fully remote work models, companies are starting to take into account the fact that after the pandemic subsides, they somewhat like to see their employees in the office. Meanwhile, the base of good candidates in small towns is much smaller than in big cities, which significantly limits employment opportunities in the local market. Looking to the future, investors are once again beginning to bet on big cities.

Foreign companies invariably appreciate the high quality of domestic IT experts and this is the main reason for determining technology investments in Poland. It is worth emphasizing that the low wages argument is losing momentum. Polish specialists are no longer cheap from the perspective of companies from Western Europe or North America. Although the difference in salaries in the IT sector between Poland and Canada for example is still around 30%, not every Western businessman will easily be able to put together an effective team in our market. The demand for Polish experts increases when changing jobs, so the offer of the investor must meet certain expectations.

New year predictions

2022 will undoubtedly be a continuation of the candidate market. The factors determining recruitment dynamics will be the persistent competency gap and the above-mentioned Polish bargain. Wages will rise, although it is unlikely that the increases will be as impressive as they were in 2021. This will go hand in hand with the general calming of the employment situation in the industry. Everyone understands that there is a certain limit in terms of the financial capacity of companies and the wealth of the Polish labor market. It is not possible to work in the face of constant increases – in salaries, appointments, revenue -. Many experts changed jobs last year, so in 2022 they will take such a step less frequently.