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What is the situation with salaries in IT as of the end of 2022?

Due to the unstable economic situation and external threats, the growth of salaries for IT specialists has slowed down for all levels of experience.

It should be noted that a significant decrease in salaries has been avoided due to the following factors.

• The relatively small internal market for the IT segment in Ukraine.
• A significant portion of Ukrainian companies work in European, American, and Asian markets—the start of hostilities did not break their financial flows.
• Some Ukrainian companies partially (opening offices) or completely relocate to other countries (Poland, the Czech Republic, Portugal, the United Kingdom, Spain, etc.), where they can evacuate employees, hire new ones, and continue working in a stable mode. This has led to an increase in requests for market research for IT markets in EU countries.
• Most foreign companies have remained in the Ukrainian market.

At the same time, inflation in the country creates the impression that the figures are significantly higher. But if we compare purchasing power and salaries, in some cases (namely salaries of middle-level and senior-level IT specialists), we may notice a slight decrease in the minimum levels due to rising inflation during Q2-Q3.

The slowdown of inflation in Q3 gives us optimism for 2023. This factor is not as influential for senior+ and lead specialists, for whom demand remains relatively high.

• At the beginning of 2022, the trends of 2021 persisted. By the end of February 2022 (before the full-scale invasion), there was a 5% increase in salaries for in-demand professions.
• In the late spring and summer of 2022, a rollback to the end of 2021 could be observed. In some cases, a decrease in the starting salary level for junior specialists was noticed (compared to 2021). Such a trend persisted throughout the fall. The influx of switchers from other fields to IT is one of the factors leading to the reduction of the starting level. However, switchers do not meet the demand for highly skilled professionals.
• The salaries of senior and lead-level specialists remained at the level of 2021. In certain niches (related to cryptocurrencies in Q2 and machine learning in Q3, cloud technologies, and cybersecurity in Q4), spikes in growth of 10-15% were observed. In the case of cryptocurrencies, the spike went downhill. However, in the case of machine learning and cloud technologies related to data science, it remains at a high level.
• Many companies began cost optimization. For example, some companies canceled Ukrainian medical insurance for relocated employees. Also, things such as team building, business trips, and corporate training were reduced.
• It is worth mentioning separately the gray niches of gambling, which are de facto in a parallel reality and are not so affected by the economic situation. Currently, gambling companies can afford relatively higher salaries than other niches. As of the end of Q4, the difference averaged 15-20% among larger players.

Salaries by qualification levels

Junior specialists’ salaries vary from a 5% decrease in outsourcing to a 2-5% increase in product companies and outsourcing.

• The main factor is the decrease in the number of jobs for beginners. Companies are focused on personnel retention and cost optimization. It is also necessary to consider the reduction.
• One of the key factors for the decline in demand is the increase in the number of people who switch to IT from other industries. Due to increased competition for jobs, the level of salaries for junior specialists remains at the level of the end of 2021 in product companies and has decreased to 5% in outsourcing companies.
• At the same time, the demand for junior+ specialists (1-2 years of experience) increased during the year, which led to an average increase in salaries of 2-5%. The demand for such specialists is especially high in areas with a limited talent pool, such as embedded software, IoT, and DeFi.
• At the same time, companies show interest in beginners by providing opportunities for on-the-job training and, as a result, building strong loyalty from such specialists.
• The salaries of mid-level specialists have increased on average by 5-10% over the year.
• The main factor: large projects require many people who can maintain product efficiency.
• At the beginning of the war, many foreign companies started actively hiring Ukrainian developers, the majority of whom were middle-middle+ level qualified.
• There are also negative factors – a shift in recruiting focus by employers. Currently, companies are more interested in highly skilled specialists who can directly influence the project’s development and prospects.
• It is also necessary to take into account waves of staff reductions. In this context, maintaining a large corps of mid-level specialists is an inefficient approach that requires optimization to keep the company afloat.

The salary of highly skilled IT specialists (senior and above with 2-6 years of experience) remains at the 2021 level with episodic growth up to 15% in high-demand niches (such as finance/banking, machine learning, formerly crypto, cybersecurity).

In all cases, it is also worth considering the mobilization factor – many IT specialists have gone to the front lines to defend the country, creating a shortage of personnel.

Changes in developers’ salaries from 2021 to 2022 look like this:

Demand for C-level has significantly decreased compared to 2021, but this has not had a critical impact on salary levels.

• Companies do not seek changes in top management during times of instability. As a result, when companies start looking for new top managers, the requirements and expectations are much higher, especially in the areas of risk management and business continuity planning.
• In the case of foreign companies, the reduction of Ukrainian management due to external risks plays a role.
• Relative shortage of highly skilled specialists is evident.
• A large number of specialists have inflated expectations that do not correspond to their skills and experience.
• In addition, the segment of C-level specialists has been affected by cost optimization and their tasks have been distributed among the rest of the management.
• There have been cases where companies have been able to hire top managers with salaries 50% lower than their previous positions, but this only applies to CEO, COO, and CFO positions. Technical C-level positions (CTO, CIO) continue to have stable demand.
• Meanwhile, there has been a surge in interest in CMOs from crypto companies during Q2 and Q3. That was the main driver of salary growth in the industry.

Changes in the average salary level of C-level positions from 2021 to 2022:

Subjective forecasts for 2023:

The unpredictable situation on the front can make any forecast doubtful. However, the market will adapt – as shown in 2022.

In any case, Ukrainian IT specialists will have places to work. The position of foreign partners depends directly on the situation on the front and its impact on peaceful territories.

The escalation of the situation at the beginning of Q4 scared off many foreign companies, but the reduction in shelling volumes stabilizes the situation. If similar events do not occur in 2023, the interest of foreign companies will continue to grow.

Demand for specialists will gradually recover during Q1 2023 and will reach the trend of Q3 2022 in Q2 2023.

Significant changes in the salary situation are not expected. There will be spikes in interest in certain niches. The trend of increasing interest in specialists in machine learning, cloud technologies, and cybersecurity remains stable.

If you want to know more about the features of the IT market in 2023, as well as how to make strategic decisions based on market analytics, I invite you to watch the online webinar via link.