After years of prosperity, the Spanish technology sector faces an unprecedented situation: the “hiring freeze”

In recent years, one of the economic sectors with the best job prospects and good salaries has been the technological. Companies have nudged each other and offered everything they could to bring in programmers, analysts or cybersecurity technicians. But both the available indicators and the experts consulted agree that the party is coming to an end. That there are clear symptoms of cooling in the technology labor market in Spain.

And some advance that in 2024 things could get even worse.

A survey in which 350 Spanish professionals participated carried out by Circular and Joppy, two IT recruitment firms, suggests that we are facing a turning point. Just over half of those consulted do not rule out a salary adjustment in 2024. This country’s IT professionals, who weathered the previous Covid-19 crisis so well, are today unclear about their future.

Today almost 50% of technology employees recognize that they have received fewer job offers That the last year. Recruitment specialists and recruitment firms also believe there is a slowdown in the market. And there are many who predict that this decline will continue next year. Although in the long term they are optimistic and believe that the situation will improve.

The experts consulted by SamaGame for this report make a disturbing assessment: computer scientists are still necessary, but the crazy offer of positions with always rising salaries is coming to an end, at least for the moment. Let’s see the causes.

A ghost called recession

Pedro Montarelo became more than a decade ago and in that time his company has been able to place more than a thousand technology professionals. Montarelo confirms that, although the year started with a lot of movement, a lot of demand for professionals and “skyrocketing salaries”, in spring a slowdown began to be noticed.

“The war (in Ukraine) affects less, but the fact that several European countries have entered into recession, especially Germany, has led many companies to the (English term for freezing hiring) and even layoffs. I confirm this with almost all the managers I speak with. It is only hired in the case of very urgent projects.” Montarelo has European clients and recognizes that its activity has been affected since the beginning of summer. “There are companies that have gone from hiring us for 20 or 30 positions to two or three,” he says.

(Emilio García/Unsplash)

Adecco’s numbers also refer to a cooling of the technological labor market in Spain. According to Óscar Rodríguez, ICT sector director of The Adecco Group, since the second quarter of the year there has been “a significant drop in the number of vacancies.”

In his opinion, it is not a very “worrying” fact because between 20% and 30% of vacancies They are still uncovered. But it does show a slowdown in a sector that continues to be “an inexhaustible source of employment” and that has experienced increases of 10% in the number of positions offered in recent years. “To the economic situation in Europe, we must also add the political situation in our country. This situation of uncertainty also greatly affects the decision-making of companies when making investments,” explains Rodríguez.

Layoffs reach programmers

Xavi Sala, head of SEO and content at Prosperity Digital, a placement firm specialized in technological profiles and based in Barcelona, ​​also speaks of “a certain slowdown.” He remembers that in April and May the bursting of the “bubble” in Silicon Valley was much talked about. The American impasse put a brake on financing plans for new projects in Spain, which spread fears and led to conservatism in the hiring of many non-technological companies.

“It was the first time, that I remember, that programmers were fired in unicorns like Glovo. This had never happened before,” he highlights. Although he assures that the profiles that have suffered the most have been above all the “non-technical” ones, such as those responsible for or in digital marketing, or UX designers. And, due to age, the break has hit the juniors more than the seniors. For Rodríguez, interest in profiles related to CRM (customer management tools), with languages ​​such as PHP or with computer support departments () has dropped a lot.

Montarelo also alludes to the effects of the second round of layoffs that, at the end of last year and the beginning of this year, were announced by large technology companies, such as Microsoft, Meta, Amazon, Google or Salesforce, among many others, and which affected in total more than 100,000 professionals, in many cases with long careers and high salaries.

“In Spain, the subsidiaries of these companies have also made layoffs, and the staff has been and is nervous,” he explains. Furthermore, there is the case of Spanish companies that have invested heavily in digitalization processes for which they have needed technicians and programmers, but now They have frozen their plans. And that has also slowed down the IT job market. “There is a general stoppage in hiring, but in IT above all. The sector is also affecting all profiles. Perhaps cybersecurity is suffering a little less,” he emphasizes.

This expert believes that it is difficult to predict how long the hiring halt will last and assures that everything will depend on the evolution of the economy, especially the German economy. But he advances that there will be no good news until the end of the year or the beginning of next year.

(Raj Rana/Unsplash)

Montarelo also points out another trend that is putting pressure on the technology labor market in Spain: “As it is increasingly difficult to find talent in this country, companies are opening development projects in other Eastern European countries. Bulgaria is one that has a lot of buzz.” . In this way, multinationals distribute hiring between Spain and other countries, and avoid being at the expense of what happens in a single labor market.

The evolution of salaries

Regarding the impact of this on salaries, opinions are diverse. Montarelo says that he is not yet having an impact on remuneration. The logic is the following: in a more complicated environment like the current one, the professional who changes jobs “Ask for more money”or else it stays where it is.

At this point, remember that changing jobs in Spain is a risk because if an employee does not pass the trial period in his new company (six months, according to the law), he does not even have the right to collect unemployment: “Today change It represents more risk than before, and that is why those who assume the change ask for even more money.

However, Sala considers that in recent times payrolls have been growing “15% or 20% annually”, and that in some positions they have even increased by 25%. These are true salary bubble figures, according to him. In 2022, remuneration has already suffered a stoppage and the average salary in the sector rose by only 6%. And in 2023 the tone is similar.

In any case, Sala is optimistic and predicts that this turning point for employment in the technology sector it will be little noticeable if the viewing angle is opened and looks to the next ten years: “The growth of job offers in the ICT sector continues to be above that of other sectors because there is still a great need for digitalization, with many industries moving to the data economy.”

This optimism is shared by Rodriguez, from Adecco, who points out that the explosion of generative AI and its application to areas such as customer service, human resources or marketing will increase investments in technology and the demand for professionals.

Teleworking: source of tension

Teleworking was a constant during the pandemic and since then it has been slowly declining in Spain. However, today, and according to data from an InfoJobs macro survey, 22% of employed people still work from home, totally or partially. The computer sector is one of those that offers this possibility the most.

Job offers for an analyst, developer or engineer almost always involve the possibility of remote work. Recruitment companies are clear that teleworking is the benefit most valued by professionals. And they believe that in 2024 it will continue to be key to attracting talent.

(Andrew Neel/Unsplash)

For Pedro Torrecillas, CEO and co-founder of Circular, the perfect work model would be “one that offers a culture but that would give employees the option of going to the office if they wish (…) It is important that companies organize in-person sessions or social events that encourage them to attend in person, but the key is that they feel they can choose and are not forced to move if they do not want to.

However, the preference of workers has begun to clash with the wishes of employers in the last year, which in many cases are asking, more or less explicitly, and at the request of parent companies, such as Apple or Google. , a total or majority return to the offices.

“The companies I speak with want less teleworking, and that is a problem because candidates continue to cling to teleworking. Some processes that we have open are costing us because the company offers one or two days at most of remote work, and the candidates, especially developers, They ask for more, three or four days“says Montarelo.

“With the layoffs and the halt in hiring, companies have regained a bit of control. Before we were in a market where the candidates had all the negotiating power, and now the situation is back to balance,” says Sala. “You still see flexibility in the offers, but there are not so many with remote work all the time,” she adds.

Montarelo assures that the youngest professionals have become accustomed to teleworking and do not conceive of a scheme where there is no flexibility, much less a dynamic of five days in the office, and from 9 to 6. And he clarifies that it is the “more mature” profiles that are who, for fear of losing their jobs, are less demanding in this regard. In any case, the latest Infojobs macro-survey ensures that in Spain still today one in two companies gives their employees the option of teleworking: 38% of them with a hybrid formula, and 13% completely remotely.

By Lawrence Smith

driven by a passion for technology and creative pursuits. As a tech analyst, he applies his expertise to analyze and optimize complex systems, ensuring organizations stay at the forefront of technological advancements. Beyond his analytical skills, Lawrence is an inventor and innovator, constantly pushing the boundaries of what's possible. As a tutor and mentor, he shares his knowledge and inspires the next generation of aspiring minds. With a keen eye for creativity, Lawrence is also a content creator and creative director, crafting captivating experiences that resonate with audiences. Alongside his technological pursuits, he holds an advanced degree in Child and Youth Care, embodying his dedication to making a positive impact on young lives.