Tech wreck eases skills pressure as start-up outcasts hit the market

While this does not mean there are no shortages in skilled staff, the extreme shortage ushered in by steep venture capital investment into start-ups alongside COVID-era digital transformation drives across corporate Australia, has been reversed, with job ads back on par with July 2019 levels.

However, in a sign that there is still a problem with suitable talent, SEEK found that while applications per job ad in ICT roles had risen over the past three months, they remain extremely low in historical terms, and are 29 per cent lower than in July 2019.

“There’s less VCs out there with wheelbarrows of cash funding competition, and so we think we have a really good opportunity going forward.”

Mike Cannon-Brookes, Atlassian.

“In all, there has been a slight softening over the past two to three months on both the talent demand and supply side, but it remains an extremely tight employment market,” a SEEK spokeswoman said.

An improved hiring market is being reported in the tech start-up and scale-up market, where recent funding has been secured, and in well established firms like Atlassian and Telstra, where tech ranks are swelling.

CEO of travel planning platform Rome2Rio Yesh Munnangi said he had been able to go on an aggressive hiring spree since the start of the year, as the company anticipated significant global growth in the travel sector as international COVID-19 restrictions were rescinded.

He said the company had managed to double its headcount by hiring 32 software engineers and data scientists in Australia.

Despite having heard plenty about a local skills shortage, Mr Munnangi said he found local talent keen to join a company working on tangible products in an area they enjoyed, and also keen to join a company that has the vestiges of start-up cut and thrust, with the security of having been acquired fairly recently by a larger industry player.


Yesh Munnangi, CEO at Rome2Rio has been able to go on an aggressive hiring spree since the start of the year. Louis Trerise

“We started putting the roles out and we saw really good resumes come through, at a pretty good rate. We have now hired 32 roles in the last 12 months and 23 of those in the last seven months alone,” he said.

Whereas last year Mr Munnangi said newly backed start-ups were bidding up prices for tech talent, fuelled by readily available VC funding, this had now cooled noticeably, and candidates were looking for stability.

“Things changed significantly in the last few months; the availability of money changed, the amount of investment changed, and you see the opposite news now, where people are talking about lay-offs or changing their hiring plans for the year,” Mr Munnangi said.

“Rome2Rio is not in a hyper growth market where we are trying to invest a lot of VC money to grow at triple or four times. We are planning for significant growth, but we’re planning in a way that we can sustain, and we are profitable, and that’s something that helps us a lot with hiring.”

The falling valuations being reported across start-up companies has also weakened the stock options remuneration lure that many unprofitable companies had been using in the past few years.

Mr Munnangi said he found most Australian tech experts were looking for a good base salary, and saw a strong stock component as an add-on to salary, rather than significantly replacing cash in the bank.

Unsolicited CVs

Founder and CEO of tech firm Local Measure Jonathan Barouch said it was clear that the local skills shortage had eased off as he has begun receiving numerous unsolicited CVs from tech workers looking for a new job.

Reports of lay-offs at well-funded Australian tech companies like Brighte, Sendle and Indebted have emerged alongside more dramatic examples of tech job losses like the sudden collapse of marketing technology firm Metigy.

“This is the first time we are ever getting inbound CVs, and they are high quality. Every day I am getting two or three CVs, and if you’d have asked me four months ago if I’d be getting inbound CVs from engineers, or product or tech, I would have laughed at you,” Mr Barouch said.

“I’m seeing the market bifurcate between those businesses that are growing, that are strong and potentially raised some capital towards the end of last year, and those that haven’t, and I think you’re going to see that divide even more clearly over the next three or four months.

“The last 18 to 24 months it has been really hard to get good talent in Australia, so the fact that it’s easing a bit is a good thing.”

Mr Barouch said all of his staff were aware of peers and friends in other companies that had lost their jobs, or feared they soon would, so he was ensuring he kept his team fully appraised of the company’s position, which was strong from a funding perspective.

Big end of town

Late last year Telstra group executive for transformation, communication and people Alex Badenoch said COVID-era border restrictions had exacerbated perennial tech skills shortages in the Aussie market, and that the telco had 1000 roles to fill.

She said that since then conditions had eased somewhat, and Telstra only had about 100 tech roles to fill. However she said there remained work to do at a national level to ensure a better supply.

“The tide hasn’t turned; tech skills remain in high demand and low supply,” Ms Badenoch said.

“Australia still needs a long-term solution. This must involve building a bigger talent pipeline by prioritising STEM skills from early childhood right through to undergraduate studies and beyond, and then ensuring that governments and businesses are working with the education sector to get people started in successful, fulfilling careers.”

When hiring in the current market, Ms Badenoch said Telstra was benefiting from a number of advantages over other large hirers, in that it had publicly discussed its flexible work policies, and could offer attractive packages.

In April she said more than 1000 new staff had joined Telstra over the past two years, across all kinds of roles and spoke about the internal cultural events and policies that had been used. This, she said, was useful in enticing highly prized tech workers to the company when they became available.

“One thing we’re increasingly seeing is people with in-demand tech skills looking for the right balance of culture, flexibility and pay when choosing which organisations to work for,” Ms Badenoch said.

“Supporting this balance puts employers like Telstra in a really strong position to attract and retain talent.”

Australia’s most prominent tech company, Atlassian, has moved to take advantage of the cooling market by investing in staff. At is annual results announcement on Friday it said it had hired 634 employees in the last quarter, mostly in research and development roles, and more than 2300 new staff members in the 2022 fiscal year.

Speaking after the results were released, co-CEO Mike Cannon-Brookes said the company had just had its two biggest quarters of hiring.

“We’ve been pretty clear that we’re playing offence … we’re using this period of time to deepen our strategic position and increase the advantages we have over the competition,” Mr Cannon-Brookes said.

“There’s less VCs out there with wheelbarrows of cash funding competition, and so we think we have a really good opportunity going forward. We also have spent a lot of time retooling our hiring pipeline over the last two years, and are really excited with where we stand at the moment.

“Obviously, we don’t just look at the volume of hires, we continue to push quality of the talent available, and we think that that will get easier in difficult circumstances.

“We made the same or similar sort of play in the 2008-2009 period, we paused for a little while then we realised that we were in a very strong position as a company relative to other companies out there, and so we hired well through that period and saw the benefits of that for the three, four and five years afterwards.”

Mr Cannon-Brookes’ co-founder, Scott Farquhar, will be attending Prime Minister Anthony Albanese’s skills summit at the start of next month, to discuss long-term methods to improve the supply of tech skills, regardless off the temporary conditions experienced due to market fluctuations.

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