IT hiring worsens in SA, as firms halt recruitment

IT hiring worsens in SA, as firms halt recruitment

By Sibahle Malinga, ITWeb senior news journalist.Johannesburg, 27 May 2024

Recruitment of IT professionals has been consistently slowing down.

South Africa’s technology sector is listed among those that have seen the biggest decline in hiring activity over the past three months, as recruitment across the board declines by 11% year-on-year, compared to the first quarter of 2023.

This is according to the latest CareerJunction Employment Insights report, which provides an analysis of the supply and demand trends in the online job market, from data gathered from Saongroup South Africa, which works with over 5 000 of SA’s top recruiters.

According to the report, despite the continued demand for IT skills, the sector continues to experience a dip in hiring activity, with a 26% year-on-year decline over the last two years.

Slowing hiring activity in SA’s recruitment market may be partly attributed to current economic uncertainty, it says. Economic instability, whether domestic or global, can dampen business confidence and investment, leading companies to be cautious about expanding their workforce.

“Although demand for IT professionals remains high in the recruitment market, compared to other roles, over the past two years, hiring for IT professionals has been consistently slowing down,” notes the report.

“The main contributor to this trend is the decreasing demand for software developers (although they are still in high demand). When comparing hiring activity over the last three months with the previous three months (October, November, December 2023), hiring activity has decreased by 15% for IT professionals.”

The IT sector is listed as the third sector to witness a drop in hiring in the first quarter of 2024, after business and management, and the finance sectors, respectively, notes the report.

ITWeb previously reported a decline of 6% in tech recruitment in August, September and October 2023. This followed a 17% decline at the beginning of 2023, according to CareerJunction.

Similarly, data from the State of the ICT Sector in SA 2024 report, released in April by the Independent Communications Authority of South Africa (ICASA), shows employment across the telecoms, broadcasting and postal sectors collectively decreased by 5.6% in 2023, mirroring SA’s overall unemployment challenge. SA’s unemployment rate climbed to 32.9% in Q1 2024, according to Stats SA.

The ICASA report states the total combined employment for the three sectors was 49 689 in 2023, down from the total of 56 709 employees recorded in 2019.

CareerJunction notes that similar to the hiring activity trend for IT roles, job-seeker engagement in the IT sector decreased slightly during 2023.

“However, job-seekers engaged at a significantly higher level in 1Q2024, which showed the highest job-seeker engagement for the past nine quarters at least. Year-on-year, job-seeker engagement for IT roles has increased by 24%,” according to the report.

Jobs bloodbath continues

The 2024 South Africa Report: State of the Software Developer Nation, compiled by OfferZen, shows demand for software developers witnessed the biggest decline in the IT sector, as the industry continues to weather the impact of tech retrenchments and the global economic downturn.

Software development was one of the most in-demand professions globally over the last decade, but the market has since declined. The number of local developers retrenched in the past 12 months was double the number of developer retrenchments in 2022, it says.

The shift in IT hiring came amid huge declines in hiring activity at the world’s biggest technology companies in 2022, as job posts closed faster than new hiring positions were opened.

Organisations in the sector have been announcing large-scale job cuts since the last quarter of 2022. These include multinationals Amazon, Google, Meta, Google parent company Alphabet, Salesforce, X (formerly Twitter), Spotify, IBM, SAP, Microsoft and Cisco.

Many of these tech companies benefitted from increased demand for their services during the pandemic lockdowns, but as customer behaviour returned to pre-pandemic times, some witnessed declining demand for services and dropping share prices.

Retrenchments are ongoing in 2024, with several companies across the globe introducing a second or third round of terminations, according to layoffs tracker Layoffs.fyi.

Firms that have curtailed a significant number of employees this year so far include Tesla, Amazon, Google, TikTok, Snap and Microsoft, it says.

In SA, companies that have introduced retrenchments so far this year include Ster-Kinekor, Vodacom, Superbalist and the South African Post Office.

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Provided by SyndiGate Media Inc. (Syndigate.info).

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