The Australian tech hiring market is completely different from what it was two years ago. In 2023, we were competing desperately for any qualified engineers. Salaries were skyrocketing. Candidates had multiple offers and chose based on perks and culture fit. Companies were hiring speculatively just to get people in the door.

Now it’s different. We’re getting more applications per role. Salary expectations have moderated. Candidates are more focused on stability than compensation. The balance has shifted back toward employers.

But the shift hasn’t been as dramatic as the US tech market correction. Australia’s market dynamics are different, and understanding those differences matters for anyone building technical teams here.

What Changed

The tech downturn that hit US companies hard in 2022-2023 affected Australia later and less severely. Most Australian tech companies don’t have the VC funding dynamics that drove excessive hiring and dramatic layoffs in Silicon Valley. Our market is more enterprise-focused and grew more conservatively.

But we’ve still seen correction. Companies that over-hired during COVID are cutting back. Funding is tighter for startups. Large enterprises are more cautious about headcount growth. This has increased the supply of available candidates relative to open positions.

Remote work normalization also changed dynamics. In 2021-2022, Australian companies were competing locally and maybe with other English-speaking markets. Now we’re competing globally. Australian engineers can work for US or European companies remotely. This creates wage pressure in both directions.

Interest rate increases and inflation affected tech budgets. Companies that were casually adding headcount in 2021 are now scrutinizing every hire. This reduces demand even if businesses are still growing.

The Salary Situation

Senior engineer salaries in Sydney and Melbourne peaked around $180-200K for permanent roles in late 2022. Contract rates were pushing $1000-1200 per day. Companies were adding 10-15% annually to retain staff. This was unsustainable.

Salaries have stabilized but not really declined. We’re seeing senior engineers accepting $160-180K, which is back to pre-pandemic levels adjusted for inflation. Contract rates are more like $800-1000. Still good money, but not the peak insanity.

The biggest change is negotiating dynamics. Two years ago, candidates would counter-offer aggressively and often get what they asked for. Now there’s less negotiation. Companies make reasonable offers and candidates mostly accept them.

This doesn’t mean Australian tech salaries are low. They’re still high compared to most industries and compared to many other countries. But the explosive growth has stopped.

The Remote Work Complication

The shift to remote work during COVID was supposed to be permanent. Every company was loudly committed to remote-first culture. Then in 2023-2024, many companies started pushing for return to office, at least partially.

This created a divide. Some companies are genuinely remote-first and hire nationally or globally. Others are back to requiring Sydney or Melbourne presence. Candidates now have strong preferences about this, and it affects hiring significantly.

We’ve remained flexible about remote work, which is a recruiting advantage. But we’ve learned that fully remote teams require different management approaches and have coordination costs that we underestimated initially.

The other complication is that Australian candidates can now apply for remote roles with US companies at US salary levels. For top engineers, $250K USD working remotely for a San Francisco company is more attractive than $180K AUD working for a Sydney company. We lose candidates to this regularly.

The Skills Gap Problem

One thing that hasn’t changed is the gap between what companies need and what’s available. There aren’t enough senior engineers with experience in modern cloud architecture, distributed systems, and data engineering. There are plenty of mid-level engineers with a few years of experience in specific frameworks.

This creates two challenges: we can’t find enough senior talent for complex work, and we have more junior talent than we can effectively mentor and develop. The pyramid is inverted from where we need it.

Part of this is Australia’s relatively small tech ecosystem. We don’t have the depth of specialized talent that Silicon Valley or London have. If you need someone with deep expertise in a specific technology, there might be 20 qualified people in the country, and they’re all employed and probably not looking.

This makes hiring for specialized roles very difficult. We’ve had senior data engineering roles open for six months because there just aren’t many people in Australia with the specific combination of skills we need.

The Diversity Challenge

Australian tech has the same diversity problems as tech globally, maybe worse. Engineering teams are overwhelmingly male, predominantly white or Asian, concentrated in specific age ranges. This hasn’t improved despite years of discussion about it.

Part of this is pipeline issues. Engineering programs at Australian universities don’t have great gender or ethnic diversity. The problem starts before people enter the workforce.

But part of it is also hiring practices and workplace culture. Companies that claim to value diversity often don’t change their hiring practices in ways that would actually improve outcomes. Job descriptions emphasize specific technical skills that exclude people from non-traditional backgrounds. Interview processes test for narrow technical knowledge rather than broader problem-solving capability.

We’ve tried various interventions: blind resume screening, structured interviews, partnered with organizations that support underrepresented groups. Progress is slow. I don’t have great answers here, but I know the status quo isn’t working.

The Experience Paradox

The market has a strange paradox. Companies want senior engineers with 5-10 years of experience. But there aren’t enough of them. So companies hire more junior engineers who need time and mentorship to reach senior levels. But companies don’t have enough senior engineers to provide that mentorship effectively.

This creates a self-perpetuating problem. Junior engineers don’t develop quickly enough, which means the shortage of senior engineers persists. Companies compete for the limited pool of senior talent, which drives salaries high for that tier even while overall hiring has cooled.

The solution should be investing more in training and development. Creating clear career paths. Providing mentorship. Promoting from within. But this requires long-term thinking that many organizations struggle with, especially in uncertain economic environments.

Contract vs Permanent

The ratio of contract to permanent roles has shifted. During the boom, most roles were permanent because companies wanted retention. Now we’re seeing more contract roles as companies want flexibility without long-term commitment.

This benefits experienced contractors who prefer the higher day rates and project variety. It’s harder for people who want stability and permanent roles. And it creates a more precarious workforce where people are less invested in organizational outcomes.

From a company perspective, contractors make sense when you have project-based work or need specialized skills temporarily. They’re expensive but flexible. Permanent hires make sense when you’re building long-term team capability and need people invested in your success.

We use both, but the balance has shifted toward more contractors than we used to have. That has costs in team cohesion and institutional knowledge that we’re still figuring out how to manage.

What This Means for Hiring

If you’re hiring technical talent in Australia right now, you have more candidates than you did in 2022 but you’re still competing for quality. The market is better than it was but not easy.

Focus on realistic requirements. Don’t ask for 10 years of experience with a technology that’s been around for 3 years. Don’t require local presence if remote work is actually viable. Don’t filter out people from non-traditional backgrounds who could learn what you need.

Offer reasonable compensation but don’t overpay hoping it alone will attract talent. Culture, interesting work, and growth opportunities matter more than marginal salary differences once you’re paying market rates.

Be honest about remote work. If you require office presence, say so up front. Don’t advertise “remote-friendly” and then pressure people to come in.

Invest in junior and mid-level talent. You’re not going to hire all senior engineers. Build capability through development, not just hiring.

The Long-Term View

The hiring market will keep shifting. Right now it’s somewhat favoring employers after heavily favoring candidates. That will reverse again at some point. The underlying fundamentals haven’t changed: Australia has a shortage of technical talent relative to demand, and that’s not getting solved quickly.

Companies that treat hiring as purely transactional, optimizing for the current market moment, will struggle over time. Building a reputation as a good place to work, investing in people, and thinking long-term about capability development matters more than optimizing compensation or interview processes.

The best engineers have options regardless of market conditions. They choose companies based on factors beyond immediate compensation. That hasn’t changed, even as negotiating dynamics have shifted.

Understanding where the market is and building accordingly is what actually matters. Right now, that means there’s opportunity to hire good people who are more interested in stability than two years ago. That won’t last forever. Use it wisely.