Post-pandemic overinvestment in IT infrastructure, coupled with economic challenges like high inflation, rising interest rates and political uncertainty, has slowed job growth. By late 2024, many companies adopted a cautious 'wait and see' strategy, delaying large-scale hiring and transformation efforts. But how is it progressing?

Well, new research from Reed has revealed that advertised salaries in the BI and data science sector have seen a 3.5% rise over the past year.

In this article, Michele Smith, Managing Director of Reed’s technology division, provides an overview of this sector and the key considerations businesses in this area need to bear in mind.

Change in demand

The demand for Cloud data engineering skills surged in 2024, as more companies migrated to platforms like Azure, AWS, and GCP. This shift fostered intense competition, with consultancies excelling due to their ability to secure limited talent. The growing skills gap became evident, as hands-on expertise and practical knowledge outweighed certifications.

This was reflected in salary inflation across the nation. The average salary for a data scientist, on average, increased by 13.1%, with BI managers also increasing by 12.5%. It’s important to note that this isn’t the case in every region salary spike varying across different locations.

For example, in the Midlands, database developers saw the biggest salary increase (24.1%), and data scientists and BI managers also saw slightly higher increases than the national average (13.9% and 15.8% respectively). On the other hand, Wales saw a 12.8% salary decrease for data scientists.

The challenges and how to respond

The lack of experienced professionals posed a significant challenge for those in this industry, especially as many preferred working on Cloud development rather than maintaining legacy systems. To achieve the flexibility, reliability, and security of Cloud solutions, businesses increasingly relied on third-party providers to manage migration projects.

On top of this, tech professionals faced growing pressure, as employers prioritised knowledge of specific tools over transferable data skills. However, we did find that some progressive employers had shifted their focus to core competencies and the broader value new hires could offer, rather than demanding exact, like-for-like experience.

We’re also seeing that the market continues to reflect the ongoing shift toward hybrid working models. Fully remote roles are increasingly rare, as companies prioritise in-person stakeholder collaboration. Four-day work weeks and enhanced benefits like pensions and healthcare are increasingly popular, but flexibility remains the dominant factor driving jobseeker decisions. This will impact the talent businesses will be able to source – again touching on the importance of those within the industry to look at which region is offering the most competitive salaries in their specific specialism. 

Adding slightly more fuel to the fire is that employers currently hold more bargaining power, so the potential for a market rebound later in 2025 could lead to increased candidate mobility. As a result, many professionals are cautiously staying in their roles due to the uncertain market but remain open to new opportunities. If job volumes recover, companies may encounter an uptick in resignations and heightened competition over salaries.

To maintain their workforce, businesses will need to look beyond simple financial incentives. Although hybrid and flexible working arrangements have become indispensable for employees, a supportive company culture, balanced work life, and opportunities for professional growth are equally vital. By investing in learning and development, particularly in cutting-edge areas like AI and process automation, organisations can create an environment where employees feel empowered and valued. When individuals feel supported in advancing their careers, they’re far more likely to remain loyal, even in a competitive job landscape.

The BI and data science sector is poised to balance internal team expansion with third-party partnerships given the fact that accurate data remains critical for business optimisation, driving ongoing demand for skilled professionals. However, concerns linger over excessive outsourcing, potentially hindering in-house team growth and innovation. As mentioned, employers who prioritise training and supporting their teams are more likely to succeed in navigating these challenges. While the sector remains dynamic, its future hinges on aligning workforce expectations with market demands and addressing skill gaps in Cloud technologies and advanced data engineering.

The key takeaway

Despite its current challenges, the technology labour market remains a dynamic and essential part of the global economy, offering both organisations and professionals significant opportunities for growth and transformation.

As we continue into 2025, the technology labour market is set to evolve, with a growing focus on emerging skills and new roles. Organisations that prioritise innovation, foster continuous upskilling, and remain agile in meeting shifting employee expectations will position themselves for sustained success. While economic uncertainties may continue to shape hiring decisions, the demand for tech talent remains strong, particularly in critical domains such as data management.

Employers face the delicate task of balancing short-term cost efficiencies with long-term strategic ambitions, ensuring they can attract and retain top talent. For technology professionals, staying competitive in this dynamic landscape will demand an unwavering commitment to lifelong learning and adaptability.

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