2023 Data Analytics Salary & Recruitment Trends Guide
2023 Salary & Recruitment Trends Guide: Data Analytics
The war for talent intensifies
In 2021, the hiring demand reach heights rarely seen over the last 33-year history at Barclay Simpson. The UK vacancies hit record levels last year, climbing a staggering 114% over the 12-month period.
Strong growth was arguably to be expected. Recruitment had been constrained throughout 2020 due to a perfect storm of Covid-19 lockdowns, Brexit, impending IR35 reforms and other commercial uncertainties. As some of these dark clouds began to clear, many organisations opened the hiring floodgates.
Much of this pent-up demand spilled over into 2022, with remarkable buoyancy during the first six months of the year across most of the sectors and disciplines that we recruit for. And while the recruitment market has slowed over the latter half of 2022, we’re still experiencing healthy demand that is well above long-term averages.
Similar trends have emerged nationwide. The REC/KPMG graph shows that both permanent and temporary vacancies remain at historically high levels, even after four consecutive quarters of falling activity.
However, permanent placements contracted in October for the first time since February 2021. They fell again in November – albeit at a slower pace – as talent shortages tightened their grip and concerns about the economic outlook magnified.
Source: KPMG and REC, UK Report on Jobs, December 2022
The Office for Budget Responsibility has predicted the UK will fall into recession in 2023, with the nation’s economy forecast to contract by 1.4% next year.
Despite this, Barclay Simpson research has revealed that 79% of employers of cyber security, data and governance professionals still plan to hire additional permanent staff over the next 12 months.
This is only a slight drop from 85% last year, and there has actually been a modest year-on-year increase in the number of organisations who say they are ‘very likely’ to recruit in 2023 (51% versus 46% for 2022).
A lack of suitable candidates remains a major stumbling block for employers, with 98% of respondents claiming it is challenging to find the right people at the moment. Of these, 58% say it’s ‘very challenging’ – up from 43% in 2021. Meanwhile, huge demand mixed with low supply continued to create upward pressure on salaries throughout 2022. Nearly four out of five (78%) employers now point to compensation expectations as a key issue preventing them from hiring, which is a significant increase from the 63% who said the same last year.
From a candidate perspective, an overwhelming majority (94%) remain bullish about the current job market. This is broadly consistent with last year’s survey and understandable given the favourable environment at present.
But professionals may be asking themselves whether there is much room for salaries to rise further with a likely recession on the horizon in 2023.
Top three factors preventing hiring:
Compensation challenges
2022: 78%
2021: 63%
Insufficient technical/regulatory knowledge
2022: 59%
2021: 59%
Poor cultural fit
2022: 23%
2021: 21%
Contract recruitment
The interim market has remained reasonably active across most of the disciplines that we cover, with a small increase in the number of employers who are utilising contract or temporary resource compared with last year (64% versus 57%).
Overall, contract demand lagged slightly behind permanent roles throughout the majority of 2022, but we expect this gap to shorten and possibly reverse if uncertainty over the economy continues to mount next year. REC/KPMG figures indicate this is already happening across the broader recruitment market, with temporary billings growth outpacing permanent placements from June onwards in 2022.
Our research shows interim, contract and co-source staff currently comprise approximately 14% of teams and functions. Specific project work remains the most common reason for these hires (35% of employers), although there has been a 50% year-on-year increase in the number of businesses who are using interim workers because they are simply unable to source permanent employees.
Primary reasons for using interim, contract and co-source staff
The after-effects of IR35
What long-term impacts of the pandemic have you experienced when hiring? Changes to off-payroll working rules were introduced in April 2021, and they continue to influence how both organisations and contactors approach interim roles.
While only 6% of employers say that IR35 reforms have significantly impacted their ability to engage contractors, nearly half of respondents have been affected to some degree. Nearly one in three organisations now prefer to secure interim staff through fixed-term contracts (FTCs), but these arrangements remain largely unpopular with candidates who receive neither the security of a permanent position nor the financial incentives that typically come with contract work.
Instead, most contractors have either increased their rates for ‘inside IR35’ roles (44%) or will only consider ‘outside IR35’ opportunities (33%). Just 5% have actively sought FTCs.
As a result of these trends, we’ve seen an increase in day rates over the last year. Whereas in 2021, approximately half of candidates were receiving between £600 and £800 per day, this figure has climbed to between £700 and £900 this year.
The long-term impact of Brexit
Three-and-a-half years after the EU Referendum, the UK left the EU on January 31 2020, with a transitionary period ending on December 31 the same year.
Despite fears that Brexit would significantly affect the availability of staff at a time when talent shortages are rife, 57% of employers told us it has not impeded their ability to recruit suitably qualified candidates at all.
Nevertheless, nearly a fifth (17%) claim their hiring has been obstructed by Brexit, limiting the number of high-quality applicants available from continental Europe. There also appears to be no signs of a Brexit ‘dividend’ so far, with few, if any, positive outcomes emerging for recruitment.
Our consultants are reporting a greater willingness among organisations to consider sponsorship arrangements, although we are not yet seeing this materialise in terms of final offers.
Currently, 46% of employers sponsor overseas candidates, but this could be set to rise if candidate shortages persist.
Post-pandemic work trends
Covid-19 lockdowns caused a huge and immediate upheaval in the way many people worked at the height of the pandemic. In April 2020, nearly half (46%) of the entire UK workforce was working from home, according to ONS data.
But has there been a lasting impact on the workforce?
The response from employers is mixed, with 56% saying there has been no long-term effects from the pandemic on employees, while 43% have noticed a change in attitudes or behaviours among staff.
Of the latter, a minority (4%) saw an increase in early retirements. But by far the biggest post-pandemic trend reported by employers has been an overwhelming rise in the number of people seeking part-time or flexible working arrangements.
Indeed, four out of five employers have experienced an uptick in flexible working requests, indicating a widespread shift in how candidates view traditional in-office roles.
Attitudes toward flexible working
Demand for flexible working had been rising steadily over the last decade, and the pandemic certainly accelerated this trend.
A recent Cisco survey revealed that 79% of employees agree that remote working has helped them to improve their work-life balance. Six out of ten people also believe they are producing better quality work, with a similar number reporting enhanced productivity.
Barclay Simpson’s research echoes these findings. Three-quarters of candidates say they would like to work from home at least three days every week. Of these, 28% want fully remote roles. This has repercussions for recruitment and retention, as 69% of candidates told us they would consider changing jobs if they couldn’t have their preferred mix of home and office working.
Fortunately, many organisations recognise the importance of flexible working and an overwhelming majority (95%) have implemented remote working policies. Hybrid models are particularly popular, with two-thirds of employers allowing their staff to work from home between two and three days a week.
Very few (2%) organisations have instituted a full return to the office, although this practice is more common among larger US banks, tech firms and asset managers.
Ultimately, the vast majority of employers (88%) anticipate that the changes they’ve made to their flexible working arrangements because of the pandemic will remain in place over the long term.
This relaxation of policy could be why fewer employers currently believe their flexible working approach is causing recruitment and retention problems.
Last year, 46% of respondents admitted they were concerned their policies could be hindering their ability to attract, hire and retain staff. However, only 28% said their remote and hybrid working models were still an issue in 2022.
In the war for talent, flexible working is clearly becoming a key battleground. What was once considered a ‘nice to have’ perk is now seen as an essential part of many roles, and employers who are slow to embrace this trend may find it difficult to source the right talent in a market where high-quality candidates are scarce.
Salary trends
Starting salary growth for permanent roles continued to break records in 2022, as ongoing candidate shortages intensified competition for talent. Salary inflation peaked in March, with the REC/KPMG Report on Jobs reporting the sharpest rise in starting salaries in nearly 25 years of data collection.
Since then, markets have cooled slightly. Salaries are still experiencing solid growth, albeit at a reduced rate. Furthermore, while pay pressures remain at historically elevated levels, November saw the slowest increase in permanent salaries and temp pay since April 2021.
Across the markets in which we specialise, similar trends are occurring. We saw astonishing salary increases in 2021 and early 2022, but the rate of growth has predictably calmed as the year has progressed.
Given the current climate, it’s perhaps not surprising that salaries have been the biggest driver of candidates entering the job market. Half of professionals chose remuneration as their primary reason for seeking a new role, with career development a distant second (19%).
Many organisations recognise the challenges they face finding the right people, whether they’re looking to replace outgoing staff or grow their functions. As a result, counteroffers are becoming more common – and increasingly attractive – as employers fight hard to keep hold of their best staff.
More broadly, employers intend to increase base salaries for existing employees by 7% on average over the next 12 months, a slight increase from the 6% in 2022.
However, organisations are already feeling the pressure of meeting salary demands. Just 4% of employers believe candidates’ expectations are very aligned with their company’s salary bandings – a notable drop from an already low base of 10% last year.
Only 4% of employers say that candidate’s salary expectations are very aligned with their company’s salary bandings.
Bonuses and benefits
On the whole, bonuses remained relatively stable in 2022, although there was a year-on-year fall in the number of employers who said they would be offering a bonus over the next 12 months (85% versus 95% in 2021).
The average bonus received this year was equal to 19% of an employee’s base salary, with employers also typically contributing 9% of an individual’s pay towards a pension. These figures are almost unchanged from 2021.
More broadly, last year we began to see an increasing number of employers guaranteeing bonuses for candidates who switched roles. This trend has become even more pronounced in 2022, with buyouts now a standard offering across multiple disciplines that we recruit for.
Elsewhere, flexible working has traditionally been an attractive perk that employers could offer prospective candidates, potentially offsetting salary demands. However, for many roles, some level of remote or hybrid working is now the norm, and there is in fact a growing expectation among candidates that they will receive in-office equivalent salaries regardless of where they work.
Some of these wider trends are reflected in our survey results, which show flexible working is now the most common benefit – tied with bonuses – offered to candidates, with 86% of professionals receiving it.
As the disconnect between salary demands and employer budgets widens, organisations may need to either lower their expectations when hiring or find new benefits to attract the talent they so desperately need.
Four-day working weeks are one possibility. They have proven immensely popular among both employees and businesses that participated in recent pilot programmes across the UK, Ireland and other countries. We may therefore see more employers considering such policies, as they seek to gain a non-payroll competitive advantage in the recruitment market.
Data Analytics Salaries
This salary guide table provides indicative base salary ranges for positions in specialist areas across locations which provide enough data to give meaningful figures. They are not comprehensive.
Data Engineering, Architecture, Business Intelligence and Analytics
| Area | Data Architect | Data Engineer | Data Analyst | BI |
|---|---|---|---|---|
| London | £100,000 - £130,000 | £70,000 - £90,000 | £60,000 - £75,000 | £75,000 - £90,000 |
| South East | £100,000 - £130,000 | £70,000 - £90,000 | £60,000 - £75,000 | £75,000 - £90,000 |
| Regional | £90,000 - £125,000 | £65,000 - £85,000 | £50,000 - £60,000 | £60,000 - £75,000 |
| Contract day rate | £700 - £1000 | £500 - £750 | £400 - £500 | £500 - £600 |
Based on research published by Barclay Simpson, an international company in internal audit and corporate governance recruitment.
