Why Software Developer Pay is Skyrocketing
Dan Gordon • October 6, 2021
In short, it’s a simple supply and demand issue, driven by a global shortage of software developers.
This surge in demand for developers has one major issue: there are just not enough out there.
Looking at the current market, I see four positive plays by organisations:
- Investing in retaining their great developers. They know good software comes from stable, cohesive teams. This investment comes through proactive pay increases; share and equity offers; work from home flexibility as standard, to effectively improve work/life balance; and a new sensitivity by employers to understand specific needs of their people to increase job satisfaction and retention. To get this right, companies need to have heightened EQ and have great relationships and communication in place with their techo’s - a fair definition of good tech company culture. This is being executed best by hyper-growth Australian start-ups and scale-ups who hire software developers constantly: think Canva, SafetyCulture and Atlassian.
- Using skilled recruiters. Whether you use internal recruitment teams which have become more skilled and better paid, or specialist recruitment agencies, this is critical in identifying the right talent. But this isn’t the full solution to the problem of a skills shortage. However, investing in, and partnering with, capable internal and external recruiters gives companies the upper hand in hiring great talent.
- Improved hiring processes. Companies are competing better in the interviewing and hiring process, through fewer steps, less time between steps and faster decision-making. The hard truth is, if employers can’t recognise what they’re looking for when they see it, then they need to better understand what it is they are looking for. To be competitive in securing talent, current best practice is interview-to-offer in under a week.
- Growing their own talent. In recent years, slow-changing universities haven’t been able to adapt to the needs of the fast-growing IT industry. Making this situation even worse, a lack of international student enrolment since Covid means there is even less talent out there. The industry has realised it must take ownership by developing its own talent. We are therefore seeing an increase in cadet programs, both internally-run and, increasingly, outsourced through IT recruitment companies, who attract bright young talent to be trained in business and IT, and as the next wave of home-grown software developers.
In 2026, the conversation around IT recruitment in Australia is shifting. While hiring demand remains strong across areas like cybersecurity, cloud, and digital infrastructure, the real challenge facing organisations is no longer just attracting talent — it’s building a sustainable workforce that can grow and adapt over time. For years, businesses have focused on filling immediate skill gaps. But with ongoing shortages in critical tech roles, organisations are now recognising that retention is just as important as recruitment. High turnover not only impacts delivery timelines but also drives up costs and erodes institutional knowledge. Employers who prioritise employee experience, career development, and flexible work are seeing stronger retention outcomes and gaining a competitive edge in a tight market. Workforce sustainability is quickly becoming a key business priority. This means moving beyond reactive hiring and thinking more strategically about how teams are structured, supported, and developed. Leading organisations are: Adopting hybrid workforce models (contract + permanent) Investing in upskilling and internal capability development Shifting toward skills-based hiring rather than rigid role definit ions Building pipelines of talent rather than hiring only when gaps appear This approach not only reduces hiring pressure but also creates more resilient, future-ready teams. Relying solely on reactive recruitment is becoming increasingly risky. With demand for specialist skills remaining high, waiting until a role becomes critical can lead to long hiring timelines and missed business opportunities. Instead, organisations are taking a more proactive approach, planning workforce needs and partnering with recruitment specialists who understand the market. In today’s environment, successful businesses are those that treat talent as a long-term investment, not a short-term fix. This means aligning hiring strategies with broader business goals and ensuring the right balance between immediate delivery and future capability. At Peoplebank , we work with organisations to go beyond traditional recruitment, helping build sustainable workforce strategies that combine access to high-quality talent with long-term planning. Ready to strengthen your team? Use our one-step Submit a Role form today and let our specialists connect you with the right talent to support your business now and into the future.
In today’s competitive hiring landscape, attracting talent is only half the challenge ; retaining top tech talent is where organisations gain a true advantage. With demand continuing to outpace supply across areas like AI, cybersecurity, and cloud, businesses must focus on creating environments where employees choose to stay and grow. 1. Offer More Than Just Salary While competitive pay remains important, it’s no longer the primary driver of retention. Tech professionals are increasingly prioritising flexible work arrangements , meaningful projects, and career progression. Organisations that offer hybrid work, clear development pathways, and exposure to innovative technologies are more likely to retain high performers. 2. Invest in Career Development Lack of growth is one of the leading reasons employees leave. Providing access to training, certifications, and internal mobility opportunities helps keep employees engaged and future-focused. Upskilling not only benefits the individual but also strengthens overall organisational capability. 3. Build a Strong Workplace Culture Retention is closely linked to culture and leadership. Teams that feel supported, recognised, and aligned to a clear purpose are more engaged and less likely to leave. Managers play a critical role in fostering open communication, feedback, and trust. 4. Prioritise Employee Experience From onboarding through to ongoing engagement, the employee experience should be intentional. Regular check-ins, recognition programs, and clear performance expectations all contribute to higher retention. This year, successful organisations are those that take a proactive, people-first approach to retention, balancing commercial outcomes with employee needs. At Peoplebank, we work with organisations to not only attract top tech talent, but to build strategies that help retain them long-term. Get in touch to find out more !
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