The technology sector is undergoing rapid, but equally cautious transformation. After a period of expansion, the market is recalibrating in response to economic shifts and the accelerated adoption of artificial intelligence - marking a pivotal moment for strategic reflection. Organisations are taking time to refine their hiring plans, ensuring they invest in the right skills for the future.
For years, tech was synonymous with growth, with demand for skilled professionals far outpacing supply. The post-Covid surge amplified this trend, as businesses raced to digitise services, driving a wave of recruitment and rising salaries. Today, the landscape looks different but no less full of promise. Organisations are now focused on sustainable growth, creating a more balanced and competitive market.
The age of AI: redefining roles and skills
Generative AI has sparked innovation across most industries, and its influence on tech is profound. While some expected an immediate hiring boom, what we’re seeing is a more thoughtful and considered approach. Organisations are exploring the possibilities of AI and automation, asking critical questions:
Which roles will evolve?
What new skills will emerge?
How can teams be structured for long-term success?
This period of evaluation is paving the way for new opportunities. As businesses gain clarity, demand will shift toward professionals who can bridge traditional tech expertise with emerging AI capabilities.
Now is the time to upskill, diversify, and position yourself for the next wave of innovation. At the same time, building agile teams will ensure organisations are ready to harness the full potential of AI-driven transformation. Change is challenging, but it’s also where progress begins. And those who adapt will thrive.
A new challenge for early-career talent
One of the most significant consequences of this shift however is the diminishing number of entry-level tech roles. Tasks that once served as a gateway into the industry, such as first-line helpdesk support and manual data processes, are increasingly being handled by automation and AI-powered chatbots.
This creates a serious bottleneck for aspiring tech professionals. Education establishments have successfully encouraged more students, particularly women, to pursue STEM subjects. Yet, many graduates are now emerging with qualifications only to find that the traditional entry points have vanished. The 'start at the bottom and work your way up' path is becoming less viable.
Furthermore, the rise of remote and flexible working, while beneficial in many ways, has inadvertently impacted the development of junior talent. Effective training and mentorship for a new starter or an apprentice requires in-person supervision and the ability to shadow experienced colleagues, a dynamic that is harder to replicate in a predominantly remote setup.
However, this shift also presents an opportunity. As the industry evolves, so too must the pathways into it. Employers and educators have a chance to rethink how early-career talent is nurtured; from creating structured mentorship programmes and hybrid onboarding models to designing entry-level roles that prioritise learning and adaptability. With the right support, this next generation of tech professionals can still thrive, just via a different route.
The skills in demand
While the overall market has seen a decline, certain areas in tech are experiencing significant growth. The demand is shifting away from entry-level positions and towards senior, highly specialised roles that can drive innovation and security.
Key growth areas include:
AI and machine learning: Unsurprisingly, anything related to AI is in high demand. Roles like AI specialists and prompt engineers are becoming more common as businesses embed generative AI into their operations.
Cloud computing: Expertise in platforms like AWS and Microsoft Azure remain critical as companies continue to rely on cloud infrastructure.
Cyber security: With the rising threat of cyber attacks, senior roles such as cyber security engineers and security analysts are more important than ever. Companies are investing in knowledgeable professionals in this field to protect their digital assets.
Data engineering: The ability to manage and interpret vast amounts of data is fundamental to leveraging AI effectively, making skilled data engineers highly sought after.
Low-code/no-code development: These platforms are opening up technology roles to individuals without traditional coding backgrounds. They allow for the rapid development of applications, and expertise in this area is becoming increasingly valuable.
Beyond technical abilities, employers are placing a much higher premium on soft skills. The ‘techie’ who codes in isolation is becoming a thing of the past. Today's most valuable professionals are those who can communicate complex ideas to non-technical stakeholders, collaborate across different teams, and use data to tell a compelling story. These cross-functional skills are now considered essential.
Balancing innovation and cost: the rise of upskilling
In the current economic climate, companies are balancing the need to innovate with the pressure to be cost-efficient. Many are turning inward and focusing on upskilling and reskilling their existing workforce. This empowers existing teams with future-ready skills while preserving valuable institutional knowledge.
Many organisations are now investing in targeted development, helping employees transition from roles vulnerable to automation into emerging, tech-driven positions. Our sister company Code Nation, a Microsoft AI Cloud Partner and Microsoft Training Services Partner, has seen increased demand for bespoke programmes tailored to an organisation’s specific tech stack - a clear shift away from generic, off-the-shelf solutions.
However, internal development alone often isn’t enough to meet the pace of change. That’s why organisations are combining upskilling with strategic hiring, bringing in fresh expertise to complement internal capabilities and accelerate innovation.
For professionals looking for new opportunities, this trend underscores the importance of continuous learning. Those who proactively build their skills, especially in areas like AI and data, will be well-positioned to stand out in a competitive market.
The future of work and salaries
The expectation of remote work is now firmly entrenched in the tech sector. It is no longer a perk but the norm. Companies insisting on a full-time return to the office face a significant challenge in attracting talent. In fact, many jobseekers now expect higher salaries to cover commuting costs if required to be in the office five days a week.
At the same time, we’re seeing a shift in how senior talent engages with businesses. There is a growing interest in ‘fractional’ roles, particularly at the senior level. Fractional CTOs or consultants offer their expertise to multiple companies, providing businesses with strategic guidance without the cost of a full-time executive salary.
On the theme of salaries, with more professionals on the market, employers have less pressure to engage in bidding wars or make generous counteroffers. While niche, high-demand skills will always command premium pay - recent examples have seen Copilot experts commanding £2,500 a day - general salary expectations have become more realistic.
Navigating your next step
The technology job market is more complex than it has been in years, but it is far from stagnant. The demand has not disappeared; it has just shifted.
For employers, the focus must be on strategic workforce planning. This means investing in strategic hiring, fostering internal mobility, upskilling and creating bespoke training to bridge skills gaps. For roles where the budget doesn't match market rates, or for public sector organisations that have limited flexibility in salaries, innovative solutions like our ‘Train the gap’ product - hiring candidates with most of the required skills and investing in training to cover any deficit - can be highly effective.
For technology professionals, the message is clear: adapt and learn. Specialise in high-growth areas, cultivate your communication and collaboration skills, and embrace a mindset of continuous personal development. The storm will pass, and those who have used this time to build their expertise will be best positioned to thrive in the new landscape that emerges.
For more insights into the technology labour market and for reliable salary benchmarks for the sector, download Reed's 2026 technology salary guide here.
