Why businesses are boosting their software budgets

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The Covid-19 pandemic exposed a certain fragility across businesses of all sizes, but these setbacks didn’t do too much in holding companies back from pushing ahead with digital transformation initiatives. It isn’t a case of back to normal now either, as they seek and adopt new technologies on a much larger scale than they did previously.

There appears to be a collective agreement within the tech sector that now is the time for change. A report by Foundry has found that 85 per cent of businesses are increasing their technology budgets over the next 12 months, with nearly half (47 per cent) specifically saying software budgets will increase.

But why is this happening, and what does it mean for the tech talent market?

Software development: a key focus 

Businesses already recognise the role software plays in enabling business, but Foundry’s Role & Influence of the Technology Decision-Maker 2022 report showed that leaders are striving to further improve business performance and growth through software development.  39 per cent of those surveyed said new tech purchases would be as additions rather than replacements. 

The report found that, of those planning to increase their tech budgets, 35 per cent of them said software will be the greatest allocation of the budget. Investing in software tech can help businesses expand customer bases, boost productivity, and elevate a business’s accessibility. 

But, the real reasons for businesses turning to new software suppliers (46 per cent) were three-fold. While the current products and services no longer met their business needs, businesses noted an increased level of investment was required by their current supplier. The third and final reason was, somewhat inevitably, poor customer service from current suppliers.

Driven by demand

The rise in demand for software development will, as you might expect, have a significant impact on the talent market. With businesses looking to improve their performance using software, there is inevitably a higher demand for skilled Developers amidst what is currently a candidate-driven market.  

A little more than half of organisations said they have increased their budget in order to hire Software Developers. That being said, HR leaders will need to understand the main motivations of candidates, and ensure they structure the work environment adequately to attract and retain this talent, optimise longevity and retain a focus on job satisfaction. 

This can be achieved by promoting a collaborative and flexible work environment, encouraging creativity to solve problems and removing points of friction (known as “Developer Velocity”). Businesses are now offering training budgets and skill enhancement opportunities, as well as progression opportunities and forward-thinking benefits. For the businesses who hear these requirements and think “that doesn’t sound like us,” then extra budget will certainly be required – changes cost money.

A report by Coding platform CodinGame found that two thirds of all Developers moved to remote working during the pandemic, with 70 per cent of them now saying they want to continue working remotely. If employers are going to compete in such an active candidate market, they have to match this new demand.

Bigger budgets create bigger opportunities, and that’s what businesses are investing in. By using technology, and most notably software, in the right ways, companies will not only keep up with their competitors, but lead them. 

Whether you are a Software Developer looking for your next opportunity, or an employer seeking the best talent to drive you forward, now is the time to speak to us about your plans. Get in touch.

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