The Australian IT and digital landscape is a dynamic and often unpredictable environment. The first half of 2025 has been a rollercoaster, a story of stop-start momentum that has kept business leaders and professionals on their toes. Yet, beneath this fluctuating surface, a current of cautious optimism is gaining strength, promising an exciting and transformative period ahead.

So, what’s really happening in the tech job market? Are salaries rising? Which skills are in demand? And how can businesses attract and retain top talent in this competitive climate?

At Montagu Group, we’re about to launch our definitive 2025/2026 IT Salary Guide, packed with data-driven insights and expert analysis. But you don’t have to wait. In a recent episode of our Conversations That Connect podcast, our specialists, Suki and Tayla, provided a sneak peek into the key findings. This post unpacks their conversation, giving you a comprehensive overview of the trends, challenges, and opportunities shaping the future of work in Australia’s tech sector.

The Market’s Pulse: A Story of Cautious Optimism

If the first six months of 2025 had a theme, it would be “hurry up and wait.” As Suki noted, the market has been characterized by bursts of activity followed by periods of quiet contemplation. “We’ve had stop, start, stop, start, stop, start,” she explained, capturing the frustrating rhythm many have experienced.

However, this isn’t a sign of a struggling market. On the contrary, the underlying sentiment is significantly more positive than it was this time last year. This isn’t just a feeling; it’s backed by tangible evidence. A crucial indicator of business confidence is the renewal of contracts for contingent workers.

“We’ve just gone through a massive contract renewal, and I think all our contractors have been renewed,” Suki shared. “Even contractors that we were thinking would finish in July have been extended to the end of the year.”

This is a powerful signal. It shows that businesses are not only committed to their current projects but are also planning for the future. They are choosing to retain valuable knowledge and invest in their existing talent pool, suggesting a strategic shift towards stability and long-term growth. While the market may not be moving at the breakneck speed of previous boom years, the foundations are solid, and the momentum is building steadily.

By the Numbers: Key Statistics from the 2025/2026 IT Landscape

To truly understand the market, we need to look beyond sentiment and dive into the data. The upcoming 2025/2026 IT Salary Guide is built on the latest statistics, updated as of May 2025. This fresh data provides a clear and accurate picture of the current state of play.

A Stable Market with Rising Salaries

One of the most reassuring signs of a healthy market is stability in employment and growth in compensation. The data confirms both:

• Unemployment Rate: The unemployment rate has held steady at a low 4%, indicating a tight labour market where skilled professionals are highly valued.
• Employment-to-Population Ratio: This metric has seen a slight but positive increase, moving from 64.1% to 64.3%. More people are participating in the workforce, contributing to economic activity.
• Salary Growth: Most importantly for professionals, salaries are on the move. Tayla highlighted a significant increase, with average salary growth jumping from 4.5% to 5.2%. This demonstrates that companies are willing to pay a premium for the right skills.

A Surprising Shift in Tech Talent Demand

For years, the narrative has been dominated by a massive, ever-widening skills gap. However, new data from the Tech Council of Australia introduces a fascinating twist.

“Last year, they said that they needed 600,000 more workers by 2030,” Tayla reported. “This year, they’re saying we only need an additional 200,000.”

This is a staggering decrease of 400,000. Does this mean the skills shortage is over? Not quite. A more likely explanation is a re-evaluation of what constitutes an “IT role” or a shift in how technology is being implemented. Despite this revised forecast, the demand for tech talent remains incredibly strong. Job vacancies in the tech sector grew by 2.9% over the last year, with over 339,000 total openings in the past 12 months.

The market is maturing. The demand is still high, but it’s becoming more focused and specific as organisations refine their digital strategies.

The Rise of Contracting and the Internal Talent Shift

One of the most significant structural changes we’re observing is the bifurcation of recruitment strategy. As businesses ramp up for major digital transformation projects, the demand for flexible, specialised talent has soared, leading to a boom in the contracting market.

“I feel like we’ve definitely seen an increase in contracting the last six months, versus the permanent roles,” Tayla observed. “There’s a lot of companies who are stepping into large project work.”

In parallel, many organisations are strengthening their internal talent acquisition teams to handle permanent hires. This creates a dual strategy:

1. Internal Teams focus on building the core, long-term workforce and fostering company culture.
2. Specialist Agencies, like Montagu Group, are engaged to source high-calibre contractors for specific, time-bound projects where speed and specialised expertise are critical.

“More companies are taking the permanent employment internally… and then outsourcing the contracting side,” Suki confirmed. This is a smart, strategic approach that allows businesses to remain agile while building a stable foundation. For IT professionals, it means a wealth of opportunities in the contracting space, often with competitive daily rates and the chance to work on cutting-edge projects.

The New Entry-Level: Navigating Higher Barriers to Entry

While opportunities abound for experienced professionals, the path for those just starting their careers is becoming more challenging. The concept of an “entry-level” job has fundamentally changed, particularly in high-demand fields.

Tayla pointed out, “There’s higher entry barriers in software engineering, cybersecurity, and data science.”

Gone are the days when a university degree was the only prerequisite for a junior role. Today, employers are asking for more. “How am I supposed to get into an entry-level role when the entry-level roles aren’t actually entry-level?” Tayla asked, echoing the frustration of many graduates. “You still need one to two years’ experience, or even up to three years, for an entry-level role.”

This paradox—needing experience to get experience—is forcing a rethink of career pathways. Suki suggested a return to a more traditional model: “Years ago… the natural path was doing support work, and then you started getting the exposure.”

Aspiring developers, analysts, and cybersecurity experts may need to consider “sidestep” roles in IT support, testing, or administration to get their foot in the door. This practical experience can be invaluable, providing the real-world context that employers are desperately seeking and paving the way for a move into a specialised role down the line.

Emerging Tech Trends: Where is the Industry Heading?

The tech industry never stands still. Our 2025/2026 IT Salary Guide delves deep into the technologies that are defining the next wave of innovation. Here are the key trends to watch:

The Age of Merged Roles: Hello, DevSecOps

Silos are breaking down. To increase efficiency and improve outcomes, businesses are merging previously distinct functions. The rise of DevSecOps is a prime example, integrating security into every stage of the development lifecycle. This trend requires professionals with a hybrid skill set, who understand both development principles and security protocols.

The Next Frontier: XR, Spatial, and Quantum Computing

Prepare for a reality check—or rather, an extended one. Extended Reality (XR) and Spatial Computing are moving from niche concepts to practical business tools. Alongside them, Quantum Computing looms as a technology with the potential to be a “complete game changer,” as Tayla put it. While it’s still complex and “over my head,” its ability to solve problems impossible for classical computers will revolutionise everything from medicine to finance.

The Stalwarts: AI, Cyber, FinTech, and MedTech

While new trends emerge, the established powerhouses continue their reign. Artificial Intelligence (AI) is now a standard part of the business toolkit, and Cybersecurity remains a top priority amid growing threats. The specialised fields of FinTech and MedTech are also seeing explosive growth as they drive innovation in their respective industries.

Attracting Top Talent in 2025: It’s More Than the Paycheck

With a tight labour market and increasingly selective clients, how can your business stand out? The answer lies in moving beyond a transactional relationship with employees. While a competitive salary is essential, top talent today wants more.

“Nobody wants your standard benefits anymore,” Tayla stated emphatically. “You need to be creative.”

This means thinking outside the box. Flexible work arrangements, professional development budgets, wellness programs, and meaningful equity are becoming powerful differentiators. Furthermore, authenticity is paramount.

“Are you being honest with how your business is being perceived to what you actually do?” Tayla challenged. A glossy careers page is meaningless if the day-to-day reality doesn’t match. Top candidates do their due diligence, and a mismatch between perception and reality is a major red flag.

As clients become “extremely picky” about who they hire, businesses must present a compelling and authentic employee value proposition (EVP). For more on building a powerful EVP, resources from thought leaders like Gartner can provide an excellent starting point.

Get Ready for the Full 2025/2026 IT Salary Guide

This article is just the tip of the iceberg. The full Montagu Group 2025/2026 IT & Digital Salary Guide will be released soon, providing an unparalleled level of detail, including:

• Detailed salary breakdowns for dozens of roles across all major Australian states.
• Specific data for Brisbane and the Sunshine Coast, reflecting the unique dynamics of the Queensland market.
• Practical, “no-fluff” advice for businesses on how to attract, retain, and develop talent.
• Actionable insights for professionals on how to position themselves for career growth in the coming year.

The next six months promise to be a pivotal time for the IT & Digital sector. With cautious optimism in the air, rising salaries, and a wave of new technologies, the opportunities are immense.

Are you ready to navigate the market with confidence? Keep an eye on our website for the full guide, or contact Montagu Group today to have a conversation about how these trends impact your business or your career.

Key Takeaways

• Market Is Cautiously Optimistic: Despite a “stop-start” feel, the market is positive, with contract renewals signaling business confidence.

• Salaries Are Up: Average salary growth has increased from 4.5% to 5.2%.

• Contracting Is Booming: Project-based work is driving a surge in contracting opportunities. Many companies now outsource contract recruitment while handling perm roles internally.

• Entry-Level Is Harder: New graduates face high barriers, with “entry-level” roles often requiring 1-3 years of experience. A “sidestep” into a support role may be a viable strategy.

• Skills Gap Narrative Is Changing: The projected talent need by 2030 has dropped from 600,000 to 200,000, suggesting a more nuanced and focused demand.

• Merged Roles Are the Future: Be prepared for hybrid roles like DevSecOps that combine multiple disciplines.

• Benefits Matter: To attract top talent, companies must offer creative, meaningful benefits and ensure their company culture is authentic.

• The Full Guide Is Coming: The comprehensive 2025/2026 IT Salary Guide will offer detailed salary data for major states, plus specific insights for Brisbane and the Sunshine Coast.

If you have a burning topic you’d like to discuss, don’t hesitate to reach out at hello@montagu.com.au.

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