71.6% companies rate their hiring pool as strong. At the same time, 53.7% struggle to find candidates with the required skills.
This contradiction defines the IT labor landscape in 2025: while talent is available, finding the right fit is increasingly challenging. Skills evolve faster than roles, salary expectations are rising, and hiring outcomes vary by specialization and timing. As a result, workforce decisions for IT service companies are becoming more complex each year.
This research was conducted by Techreviewer, an independent platform that analyzes and ranks IT service companies. We leverage a network of over 9,500 service providers to help IT services executives, owners, and HR leaders understand current hiring conditions and benchmark workforce strategies.
At the beginning of 2026, we analyze the results of 2025 to provide an up-to-date view of the IT labor market and its ongoing changes. This research is the second IT labor market report published by Techreviewer. The first study, IT Labor Market in 2024, explored hiring demand, retention approaches, labor market expectations, and more. This year's report continues that work, allowing us to track how expectations and practices evolve over time.
In this report, readers will find:
An assessment of talent availability, skill expectations, and hiring practices.
A year-over-year view of hiring demand and recruitment pressure.
An analysis of retention drivers, work models, and productivity.
A forward-looking outlook on AI impact and demand for IT professionals in 2026.
Key Research Takeaways
Talent availability is rated positively by 71.6% of companies, and technical interviews remain the dominant validation method, used by 94.0% of respondents.
Upskilling and reskilling are standard operating practicesthat companies implement to get expertise, with 83.6% of respondents running internal development programs.
Hiring demand shows high volatility, with 43.3% of companies reporting growth in 2025 and 26.8% reporting a decline.
Recruitment pressure focuses on skill fit, with 53.7% of companies reporting difficulty finding candidates with the required expertise.
Companies address hiring challenges primarily through internal capability building, led by training initiatives at 50.7% and remote work adoption at 49.3%.
Most respondents view their implemented retention strategies as highly or moderately effective, with 77.6% rating their retention approach positively.
Companies cite daily work conditions as the main drivers of worker retention, led by work-life balance at 61.2% and salary and benefits at 55.2%.
Hybrid and remote work models dominate preferences, and productivity remains stable or improves for 79.1% of companies.
Methodology
This research is based on an online survey conducted in December 2025 among IT services companies.
We collected responses through Techreviewer's internal network of service providers. The survey ran over the course of one month and targeted executives, owners, and senior decision-makers in IT services organizations.
In total, the study includes responses from more than one hundred IT services companies across multiple regions and company sizes. The questionnaire covered hiring demand, talent availability, recruitment practices, retention, work models, and expectations around AI and skills.
Respondent & Company Profile
Respondent's Role Within the Company
Overall, the data reflects a business-led view of the IT job market.
Most respondents are owners and senior decision-makers, including CEOs and founders, accounting for 55.2% of the sample.
Marketing roles account for 31.5% of respondents, covering managers, CMOs, and other marketing specialists.
HR roles contribute 6.0% of responses.
Sales and business development roles make up 5.9%, combining sales representatives and business development leads with a shared commercial focus.
CTOs account for only 1.4% of respondents, so technical leadership is minimally represented in this review.
Overall, the data reflects a business-led view of the IT job market.
Experience Level of Survey Respondents
The survey primarily captured responses from experienced professionals.
55.7% of respondents report having 4–12 years of IT experience. Another 38.3% have 13–20 years. Early-career respondents are rare: 6.0% have under 3 years of experience.
Overall, 64.3% of respondents have more than eight years of IT experience, making the results more representative of mature, informed perspectives than entry-level views.
Company Size of Respondent Companies
47.8% of respondents work in companies with 10–49 employees. Another 13.4% come from teams with fewer than 10 people.
Mid-sized companies are also well represented. 35.8% of companies fall into the 50–249 employee category, split between 50–99 employees at 20.9% and 100–249 employees at 14.9%.
Large companies are rare: 3.0% of respondents report 250–999 employees.
Geographic Distribution of Respondent Companies
The survey has a broad international reach.
India accounts for 21.2% of respondents, and the United States for 20.3%, making them the two largest hubs and together representing over 40% of responses.
Europe is represented primarily by Poland (9.6%), Lithuania (5.8%), and the United Kingdom (4.1%). Vietnam contributes 5.8% and is the largest Asian hub outside India.
The remaining 33.2% of responses come from other European countries and the Asia-Pacific region, with smaller contributions from Latin America and the Middle East, each representing only a minor share individually.
Talent Availability & Skill Expectations
Key Insights:
Respondents describe a hiring environment that functions but rarely feels easy. Candidates are generally available, as 71.6% of respondents support this view, while finding the right fit in seniority, skills, and salary often takes time.
Assessment focuses on hands-on experience and practical knowledge. Technical interviews are the lead, with 94.0% of respondents using them, supported by coding tests and hands-on tasks. Portfolios add value, while certifications and references usually play a supporting role.
Employers take a pragmatic approach to soft skills. They prioritize problem-solving at 37.3%, followed by communication and teamwork. Adaptability carries more weight than process-oriented traits.
Upskilling has become part of standard practice. 83.6% of companies run learning programs and treat continuous development as a basic requirement for retention and competitiveness.
Satisfaction With Talent Availability
Respondents generally describe the availability of experienced specialists as satisfactory. 71.6% express satisfaction with their current hiring pool, indicating that qualified candidates are usually available.
At the same time, 22.4% of respondents report reservations, indicating recurring friction over skill fit, seniority, and salary expectations. These responses reflect a form of dissatisfaction rather than confidence in availability.
Clear dissatisfaction remains limited. Only 6.0% describe talent availability as poor, suggesting that severe shortages affect a relatively small share of companies.
Overall, companies view the hiring pool as workable. A large satisfied group coexists with a smaller dissatisfied segment, reinforcing the view that candidates are available, while smooth hiring remains uneven.
How Companies Evaluate Technical Skills
Technical interviews dominate: 94.0% of companies use them as the primary filter.
Many teams add proof-based checks. 65.7% run coding tests, and 52.2% use hands-on project assessments.
Signals from past work are also standard: 43.3% of respondents review experience and portfolios to confirm real delivery.
Certifications and reference checks play a secondary role, with 19.4% and 22.4% mentioning them, respectively.
Third-party assessments remain uncommon, with 7.5% of respondents reporting use. Tooling familiarity and team fit as technical proxies appear rarely, each cited by 1.5%.
The pattern is clear: interview first, practice second, paperwork last.
Soft Skills Prioritized in Hiring
Soft-skill expectations focus on thinking and collaboration.
Problem-solving comes first. 37.3% of respondents say employers prioritize the ability to work through new tasks, even when requirements shift, or obstacles appear.
Communication and teamwork follow as common expectations, cited by 22.4% and 19.4% of respondents, respectively. These skills reflect the realities of distributed and cross-functional IT work.
Adaptability and critical thinking reinforce the same demand. 16.4% of respondents cite adaptability, and 11.9% highlight critical thinking, signaling the need for engineers who can adapt quickly to new technologies and challenge weak assumptions when proposing solutions.
Time management and similar process traits appear less often. Personality traits receive minimal attention across responses.
Overall, companies prioritize flexible thinking and team fit over individual personality traits.
Availability of Upskilling and Reskilling Programs
Upskilling and reskilling programs are widely adopted.
83.6% of companies invest in structured learning to keep employees up to date with evolving technologies. This indicates that continuous skill development is expected from the employee side.
Only 16.4% of respondents report having no such programs, suggesting limited tolerance for skill stagnation in the IT services market.
The data shows that internal skill development is now a key mechanism for retention and competitiveness.
Linux Foundation research reinforces this pattern. In its 2025 Linux tech talent study, 97% of organizations describe upskilling as strategically important, and 90% already run technical training programs.
Recent Changes in IT Hiring Demand
Key Insights:
Hiring demand over the past year shows net growth: 29.9% of companies report stable demand, 43.3% report growth, and 26.8% report decline. Compared to 2024, stability fell, and volatility increased. There is no clear trend - the situation depends on specific companies.
Central recruitment pressure shifted to finding the right skills. The share of respondents reporting difficulty finding candidates with the right skills increased from 38.1% до 53.7% compared to 2024. The reported shortage of qualified candidates jumped from 28.6% to 49.3%.
Companies respond primarily through capability-building measures. 50.7% of companies rely on training and development as a core response to recruitment challenges. 44.8% focus on upskilling current employees, up from 38.0% in the previous year.
Remote work rose the fastest to 49.3% from 29.0%. Regional expansion fell, and salary increases became less common.
Overall, demand remains net-positive, but hiring is increasingly uneven and skill-driven. Companies are shifting from paying more and expanding searches to focusing on training and smarter hiring.
Change in Hiring Demand Over the Past Year
Hiring demand over the past year has been split.
29.9% of companies report stable demand. An equal share reports a slight increase. Another 13.4% saw a substantial increase.
Declines are less common overall. 26.8% of companies report a decrease, either slight or significant.
Overall, 43.3% of companies report growth, outweighing the 26.8% reporting decline. This indicates selective hiring and cautious expansion.
Hiring Demand: Year-Over-Year Comparison
Compared to 2024, the share of companies with stable demand has declined, while slight growth has become more common. At the same time, significant declines have increased, indicating higher volatility.
Still, demand for IT professionals remains net-positive, but the landscape shows more volatility than last year, with fewer companies in a stable state and more reporting hiring pressure or contraction.
Research from World Economic Forum supports this pattern at the global level. Technology roles, including software developers, AI specialists, and data specialists, remain among the fastest-growing worldwide.
Growth continues, yet it concentrates in specific roles and projects. Companies that rely on static hiring plans face a higher risk, while those that align recruitment closely with delivery pipelines and skill demand can navigate volatility more effectively.
Key Recruitment Challenges in 2025
Recruitment challenges in 2025 cluster around skills and pay.
The biggest issue is fit. 53.7% of companies report difficulty finding candidates with the required skills, and 49.3% of companies point to a general shortage of qualified professionals. This reflects a specialization gap rather than a lack of available engineers.
Cost adds pressure. 37.3% of companies face high salary expectations, often reinforced by competition from other employers, cited by 26.9% of respondents.
Process and brand issues matter less. Around 13–14% of companies mention long hiring cycles or weak brand recognition. Location constraints and remote work adaptation affect a smaller share of companies.
Recruitment Challenges: Year-to-Year Comparison
Compared to 2024, in 2025, challenges moved from "where to hire" to "who fits."
Skill fit became harder. The share of companies reporting a lack of candidates with the right skills rose from 38.1% to 53.7%. The reported shortage of qualified candidates also jumped, from 28.6% to 49.3%. The gap is growing.
Salary pressure stays high and increased slightly year over year.
Location barriers weakened. Limited local talent and remote-work adaptation are mentioned much less in 2025, which suggests distributed hiring is now routine.
Process and retention issues rose modestly, adding friction as companies chase a narrower set of specialists.
Challenges have become less geographic and more structural, driven by deeper specialization, higher expectations, and increased competition for scarce skills.
Gartner highlights a structural source of this pressure. Its research shows that AI-assisted hiring has increased resume inflation, candidate misrepresentation, and noise in early screening. As a result, employers spend more time validating real expertise.
Measures Used to Address Recruitment Challenges
Companies address recruitment pressure through a combination of short-term access measures and longer-term capability investments.
1. Fast-response measures
To expand the candidate pool quickly, companies rely on remote work and geographic reach.
Remote work options are used by 49.3% of respondents, allowing access to talent beyond local markets.
35.8% of companies apply regional expansion to increase reach in locations with stronger talent supply.
2. Capability-building measures
At the same time, companies invest in strengthening internal capacity.
50.7% of respondents use training and development programs to build skills aligned with delivery needs.
44.8% of companies practice upskilling current employees to address emerging skill gaps.
Investments in culture and benefits appear in 37.3% of responses and support both attraction and retention.
3. Financial measures
Direct financial incentives play a supporting role.
28.4% of companies increase salaries, while 10.4% use sign-on bonuses to address specific hiring gaps.
Overall, the data shows that companies combine rapid hiring tools with structural investments in skills and engagement, reflecting a preference for sustainable recruitment.
Measures to Address Recruitment Challenges: Year-to-Year Comparison
From 2024 to 2025, companies shifted toward building talent in-house.
Training and development grew the most and became the top response. Upskilling current employees also gained weight, showing a move toward growing skills internally.
Remote work saw the fastest rise, nearly doubling. Flexibility is now a standard hiring tool.
Companies rely less on regional expansion and salary increases than they did a year earlier.
Compared to 2024, responses moved from quick hiring fixes to longer-term solutions.
This pattern also appears at a global scale. Linux Foundation research shows that organizations are 3.2× more likely to invest in upskilling existing employees than to rely on external hiring. Remote and flexible work practices are widely used to expand access to talent while keeping compensation growth under control.
Companies increasingly treat training, upskilling, and flexibility as core operating levers rather than HR add-ons. The ability to develop and redeploy skills internally now defines hiring resilience more than aggressive pay tactics or geographic expansion.
Read the full research here: https://techreviewer.co/blog/it-labor-market-in-2025
Originally published at Techreviewer.co.
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