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Report: UK’s Software Industry grows at 5.3% per annum

Written by James Adams

London, an "Elite" City for Software Development

A recent report by Karat has revealed the top cities to hire “elite” and “strong” software engineers from in 2024. Among the 30 elite cities, London occupies the 20th spot.

Leading technical interviewing company Karat recently unveiled its rankings of the top cities worldwide for hiring top-tier software engineers in 2024.

The 2024 Top Cities to Hire Software Engineers report provides insights into locations rich with top software engineering talent. Half of the top 30 cities this year are in the United States. The rankings consider two distinct categories—"elite" and "strong." Among the elite cities listed, London secured the 20th position, positioned between Denver and Chennai.

Elite and strong candidates

The first ranking highlights 30 cities known for hosting significant concentrations of elite candidates. These cities have a minimum of 10,000 total software engineers in their greater metropolitan areas.

According to Karat, elite candidates are software engineers who consistently perform in the top quartile across global technical interviews. This assessment is based on Karat's extensive dataset of over 350,000 interviews.

These candidates typically receive premium compensation and frequently have the luxury of selecting from multiple competing job offers. Many of these top-tier software engineers come from high-bar tech companies.

Companies have historically faced difficulties in securing elite candidates, with job offer acceptance rates typically ranging between 50 percent and 55 percent. However, this trend shifted in the past year due to a tightening labour market and layoffs in prominent big-tech organisations that traditionally attracted much of the elite software engineering talent. In 2023, the acceptance rate for these candidates increased significantly to 73 percent.

Elite candidates showed greater geographic dispersion this year, possibly due to the ongoing prevalence of remote hiring and the emergence of global capability centres in cost-effective markets.

Meanwhile, the second set of rankings highlights top cities with strong candidates, who, while not consistently in the top quartile, perform well enough in technical interviews to advance to the next hiring stage in most companies. These candidates are often recruited by larger enterprise organisations across sectors like finance, insurance, healthcare, energy, retail, automotive, telecommunications, and manufacturing. They form the backbone of many software engineering teams.

Members of this group still retain significant decision-making authority, and similar to elite candidates, they are accepting job offers at a higher rate compared to previous years. In 2023, close rates for strong candidates exceeded 80 percent, a notable increase from 66 percent in 2022 before the labour market began to tighten.

Software engineer recruitment in the UK

Karat's study ranks London 20th globally for elite talent, placing it in the second position within Europe. In terms of strong talent, London occupies the 25th spot worldwide, as well as the fourth in Europe. London also boasts the 12th largest talent pool, underscoring its significance as a hub for tech talent within the region.

This finding aligns with the UK's software development industry's steady growth, averaging 5.3 percent annually from 2018 to 2023. Demand surges from sectors like healthcare, finance, and education are driving this growth. By 2028, the industry is expected to reach US$46.72 billion, employing over 235,000 people.

The study emphasises the diversity of London's tech ecosystem, which includes prominent companies such as Barclays and Deliveroo. The median salary in the city stands at $114,000, with fintech, e-commerce, and cybersecurity emerging as key areas of expertise within the local tech industry. Large corporations like IBM, Microsoft, and Google also maintain significant operations within the country.

Despite this growth, the software development industry in the UK faces challenges due to talent shortages and skills gaps. An estimated 705,000 tech vacancies are projected across the country by 2025, while there are currently only 465,000 software developers in the country.

To prepare aspiring developers to enter the career market, various software development bootcamps are widely available in the country, including, of course, the Tech Educators code bootcamp. Our bootcamp guides developers in building innovative web applications and equips them with the skills needed for a successful career in the industry.

The course will cover various points in 12 weeks. To find out if a career in tech is a good choice we recommend that aspiring developers join our Coding Bootcamp Taster Session for a hands-on experience with coding to explore if a career in the tech industry is the right choice.

Through the course, students will learn to build a solid foundation in HTML, CSS, JavaScript, and web app creation. Further along, student will learn React, PostgreSQL, and third-party APIs all moving into Next.js. There will be Project Weeks in Weeks 5 and 12, offering the chance to apply the acquired skills and practice teamwork in real-world projects.

About the Author

James has 8 years with Fortune 200 US firm ITW, experience of managing projects in China, USA, and throughout Europe. James has worked with companies such as Tesco, Vauxhall, ITW, Serco, McDonalds. James has experience in supporting start-up and scale up companies such as Readingmate, Gorilla Juice and Harvest London. James completed his MBA at the University of East Anglia in 2018.

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