Latvia's IT salary growth slows, but competition for talent stays fierce

Salary growth in Latvia's IT sector has slowed to its lowest level in six years, according to a survey by consultancy Figure Baltic Advisory. Base monthly salaries rose 5.9% this year, compared with 6.1% last year. Total compensation growth, which includes bonuses and other monetary benefits, slowed even more sharply, from 8.4% last year to 6.7% this year.

Demand for specialists remains strong

Despite the slower pace, the picture is more complex than it appears. According to the survey, 54% of industry organizations increased their headcount over the past year, and 61% plan to do so by year-end. This suggests that demand for workers hasn't disappeared — companies have simply become more selective about the specific skills they need.

Viesturs Bulāns, head of Helmes Latvia, notes that Latvian IT professionals now compete on a global scale, since remote work allows foreign employers to hire local talent without requiring relocation. A programmer who might earn 20 euros an hour in Latvia can earn between 50 and 100 euros an hour working for a company abroad.

Public procurement dilemma

Bulāns argues that when the state procures IT solutions, the lowest price should not be the deciding factor, since this limits the quality of specialists available for projects and undermines long-term sustainability. At the same time, he acknowledges the state must maintain strict requirements for suppliers and oversight of public spending.

Shifting skill demands

Demand is rising for data analysts, data engineers and cybersecurity specialists, while the spread of artificial intelligence is creating a need for people who can integrate these tools into business processes. Entry-level specialists' salaries, after an earlier decline, are beginning to recover, signaling that the market is becoming more differentiated based on specific roles and skills rather than simply working in IT.