How do businesses retain talent in tech?

M1 Magazine

How do businesses retain talent in tech?

The UK tech sector has continued to be a significant part of the economy. It is worth more than £400 million a day and it’s estimated that a new tech company is founded in the UK every 30 minutes.

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Posted 4th October

Whilst the growth in the UK tech industry is of course exciting, there is a significant problem on the horizon. The digital skills crisis and lack of talent mean that this economic growth and value could be all too easily punctured. 94% of tech employers believe that there is a skill and talent shortage.

As Nancy Parsons, CEO of talent management firm CDR Companies explains:

“There is a talent shortage, which is expected to grow. Numerous studies show that recruiting tech talent is becoming more and more difficult. Competition is fiercer than ever.”

The lack of skills spells significant problems for tech companies’ growth and profitability, 76% believe that the skills crisis will hit their profits. And the shift in demand for different skills is also happening at a rapid rate; although tech job ad listings dropped by 57% in 2020 the demand for robotics skills jumped dramatically in parts of the UK.

They increased 115% in Liverpool, 253% in Leeds and a remarkable 400% in Newcastle. The need for more skills relating to automation, AI and robotics is only likely to increase at a fast rate. But the rate at which new talent is qualifying is not keeping pace. Meaning it has rarely been more important for tech companies to invest in retaining their talent.

So, what are the major hurdles?

The pandemic showed that remote working long term was a legitimate option. Many workers now have little desire to return to the old patterns of office hours and 79% of tech professionals want to continue working from home. The steep competition also means that it is harder to win over potential employees with job openings for software engineers across just 10 companies amounting to 0.2% of software engineers worldwide. This situation coupled with the fact fewer people are coming into the working economy equipped with the right skills mean it really is down to employers to recruit well.

How can you retain talent?

1 Understand that retention starts with recruiting

Retention needs to start at the very beginning. By looking for employees who will align themselves with the values and everyday workplace practices. By taking this into account and seeing a new hire as a long term prospect, retention becomes easier.

2 Realise the importance of remote working and the fact work has changed

The shift in working patterns that the pandemic brought means that employers need to look closely at what actually makes their employees happy. Whilst remote working may be a large part of the pull it’s important to break down why that actually is. Is it simply about not wanting to commute?

Or might it be the case that for some employees what appeals to them about not commuting is that they get more time with their families or that it was easier to meet other aspects of their life, so it may be the case that the attraction is more about flexible working.

Similarly for some employees working from home may not be that attractive or comfortable so employees may want to make use of hybrid working or co-working spaces nearer their homes.

3 Ethos matters

Corporate values and ethics matter more and more. Many employees now feel it is important for their values to align with the people they work for. In tech this has recently been shown by the significant changes that big-name Silicon Valley firms have had to make when recruiting, they are now struggling to recruit on typical campuses. Similarly, it’s estimated that 54% of employees stayed in jobs longer than in their interest if they felt valued and part of a community.

4 Offer career paths

Employees don’t just want a job but a career; 76% of Gen Z see career advancement, learning and gaining of new skills as key to their employment needs. So offering opportunities for skills development and learning are an important part of the recruitment process.

5 Be competitive with compensation packages

The continuing gap between demand and supply between those qualified for the tech positions that need to be filled means that employers need to be ready to offer competitive salaries. Tech salaries have increased on an average of 1.7% in the last year but in certain areas, they have risen even more. In cyber security, they rose 3.2%, 2.7% in development and 2.6% in data and advanced analytics.