Since the start of the pandemic, the technology talent market has been volatile and difficult to predict. In 2020 we saw job cuts, furlough, and global uncertainty. In 2021 we saw the Great Resignation and the beginnings of a talent scarcity in almost every tech skill set. In 2022 the shortage of talent reached a 16 years high. But now, a UK recession has become more than a possibility and hiring has begun to ebb. What does this mean for technology employers? Will an economic slowdown finally end the race for top tech talent?
Slow down or speed up in an economic slowdown?
2022 saw talent shortages in the UK labour market reach a 16 years high, with 78% of employers reporting difficulty in hiring the workers they need. Labour problems were even worse in IT and Tech, where an acute shortage of data engineers, architects, analysts, cloud engineers, and database administrators saw many employers frantically increasing compensation packages to outbid competitors in a sprint to hire or retain the best tech talent.
However, as the year now draws to a close, hiring demand is beginning to cool, with the fourth quarter net employment outlook falling by 8 percentage points from the previous three months period. With an economic slowdown looming, what will technology employers do? Will they end the years-long competition for best tech talent by taking their foot off the gas, or will they see recession as an opportunity to capitalise?
Jogging along, but still business as usual.
A recent survey conducted by global consulting firm Everest, asked technology organisations for their current position on hiring tech talent. 16% said they have already frozen their hiring. 56% said they were continuing to hire but were just reducing their demand, while 15% stated they were planning to use market conditions as an opportunity to get ahead. It’s a mixed picture, but it is hardly a signal of retrenchment. Instead, the responses indicate a majority willingness to hire, but at more of a jog than a race.
So where does this leave those organisations who still intend to grow their workforce? There has been no transformation in the number of candidates to choose from, and it still takes time for workers to gain the experience and skills employers need. Even if the demand for ever-higher compensation eases, tech companies will still face the same old problem – too few candidates available on the open market.
Fortunately, there’s an answer to this dilemma:
Build, don’t buy the talent you need.
When a client asks Manpower to deliver niche technology skills, we use our ‘4Bs’ methodology of Build, Buy, Borrow, Bridge, to reset expectations. Not all skills can be bought from the market. Building talent via training and academies must be considered, as roles in cyber, blockchain, AI, and machine learning remain in high demand. In times of low labour supply, L&D investments must play a part in overall talent attraction and retention strategies. Growing talent, where it can be nurtured to suit a particular work environment, is a powerful alternative to the continual rounds of search and disappointment that a ‘buy only’ approach may bring.
Give talent the opportunity to thrive.
If building their talent pool is the choice of employers, they must also make sure they keep that talent when it reaches productive maturity. The Talent Everywhere Agenda, where employers offer fully-remote working to expand technology talent pools, is a strategy many technology employers are taking to achieve this goal. According to recent Innovantage data, 43% of all jobs advertised in the UK list ‘working from home’ in the role description. However, some employers remain sceptical that WFH will deliver the results they want and are actively encouraging their workforce to return to the office, at least for a few days a week. This seems at odds with the need to give talent the space they need to thrive if you wish to retain them, and this thought is reflected in our recent MEOS report, where we reveal that some employees are refusing to return to the office at all.
Employers must recognise that hybrid working is here to stay, but it needs to be re-designed to achieve a well-planned, well organised, attractive, and collaborative experience to keep both employers and current workers happy and engaged. However, if there is a recession, will employers who were previously nervous about enforcing hybrid working now take more risks with future talent attraction strategies?
Culture, purpose and trust are the new hiring currency.
Manpower’s recent ‘What workers want’ report revealed that 3 in 4 workers want to feel motivated and passionate about their work, and 7 in 10 believe the work they do is important and want their contributions to be recognised by management. Culture, purpose, and trust will call for an EVP that brings empathetic and authentic leadership. Without investment and continual evolution in company culture and work methodology, technology companies will struggle to execute their hiring strategy and they will most likely lose their most valuable talent to those competitors that make the change.
Boost your employer brand to make your business attractive to employees.
Making your business attractive to employees is no longer a case of installing a ping pong table and offering free avocado sandwiches. Boosting your employer brand and putting culture front and centre is now essential in the struggle to hire and retain top tech talent. How do you do this? Listen to your people. Learn what they need to thrive. Make it known that you are taking positive steps to give them what they need and get leaders talking about your culture. If you can become a role model for workplace positivity, you will become a magnet for best talent. Lastly, be willing to change your messaging. Hiring the best talent in 2022 is not a case of one size fits all. No two workers are the same. Adjust your communications to address feedback. Your culture and the messages you wrap around it must be flexible enough to resonate with everyone.
The race for top talent is far from over. Learn more about the current hiring market and how to hire the best tech talent you need. Download the full Manpower Employment Outlook Survey Q4 2022 now.
Links and sources:
MEOS Q4 2022: https://www.manpower.co.uk/article/b_meos-q422/