June 10, 2021
Tech Industry Report
The UK is heading towards a digital skills shortage disaster
We’re heading for a digital skills shortage disaster in the UK, according to numerous think tanks, including WorldSkills UK, the Learning & Work Institute, and consulting giant Accenture.
According to a study entitled Unlocking the UK’s potential with digital skills, 80% of leaders in the UK believe that investment in digital skills will be crucial to the country’s post-COVID-19 economic recovery. 78% also hold the conviction that a large pool of digital talent is essential to establishing UK competitiveness on a global stage.
Despite overwhelming consensus on the importance of digital talent to the recovery of our economy, 69% of business leaders in the UK believe that their company is currently experiencing a digital skills gap. 70% expect a digital skills gap to arise in the coming year.
This digital skills gap is particularly prevalent in the following areas: emerging tech (i.e., IoT, automation, and AI), software or application development, cloud infrastructure, digital business transformation, cybersecurity, and data analytics.
As Simon Lambert, Chief Learning Officer for Microsoft, said, “Digital skills are the currency of digital transformation, for individuals, organisations and the UK as a whole, they will play a vital role in unlocking the way forward.”
Given how essential digital skills are to our long and fragile economic recovery from COVID-19, and to each business’ individual success in the coming years, we have compiled this exposé to keep business leaders abreast and provide some insight into the situation they are contending with. To achieve this, we have compiled data from multiple sources, offering a comprehensive view of the tech marketplace.
Who Are We?
Cloud Assembly is a recruitment agency specialising in development, data migration, and cloud platforms. We are based in Oxford (UK), with search offices in Brno (CZ), Atlanta (US), and Pune (IN), affording us a global perspective on the current digital skills gap.
We are tech professionals first, recruiters second, which means we have personal insight into both the employee and employer experience. We know firsthand the state of the talent pool.
In creating this report, we hope to lend our voices to a discussion that leans heavily on two binary perspectives: the employer and the employee. As a tech recruitment agency created by tech professionals, we straddle the divide, offering a more comprehensive, dual perspective.
Will Finding Tech Talent Be Easier Post-COVID?
An understandable question, given that waves of redundancies, spiked unemployment rates and a general recruitment slowdown are headlining across the UK and beyond. For employers across many industries, this translates into an abundance of talent looking for opportunities. In fact, according to the Guardian, “unemployment has hit the highest level for four years”.
You might also be wondering if post-COVID conditions will level the playing field when competing for tech talent, allowing you to offer a lower salary than would have been necessary in the pre-COVID period.
You would be forgiven for thinking this, because according to a survey produced by the Chartered Institute of Personnel and Development (CIPD), almost one-fifth of all UK businesses have requested that staff take a pay cut in order to stave off redundancies.
A further one-third of companies were considering freezing workers’ pay or delaying increases at the very least, while almost one-quarter of businesses were asking employees to work and be paid for fewer hours.
Arguably, it’s an employer’s market, with far more applicants than roles to fill.
But you would be wrong to assume that the tech industry has fallen victim to the same circumstances.
The Tech Industry Post-COVID
In most tech sectors, competition for qualified talent is as fierce as ever, and a post-COVID environment is unlikely to make this any easier on employers. Technology, Regulatory, Compliance, and Fintech are among the sectors that have remained resilient despite the global economic downturn.
In some cases, COVID-19 has actually provided greater opportunities, with many organisations taking steps to improve their cybersecurity on account of the rise in employees working remotely. Companies have largely been keen to hold onto their tech specialists, ensuring that tech talent remains a hot commodity, even in the wake of COVID-19.
As reported by Skillfinder, a survey by CareerBuilder in 2019 found that the job market in the tech sector was candidate-driven, because of low unemployment rates and a continually increasing talent demand. Job-hopping was rising in 2019, with 29% of professionals actively looking for new job opportunities while employed. 51% of survey respondents admitted that they were searching for jobs even when they had a solid offer on the table, while their background checks were being processed.
The pandemic changes all of this, with candidates significantly more likely to hold onto jobs that they believe to be secure. This means that the best candidates for a role are less likely to job-hop.
In other words, despite many markets being overwhelmed with candidates, the tech market is an entirely different story. Studies and surveys appear to conclude unanimously that it is as challenging and competitive as ever to source talented tech candidates—a conclusion that our most recent experiences as tech recruiters support.
Is It Really That Hard To Find Qualified Tech Talent?
The short answer? Yes.
It’s easy to be optimistic when, in most industries, you receive an onslaught of applications for every role you recruit for. Among these applications, the chances of finding the right candidate—someone qualified, experienced, has a good track record, and is willing to accept your salary—are reasonable.
When recruiting for tech positions, particularly specific roles, your chances are significantly reduced.
Here’s why.
The Increase In Remote Working
Across the globe, we have seen a massive increase in remote working.
According to The Remote Work Statistics for 2019 report by FlexJobs, over the five years preceding the survey, the remote workforce had grown by 44% and over the preceding 10 years, by 91%.
This is a trend that the pandemic has escalated further; McKinsey’s forecast for the future of work concluded that we can expect between four and five times more remote work than before the pandemic.
Among tech professionals, this is a welcome future, with preliminary results from the Harvey Nash’s Tech Survey 2021 indicating that 79% of tech professionals want to continue working from home for at least the majority of the work week after the pandemic passes. Moreover, a survey by GrowMotely found that 74% of professionals expect remote work to become standard.
A study by Fuze has also revealed that, in addition to expressing a desire for increased remote working, employees would even be willing to sacrifice a great deal in exchange for greater remote working flexibility. 54% of respondents would be willing to move to another company. 40% would take on greater workload. 31% would pay for their own technology. 24% would relinquish company benefits. And 18% would take a demotion or pay cut.
The increase in remote working, as well as the desire for remote working among employees, introduces a new hurdle for recruiters in the tech space. Not only are they competing with local companies for talent, but global companies that are perhaps better able and willing to offer higher salaries and improved work benefits.
The CEO of Slack, Stewart Butterfield, went so far as to claim that tech companies can’t return employees to the office even if they want to. At a FastCompany Innovation Festival event, Butterfield said, “If we say that everyone must return to the office, or we expect people to, and one of our competitors says you can work remotely, who wouldn’t take the second option there? There’s a market force at play. So I don’t know that individual companies are going to be able to opt-out.”
Whether or not he is correct, Butterfield’s assessment does not bode well for companies that are lagging behind the remote working trend, or are resistant to it.
Put simply, failure to offer flexible working puts recruiters at a severe disadvantage, particularly when competing with global organisations now able to hire from all corners of the world, on account of increased remote working.
The Competition Is Steep
In 2019, there were 23.9 million software engineers in the world. And in the same year, the companies listed in the graph below put out a total of 43,480 job listings for software engineers. To be clear, that figure doesn’t take into account employed software engineers in those companies; only job openings across the 12 month period. As a percentage, job openings for software engineers across just these 10 companies amounted to 0.2% of all software engineers worldwide.
Given that these behemoth organisations are best placed to offer high salaries and benefits, it is safe to say that competition for talent is not only steep, but stacked against the vast majority of recruiters—particularly with these organisations, as well as the most prominent companies in the tech sector (i.e., Facebook and Netflix), hoovering up talent.
To combat this obstacle, recruiters must have an in-depth knowledge of the tech industry and where to source qualified candidates.
The Lack of Qualified Candidates
In a study conducted by CWJobs, it was found that skills shortages and training are the two primary obstacles faced by recruiters attempting to fill tech roles. An incredible 94% of tech employers believe that there is an industry-wide skills shortage.
The annual 2020 Harvey Nash / KPMG CIO Survey identifies a number of tech specialisms as being especially hard to source, including data analytics experts, cloud computing, security, project management, and business analysts. It also identified an overall shortage of professionals who are proficient coders, whether in the development of cloud-computing platforms or back-end mobile applications.
Level of qualification and experience varies enormously between tech professionals, with many developers lacking a formal education. Indeed, studies by Stack Overflow found that at least 60% of developers have learnt their craft without ever having any formal training. The Stack Overflow 2019 developer study revealed that 60.1% of developers claim to have “taken an online course in programming or software development”. 86.8% claimed to have learned a framework, language, or tooling without any formal coursework.
Non-specialist recruiters lack the knowledge necessary to distinguish valid experience and qualifications from non-valid experience and qualifications. Given that an increasing number of developers are self-taught, this makes assessing their ability without specialist experience a notable hurdle for recruiters.
Qualified Developers Are Confident, Even Now
Qualified tech professionals are a hot commodity and they know it. A survey by CodinGame found that when asked how easy they thought it would be to change jobs as a developer in 2021, respondents gave an average answer of 7 out of 10. In 2020, the answer was the same (7 out of 10), proving that developer confidence, unlike most professionals’, has been largely unaffected by COVID-19.
In other words, qualified tech professionals know their worth. They are also acutely aware of the opportunities available to them, locally and abroad. This makes sourcing talent in this particular field more challenging; if you want the best of the best, you’ll have to prove your own worth during the recruitment process.
What does this involve?
Hiring the right talent isn’t just about job benefits. The recruitment process is your opportunity, as an employer, to demonstrate your understanding of the needs and desires of your developers. Developers, like any employee, want to feel that their ambitions are aligned with their employers’, and this will play a key part in determining whether they accept a position or not.
Working with a specialist tech recruitment agency that has a proven understanding of tech professionals can give you an edge in this area, by showing candidates that you recognise their unique value enough to seek specialist support.
This leads us on to the dissonance between HR professionals and developers.
The Dissonance Between HR Professionals & Developers
The graph below shows that there is a fundamental difference between HR professionals’ perception of what matters most to developers, and what actually matters most to developers. In the graph, the yellow bars represent how HR professionals perceive the level of priority of each benefit to developers. The black bars represent how developers actually prioritise each benefit.
For example, HR professionals perceive ‘flexible working hours/good work-life balance’ as being significantly less important to developers than they are. They also perceive ‘technical challenges/interesting problems’ to solve as being significantly more important to developers than they are.
For recruiters, these fundamental misunderstandings pose a real challenge; to stand a chance of competing with competing recruiters, employers must at the very least understand the objectives and priorities of candidates.
In our experience, this dissonance speaks to a more pervasive problem, in which a recruiter’s lack of experience of knowledge of the tech sector obscures their view of what a qualified candidate looks like—particularly given how many developers are self-taught, as we explored earlier in the report.
Summary
In conclusion, there are a number of factors at play that continue to make sourcing qualified tech talent challenging:
- The increase in remote working
- The competition is steep
- The lack of qualified candidates
- Qualified developers are confident, even now
- The dissonance between HR professionals and developers
Key Takeaways For Tech Recruiters & Employers
Having assessed the obstacles faced by tech recruiters, we will now outline viable solutions grounded in our experience of this particular sector.
1. Embrace remote working flexibility as much as is practical
As this report has revealed, there is not only an appetite for remote working flexibility among tech professionals, but an expectation of it. Given how in-demand qualified tech professionals are, and the extent of the competition for acquiring talent, recruiters cannot afford to lag behind the trend for increased remote working.
Offering moderate flexibility (2-3 remote working days per week, for example) will go a long way towards levelling the playing field between your company and competing recruiters. Acknowledging that remote working flexibility is a priority for tech professionals, and taking steps to make it a reality for them, demonstrates investment and consideration for your staff that will make you a far more attractive employer.
2. Expand your search to include global candidates
The digital skills gap is especially prevalent in certain locations, like the United Kingdom. Expanding your search to include global candidates gives you access to an enormous talent pool, improving your chances of acquiring qualified talent from locations less impacted by a skills gap.
If you have embraced full remote working for your employees, the obstacles to hiring global talent are significantly reduced; even small organisations can now benefit from the opportunity of acquiring global talent.
3. Identify candidates with natural aptitude and provide formal training
As mentioned earlier in this report, a significant proportion of tech professionals are self-taught or lack formal training. This does not necessarily mean that they lack talent, but distinguishing those with potential from those without becomes significantly more challenging for recruiters without the presence of formal qualifications to rely on as a trustworthy indicator of proficiency.
Specialist recruiters like CloudAssembly are adept at identifying individuals who, though uncertified, show aptitude for even the most demanding tech roles. These individuals can be trained quickly, efficiently and at minimal cost.
By targeting these uncertified individuals, recruiters are better able to compete with talent hoover organisations like FAANG. These are the diamonds in the rough often overlooked by large organisations, but who often show an equal amount of aptitude and skill as more conventionally qualified candidates. However, separating these individuals from the rest requires a specialist, trained eye.
4. Do not underestimate the value of qualified candidates and acknowledge that acquiring talent is a competitive process
It is all too easy as an employer to lean into the misconception that, primarily, talent competes for positions. In the tech sector, though of course talent must compete, recruiters should not underestimate how competitive they too must be in order to secure qualified candidates.
As we have addressed, tech professionals are a hot commodity, and they know it. They know the extent of opportunities available to them if they are sufficiently qualified. To secure qualified candidates under these conditions, recruiters must demonstrate an understanding of the value of qualified candidates. They know their worth; so, to compete, you will have to offer a work package that proves that you know it too.
5. Lean on specialist recruiters with an understanding of developer priorities
There is a clear dissonance between what recruiters think tech professionals prioritise, and what they actually prioritise. If you hope to acquire the best talent in this highly competitive area of recruitment, you must be armed with an understanding of what candidates are actually looking for.
Tech professionals’ desire for flexible working, for example, supersedes the importance of salary, a fact that studies show HR professionals failed to identify. And yet, taking action to reflect the prioritisation of flexible working could attract better qualified candidates, while also allowing your company to save costs on office space and possibly even salary—all while ensuring a happy workforce.
Industry-specific insights of this nature make an invaluable contribution to attracting and retaining talent.
Start Sourcing Talent
The tech industry presents a set of unique and extremely challenging conditions for recruiters. And to overcome them, recruiters must be equipped not only with first-hand experience of working on the inside of the tech industry, but also a specialist set of skills that enables them to source talent via less conventional means.
Our experience in this arena, as both recruiters and tech professionals ourselves, empowers us with a unique and invaluable perspective.
At CloudAssembly, we help companies not only compete in the tech recruitment space, but thrive in it.
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