The exponential growth of the UK’s tech sector points towards a positive outlook for 2022 and beyond, with unprecedented levels of unplanned spend on digital, increasing to the highest levels in a decade.
However, with this has come several setbacks – remote working, whilst improving productivity and accessibility, has also left employees re-evaluating their priorities (as seen with those who are part of the Great Resignation) when only one in three organisations have updated their employee offer.
For employers, there is also the skills shortages to contend with.
Shortages are the highest on record, particularly in areas such as cybersecurity, big data and architecture.
What is the outlook for the tech sector in the UK, and what can be done about the skills crisis?
The number of digital leaders in the UK planning to boost their investment in technology and headcount rose by over a third since 2020.
Record levels of investment has led to many in the sector expecting a ‘second renaissance’ for technology.
The ripples of the pandemic continue with the new ways of working, requiring organisations to not only invest more in technology to adapt, but also to re-imagine the way in which they operate as a business.
Half of organisations surveyed by the Harvey Nash Group have major plans for transformation in the next two to three years, which correlates with the increase in investment in technology and the demand for developers.
In the UK, developers are third in roles with the biggest skills shortage, behind HGV drivers and nurses.
Shortages are also significant around cybersecurity, big data and architecture, leading many organisations to consider cross-training staff where possible.
Though generally skills shortages have been present in tech roles, the shortages used to be more prominent in niche or emerging technologies – now, it’s seemingly across the board.
Cybersecurity is a significant area of concern due to a recent DCMS report, in which it was found that the cybersecurity recruitment pool in the UK has a shortfall of 10,000 people a year.
As a result of the shortages, two thirds of digital leaders in the UK are now unable to keep up with change because of their immediate need for talent.
Alongside the plan to cross-train people from other areas of their organisation, many are planning to increase the number of apprenticeships offered.
Over 52% of digital leaders in the UK said that they would be offering more apprenticeships over the year ahead.
Though remote working has been somewhat of a double-edged blade for the tech sector, hybrid working offers the opportunity to widen the talent pool to fill skills gaps, with half of digital leaders in the UK widening their geographical net when recruiting.
Primarily, organisations need to tackle three areas:
- A lack of supply of skilled talent
- Adapting employee propositions for hybrid working
- Evolving needs (as technology rapidly develops)
Four in ten tech executives say they can’t retain key talent as long as they would like due to employees being offered higher salaries elsewhere – the post-pandemic shift of priorities is not only causing challenges to recruitment, but also retention.
This makes employee benefits a key area for employers to tackle to contend with heightened competitiveness for tech skills across sectors.
Competition is now also on a global scale due to remote working opportunities, and hybrid working has also cast the net slightly further for UK-based roles.
What is your organisation offering that attracts candidates with highly coveted skills?
Whilst most organisations may jump to salary as the only solution, the answer can be found in the shift of work/life balance priorities due to the pandemic.
Flexible working, hybrid working, and growth opportunities are all benefits that tech candidates and employees value.
(You can read more about the benefits that tech candidates value most in our blog post here.)
The new ways of working and the priorities that have shifted as a result are going nowhere.
It is now down to organisations to redesign their employee offering to promote the positives and begin filling the gaps in the most important areas.
This offers organisations the opportunity to focus on diversity – an area that the sector is still lagging in – to make it a priority for the shifting recruitment processes.
Additionally, sustainability is also set to play a larger role in the tech sector in 2022 when the uncertainty of shortages slows down.
Only 22% of tech leaders are actively reducing tech CO2 emissions, when the tech sector contributes more towards CO2 emissions than the travel sector (5.9%).
Sustainability, like diversity, is another area in which the sector is lagging behind, even though it is high on the agenda for many of the candidates that the sector is aiming to recruit.
As more organisations begin to adjust their offering for employees, it will often come down to company culture and values above traditional monetary incentives, given the level of competitiveness.
This makes sustainability and diversity efforts even more integral to the direction that the sector will take.
Though organisations are adapting to skills shortages through cross-training and increasing apprenticeships, there is still recruitment and retention to contend with in the long-term.
Adjusting employee offering is absolutely vital for organisations during such a critical recovery period as hybrid and remote working increases the level of competitiveness for already in-demand skills/roles.
The tech sector has the opportunity to re-evaluate their current processes to adapt to the changing demands of the workforce to bridge the skills gap – whether through benefits such as flexible working or working on culture and values through diversity and sustainability initiatives – so that the sector can continue to thrive.
As long as the sector continues to evolve and innovate, it will continue to move in an upward trajectory as more businesses than ever rely on digital transformation.
If you’d like to discuss your recruitment needs and how you can widen your software development talent pool in this market, get in touch and find out how we can help.