The availability of tech talent was repeatedly raised as a major constraint of growth at our virtual roundtables on post-Covid-19 economic recovery with the DEC (Digital Economy Council).
In the West Midlands, the CEO of a coding bootcamp summarised why the sector has an insatiable appetite for skills. “Tech used to be about setting up a website, getting 1,000 users and going from there,” they began, “today, you need teams of engineers constantly delivering products and features.”
In spite of a turbulent year for jobseekers and employers, tech hiring bounced back by the end of 2020 with over 85,000 jobs being advertised. As Andrew Hunter, cofounder at job advertisements search engine Adzuna notes in Tech Nation Report 2021, this number was just a fraction shy of pre-pandemic levels.
Currently the demand for tech roles and digital skills outweighs supply in the UK, with employers – from high-growth scaleup firms approaching an IPO to SMEs digitising their operations – competing for tech talent.
So, we asked the tech leaders and stakeholders who attended our roundtables how the sector can overcome the challenges posed by the pandemic and meet the growing need for tech jobs and skills.
Finding digital skills
Delegates commonly said that they had experienced difficulty in hiring software developers. This comes as little surprise: data from job advertisement search engine Adzuna, referenced in Tech Nation Report 2021, shows that the top sought after candidate from UK employers in 2019 was software developer, with demand outweighing supply by 10 times.
Strategies to attract skilled workers vary depending on a company’s size and the level of competition in its region. Corporates have the most financial muscle needed to compete, but their ability to attract talent to cities could be seen as a double-edged sword.
A gaming corporation in Yorkshire said it had sought to increase its visibility to local developers by directly engaging the local entrepreneur community, hosting meetups and exhibiting at recruitment fairs. While its CEO conceded that this was on the one hand a “selfish” pursuit, they said that the company had grown the city’s talent pool and led to the spinout of a digital transformation firm that was recently acquired by a multinational consultancy.
Smaller companies with comparatively modest resources are less able to compete and more likely to rely on third parties to source skills. A healthtech scaleup based in Northern Ireland said it has found it increasingly challenging to compete for talent against large tech companies that can offer higher salaries to graduate software developers.
Software programmers are in short supply in the UK
It is not just technical roles that are in short supply; many roundtable attendees spoke of a need for candidates with so-called ‘soft’ or creative and communication skills, including digital marketing, sales; customer experience and operations.
“People don’t see tech as a creative vocation, but it is,” commented a founder based in the North West.
One insurtech startup in Northern Ireland said that finding local sales talent had proved particularly tricky. We heard similar concerns in Scotland from a founder who said that sales is “an important discipline that’s sometimes thought of as a dirty word and not given the credit that it’s due”. A range of talents is required to grow a successful company and sales should be developed like any other, they added.
To widen their net of potential candidates, some business leaders run assessments and test for aptitude in addition to looking at what’s listed on CVs. “What’s on your CV can be very limited if you are a new graduate,” said the CEO of a talent assessment platform provider in the South East. “Employers want to see what other skills and traits people have, not just what they have done.”
Putting this approach into practice, one startup based in Northern Ireland’s North West said that it prioritises candidates’ “skillsets, aptitude, passion and the ability to work at a fast pace”. The company has grown its team to 30 people and said that it has seen positive retention rates since adopting this strategy.
Upskilling the workforce
As noted in the latest Tech Nation report, reskilling and upskilling the workforce will be necessary to plug the digital skills gap and grow the UK economy. Companies can choose to upskill their internal workforce or outsource the work to external training providers such as coding bootcamps.
One investor in the North West argued that companies should source training for their existing hires to upskill local talent pools more generally, which benefits the local tech community as a whole, rather than “poaching” staff from other firms. They praised cloud computing providers in the North West that enroll college students into apprenticeships after hiring them. Demand for cloud-based computing roles has been rising in recent years, with demand growing 22% from 2018 to 2019 according to Tech Nation’s latest Jobs and Skills report.
Delegates generally agreed that businesses need to get better at supporting their workers through apprenticeships. One said that enrolling students onto apprenticeships with full salaries at the start of their career could help graduate retention rates. Another praised apprenticeships as examples of social mobility that can help adults from disadvantaged backgrounds and parents who cannot afford to send their children to university.
Delegates said that skills providers’ offerings are “overcomplicated”
Some roundtable attendees were not convinced that apprenticeships can be taught effectively, particularly in a remote environment. “Trying to teach intermediate skills at pace to novices is very hard,” said a director of an associate tech body in the North West. “There needs to be more thought put into the reality of teaching adults and the pace of learning that is most effective.”
Smaller companies can be smart when it comes to upskilling their own workforce, said the founder of an AI-powered SaaS platform based in the North East. The company has implemented a training and onboarding programme detailing what work and skills are necessary to progress internally. It has templated the process so that it can be applied to both technical roles (for example, data science) and supporting ones (such as sales and customer success).
Stakeholders in multiple regions commented that upskilling programmes across the UK are poorly promoted. One tech community leader in the West Midlands said that more companies would consider external training for their hires if providers were more visible.
Another criticised the “extremely complicated” nature of their region’s skills support offerings. “There are government initiatives, Kickstarter schemes and apprenticeships – but how does it all fit together?” they asked, adding, “it’s hard for individuals to know what their best route into tech is, and providers need to set out the best way that people can join their programmes.”
In the South West, one delegate said that the absence of a clear skills support offering for the region was holding tech startups back from maturing into established scaleups. “We’re seeing organisations cry out for skills,” they said. “I think we need to spend more time focusing on organisations with growth potential and making them aware of what the skills-related opportunities are.”
Role of education
While there is no silver bullet to plugging the skills gap, delegates agreed that teaching and championing technology to children at a young age could encourage them to consider tech roles in the future.
“We need to get primary school students to understand innovation and technology while making it exciting to them,” one said. Another raised concerns about the “low percentage” of schoolchildren in Wales taking ICT compared to Europe. “Skills such as big data, AI and machine learning are relevant for all organisations,” they commented, “but it’s difficult to teach because there aren’t enough skilled teachers in these areas.”
It was recognised that universities play a crucial role in supplying a pipeline of skilled graduates now and in the future. Business leaders agreed that there is a need to help graduates get into tech and increase the visibility and awareness of the wide range of roles available in the tech sector.
It was also deemed important to help the wide spectrum of young people from non-technical backgrounds enter the sector. One Yorkshire-based organisation that helps women land digital roles has been working to increase visibility of this by showcasing how people early on in their careers transitioned from non-technical backgrounds (for example, an art degree) to digital and tech roles.
University representatives showed an appetite to engage with hiring companies. An innovation hub located in a university in Yorkshire said that it has seen local startups and SMEs gain “tremendously” by being matched with PhD students with relevant skills and experience. Companies can circumvent recruiters (or head-hunters) by sharing their cultural fit and needs with the university, they added, which can then facilitate direct recruitment of graduates who gain vital commercial experience and exposure in return.
It was agreed that there needs to be a closer link between industry and education, but it was less clear where responsibility for that lies. The Welsh Government was praised for funding initiatives specifically tasked with improving communication between the two sides.
A university in South Wales encouraged companies to “engage with and mould” its postgraduate students, of which it attracted “record numbers” during the pandemic with many studying data science, analytics, cybersecurity, and AI. Another in the North East said that it had introduced sector-specific courses to reflect interest in areas with longevity in the market – such as fintech and data science.
In Yorkshire, a coworking space described how it had partnered with a local college to ensure that local students, who will work alongside entrepreneurs building businesses, develop digital skills throughout their educational journey. The intention is to attract businesses to the local area while developing their potential future employees.
Work experience programmes and internships were highlighted as benefits (rather than costs) to companies. However, it was agreed that schemes must meet regulations around minimum pay. Companies were encouraged to take advantage of the Apprenticeship Levy when looking to open up opportunities to those unable to fund their own work experience.
Some universities in the UK have the capability to help students ‘spin out’ their ideas into business opportunities with commercial backing. It was suggested that encouraging more students with academic potential to take this route could hasten the economic recovery.
Impact of Covid-19
The pandemic has caused tech companies to rethink their strategies around talent and skills, and the work environment. Most delegates said that their business would switch to a hybrid office/remote model and keep at least one office open. Many are now accustomed to running and attending virtual events and some are using digital platforms to help their employees pick up new skills remotely through virtual learning environments.
The ability to hire remotely has been transformative for businesses including one startup in the North East that said it hired 40 people during lockdown. The company had previously recruited one person (in Edinburgh) before the pandemic hit.
We also heard that HR departments across the regions are encouraged to see a flow of talent outside of the main hubs in the South East. One talent manager from a small town in the North West described how they had seen a surge of people returning to the region from London when the pandemic hit.
Cautious delegates saw the opportunity to hire remote talent as a double-edged sword due to concerns around staff retention. Some companies have invested in employee benefit platforms to help maintain the wellbeing of their workers. Sharing anecdotal experience, the founder of an education software startup in the North West warned that investors are “not always happy” with venture capital being allocated to developing talent or encouraging training and development.
Concerns also remain around how flexible working models may affect company culture. In Wales, a startup CEO said that they had struggled with “hiring people by webcam” and decried the potential loss of “traditional office culture”. They weren’t entirely pessimistic, however, explaining that the company had experimented in offshoring talent to accelerate development of its products during lockdown.
Delegates at every roundtable spoke enthusiastically about the potential for positive impact on diversity in the sector after the pandemic. One organisation founder in Scotland said that the country is doing a “real push” on neurodiversity, with stakeholders collaborating on mentoring schemes and cybersecurity courses for neurodiverse workers.
Delegates were united in their aim to increase the number of women working in UK tech, which currently stands at 17%. The head of an all-girls’ school in the South East said that their school was unable to run an A-Level Computing course because fewer than four students express an interest in taking it each year.
“Our students don’t realise they have basic skills that could be transferred into tech,” they said. “Many of them don’t choose tech-related work experience, and a more effective approach may be to get academics, founders and employers to come into schools and talk so they get a better understanding of the opportunities and roles available.”
Offering a brighter outlook, one delegate reminded people that the number of female students studying computer science at A-Level had increased by 300% in five years (as of 2020), and is up 23% on 2019 according to BCS, The Chartered Institute for IT.
It was suggested by a head of department at a university in the South East that the sector should launch tech programmes for girls in secondary and higher education, to encourage them into business and STEM subjects before they decide on their career choices.
One university professor called for more female leaders to be included on company boards. “The limited candidates we do have are often stretched and overworked as everybody wants them on their boards,” they said.
The cofounder of an organisation that represents black people in the UK’s tech sector said that diversity is “the only way” to make the UK the most successful and innovative tech centre in the world. By adopting a diverse mindset, companies can best position themselves to create the most innovative products and services, they added.
Another delegate spoke of a need to redress the balance when it comes to the allocation of tech investment, with just 3% of VC funding going to all-female-founded companies in the UK in 2019 according to Tech Nation Report 2021. They recalled a conversation with a young black woman in tech who had enrolled herself on a body language course to increase her confidence before pitching for investment in what is a predominantly white and male-dominated sector.
By the end of the roundtable series, there was no shortage of ideas on how to grow the digital tech sector and drive economic recovery in the wake of the pandemic. It became evident that this will not be possible without collaboration. A call was made for everyone from company founders and their digital tech workers, to support organisations and government, to work together in addressing new and existing skills-related challenges that the sector faces in 2021 and beyond.
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