A war for talent: how can the UK tech sector respond?

The world of work has undergone significant change in recent years, accelerated by the pandemic. As business models, structures and priorities adapt, how can organisations – and specifically tech companies – attract and retain the best talent and futureproof themselves in this evolving environment?

With the advent of the Fourth Industrial Revolution – a fundamental societal shift driven by extraordinary advances in tech – the need to be innovative and agile has become a cornerstone of business strategy. Leaders in every industry recognise that investment in their teams will be crucial to unlocking the myriad opportunities created by digital disruption. However, with an empowered and flexible workforce and demand outstripping supply, the war for talent is fiercer than ever.

As part of our “Future of the UK tech sector” series of articles, we talk to two leaders, Aaron Harris, Global Chief Technology Officer at Sage, and Graeme Watt, Chief Executive Officer at Softcat, who share their experiences and perspectives on this topic.

Jump ahead to the company spotlights of Sage and Softcat

Read the company spotlights

A hyper-competitive marketplace

Businesses that hire well are more likely to compete. But it is becoming a more complex challenge; recruitment expert Reed’s 2022 salary guide revealed that 72% of tech companies surveyed found it harder to hire in the past 12 months. Ultimately, candidates with sought-after skills now have more choice, and more power.

The guide reports that demand for technical roles including data scientists has rocketed as, increasingly, business leaders turn to data-led strategies to shape their decision-making. The rising popularity of cloud-based processes and storage has benefited developers and analysts, and recruiters are pulling out the stops to land individuals with .Net, Java and Javascript expertise. There are also a growing number of roles in artificial intelligence (AI) and machine learning.

Sage and Softcat can count themselves among those firms that are thriving, with both adding to their numbers during the pandemic. “We have doubled the team,” says Harris. “We always have overly ambitious targets for headcount, but the pace of hiring has remained consistent for us. Frankly, I’ve been pleased by how well we have been able to recruit given that data scientists and AI engineers are in high demand.”

“Everything we do is an evolution; there is no revolution,” Watt adds. “We kept our heads down throughout the pandemic and continued recruiting – we hired 300 heads over the two years.”

Reed also points to increased salaries for in-demand tech experts, but finding the right fit is not always about money. What else is contributing to organisations like Sage and Softcat being able to attract the best people?

Attracting talent

Flexibility is hugely important to today’s candidates. COVID accelerated the transition to remote/hybrid working for many industries, but it had already been embraced by the tech sector, with many teams globally distributed.

Harris says, “We have a hybrid working policy. On my team, the mandate is simple – it is up to each team lead to create a ‘team agreement’. If we are kicking off a new project that requires collaboration on design, for example, that works better in person. Innovation takes trust, but it can be harder to build that remotely.”

This also means that businesses are not limited by geographical location – another attractive proposition for new talent. While the capital is ever popular, 40% of Deloitte’s Fast 50 - the UK’s tech companies recording the most rapid growth companies - are based outside London, with Manchester and Birmingham emerging as regional hotspots. Thirty-eight% also have sites in the US, and 5% have international offices.

Harris explains that Sage takes a global approach to talent spotting. “We hire where we can find talent, and we have done acquisitions to boost the team,” he comments. “We acquired Task Sheriff in Tel Aviv. That got us a foothold on the talent market there.”

And it is up to leaders to explore different routes to shore up their talent pool. “We are planning on ramping up our pipeline of graduates; we have programmes across many universities,” Harris continues. “In the future, I hope to have three or four unis that we have a much closer relationship with and where we go beyond recruiting programmes and undertake joint research. That is working really well with Newcastle University and we are looking at US universities now, too.”

“We are planning on ramping up our pipeline of graduates and have programmes across many universities.”

However, it is not just about rushing to recruit as much tech talent as possible. Sage has taken an organic approach to hiring. “It is more realistic to hire slowly,” Harris says. “When I started to lead the AI and data science teams, I didn’t understand how difficult it was to build AI-powered capabilities compared to traditional capabilities. You cannot develop without customer relationships, for example. If I hired 1,000 data scientists, they would do nothing for a year – you need to develop the tooling, processes and programmes for working with customers first.”

But, of course, recruitment is not the only way to build for the future, especially in today’s tough environment.

Empowering and retaining your people

Retention and reskilling are imperative for an organisation’s survival, and even more so in a sector where talent is scarce. In Deloitte’s 2021 Human Capital Trends: European Special Report, European executives identified “the ability of their people to adapt, reskill and assume new roles” as the most important factor in navigating future disruptions. Furthermore, when asked about the most important actions they are taking to transform work, “building an organisational culture that celebrates growth, adaptability and resilience,” and “building workforce capability through upskilling, reskilling, and mobility,” came out on top.

But the report highlighted a gap in organisations’ understanding of their workforce – not just their skills and capabilities, but their interests and capacity for continuous reinvention. It suggests the most effective way to unleash people’s potential is by giving them agency and choice about the work they do, and the freedom to explore areas they are passionate about.

Watt explains that empowerment is a vital component of an attractive workplace. “If people have an idea they think would be good – a great commercial offering, for example – we will invite them to a leadership meeting to tell us about it. Innovation comes from the empowerment we give our people.”

“Innovation comes from the empowerment we give our people.”

Harris adds that Sage’s tech employees know that their work can have a real impact, so are enthused by what they are doing. Giving them that kind of experience and exposure is another way to compete with the big hitters. “They know that when they come to work here, the stuff they work on will make it to customers,” he explains. “It is very important to these individuals that their work makes it out into the real world.”

“There are lots of interesting applications for data science. We have a clear vision for AI and when we interview, we take candidates through the areas of investment and types of projects that get them excited. It takes a lot of education to become a data scientist, so these people are intellectually curious. That is what draws them here and helps us retain them; we can feed their intellectual curiosity.”

It is clear that recruiting and retaining the right people is a multi-faceted challenge, and that company culture – what it feels like to work for a firm – has an important role to play.

Building the right culture

The importance of creating a culture with purpose at its core, where diversity is embraced and employees are nurtured and valued, cannot be underestimated. This is echoed in Deloitte’s 2021 Human Capital Trends: European Special Report, which states that key to unleashing workforce potential is fostering an organisational culture where mobility and personal growth are encouraged and expected.

“People are interested in joining a company that rewards and recognises achievements, says Watt. “A company that always tries to say yes to the customer, cares for one another, has fun and does a lot around inclusion, diversity, charitable work and sustainability. Cultural fit is essential.”

And it isn’t always about the big things. To create a workplace that is attractive to new talent, you need to have the right foundations in place. “We send birthday and anniversary emails,” he adds. “I sit with the team on the main floor, not in a corner office. It is about being accessible – I learn from being out there and seeing and hearing things.”

“There’s also something about the energy and intimacy that comes from smaller teams. We work hard to keep that culture alive. People ask me for help when they need it.” And Harris concurs. “We have a great, supportive culture. These things are very important.”

"There’s also something about the energy and intimacy that comes from smaller teams. We work hard to keep that culture alive."

Significant differences between the US and the UK

The future of tech is exciting and while there are obstacles to overcome, as in any sector, there are huge opportunities to explore. People must be at the heart of that. Good, highly skilled, empowered people.

Forward-thinking companies that understand what matters to today’s new hires – purpose, opportunity and investment in their development, alongside recognition and reward – will find it easier to navigate the minefield created by this war for talent.

Company spotlights

Key Contact

Milan Sallaba

Technology Sector Leader for the UK

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Future of the Tech Sector in the UK