Attracting and retaining tech talent has emerged as a major challenge for new and existing TMT businesses says NorthEdge Capital TMT investment manager George Potts.
In a recent poll from Deloitte, 62 per cent of UK business executives said they felt their tech talent pool did not have the capability they needed to deliver their digital strategy. This is also the case on a regional level.
In a survey of major North West tech companies conducted by NorthEdge, 86 per cent of participating businesses – whose turnover ranged from £2 million to over £100 million – stated it was a significant challenge to recruit technology talent.
“There are a number of factors that have given rise to this, not least of which that competition for talent is simply much fiercer than in previous years,” said Potts.
Research from techUK estimates there are a total of 600,000 tech vacancies in the UK, which is predicted to rise to one million by 2020, while hard to fill positions are costing the UK economy around £63 billion per year in lost potential GDP.
“Tech has become integral to the future of every sector, whether that be travel, finance, or manufacturing, and the need for software and engineering talent has grown rapidly as a result,” continued Potts.
“Beyond the need to attract tech talent is the interrelated challenge of retaining skilled workers. The cost of churn is high, both financially and via the unseen impact on the operations of a business, whilst the retention of satisfied, effective, and diverse tech teams enables business continuity, growth and innovation.”
NorthEdge’s interactive survey, for example, highlighted that only 15 per cent of participating businesses had a formal career progression structure in place.
This lack of clear vision as to where employees want their careers to go, and the strategies to enable that, is one key insight established with the participants.
In response, NorthEdge has created a best practice pack of recruitment and retention advice for the benefit of TMT companies it engages with.
“The pack, which advises business owners on techniques to attract and retain the best tech talent, has already made positive differences to a range of businesses,” said Potts.
The role of universities is also key when it comes to preparing and sourcing the next generation of tech talent, says Potts.
“As we look forward on the transformative role that technology will continue to play in the industry and our day-to-day lives, the right advice and support in sourcing and retaining talent looks likely to become an increasingly pertinent source of competitive advantage,” he concluded.