Observations by Sue Ormerod, Regional Director at Nigel Wright Group, on skills shortages creating recruitment challenges in technology roles and how employers need to maximise their likelihood of finding and attracting great candidates.
Each year for as long as I can remember we’ve surveyed our clients and candidates to gain further insights into salaries and benefits being provided by employers.
Having worked in technology recruitment for over 27 years, I can honestly say this year has been the most unusual and volatile year for technology salaries that I have ever seen. This isn’t unique to technology, but it feels like technology has been at the centre of a lot of controversy. When we launched our survey this time last year, we had no idea how quickly the findings would change.
To understand the context of the volitivity in the current market, lockdown happened after periods of the highest employment and the lowest attrition in tech teams and the market was highly driven by candidates with rare skill sets. Salary levels were stable and when people moved from one company to another, they received a pay increase of circa 5% - 10%. Benefits were a hot topic and flexible working was being discussed as a nice-to-have. Average tenure was circa 5 years in a role. During 2019 and 2020, discussions centred on driving efficiency, lean working and trainee roles controlled by headcount restrictions.
Technical teams were about to be highly tested by lockdown and the needs of their companies and customers. One quarter of technology employees had no pay increase in the previous pay review and only 37% of them had less than 2% increase.
By the end of 2021, we saw the highest employment figures and highest job vacancies but with the lowest application rate that we, and our clients, had ever experienced. Typical salary increases are 18% - 20% and some companies paying hefty retention bonuses or pay increases to keep people who have tried to leave. We also can’t ignore that in some companies, working from home continually over the last 18 months, has weakened the bond between team members. Perhaps making it an easier decision for some people to switch companies, especially if an increase in salary of £20,000 p.a. is offered.
While it is understandable that technology companies now have a higher workload and have therefore added to their teams, non-technology companies have also been going through a digital transformation and need people with technology skills to enable them to do this well. The competition for developers has never been as fierce and is being seen with other technical specialists too. The last 2 years has taken an unexpected toll on our technology professionals where expectations on consistent and sustained performance have been at the highest levels.
Our clients can’t see this changing anytime soon. It will slow down but is likely to persist as demand for technical products and services remain high as the uncertainly in the economy continues. The skills gap isn’t going to be solved overnight as the supply of new and available talent is not readily available.
The pain is being felt in the mid salary band and our clients want people who’ll come in and be productive quickly. They want their new hires to start with minimal support or training and have ambitions to grow. For vacancies where a client needs 18 months’ to 2 years’ experience, the need to deliver now against a background where companies furloughed less experienced tech people, has played a part in limiting this pool of talent considerably. Given that many companies went into lockdown with a lean team, they are coming through the pandemic wanting additional heads in their tech teams – further exacerbating the gap in supply and demand for candidates.
While this sustained pressure for our clients is likely to slow down, we are in a perfect storm of high recruitment levels and few suitable candidates. Speaking to our clients, the demand for technical products is going to continue but the pipeline of new and available talent is slim. Sadly, this situation it is unlikely to change in the short term.
Driven by rapid need for digital adoption and transformation, currently the key roles for business analysts, enterprise and solution architects, security specialists and developers are all in high demand. However, we are seeing an increasing demand for data analysts and data scientists where experienced candidates, who want to move roles, are in very short supply.
Recently, the press has reported that remote working is draining talent from the North into companies based in the South. This is certainly not a myth. We hear evidence each day that experienced staff are being targeted and tempted by higher salaries and WFH packages. Increasingly we see candidates moving roles with no face-to-face interviews and simply switching a laptop and tech to join a new company without leaving their home.
Reflecting on the market at the end of 2020, we saw 28% of companies in the North of England experiencing skills shortages, 38% of companies planning to add extra heads than they did in 2019 and 53% of companies thought they’d struggle to recruit. I’m sad to say that these percentages seem extraordinarily low compared to what our consultants at Nigel Wright Group are seeing now. Anecdotally, it appears that more than 50% of companies are experiencing skills shortages, 70% of our clients are trying to recruit extra heads and 80% expect to have problems getting appropriate candidates.
This paints a bleak picture when you need to attract new talent. We are taking a proactive approach to looking at each role and what we can do differently to identify future talent. Importantly, what aspects of the process can our clients influence to make it more likely they’ll succeed.
The to-do list is all encompassing. It includes:
Companies need to be recognised as an attractive place to work - and the message and brand have to be real. For any advice on how to do this read or listen to Simon Sinek – people recognise inauthenticity in a heartbeat. One such clip can be watched here.
Differentiating your company is critical. There will be elements of your organisation that stand out from the potential stereotypical company providing similar services. In a world where we want things now, moving roles is no different. Vacancies that have closing dates too far in the future, waiting over a week for interview and no decisions for 10 days are failing to attract the right candidates. People want to be interviewed quickly and know the outcome promptly so they can move on if they’re not successful. In such a tight candidate market, consider benchmarking new people against your team members. The luxury of waiting for additional candidates as comparators is gone for the moment.
Interviews need to be enjoyable and memorable for the right reasons. Have people great at interviewing, selling the role, your company, your working environment and culture to prospective employees. Covid has given people the chance to be hypercritical for their next move. Expectations have shifted and they are more exacting. Great candidates don’t need to job hunt for long so if you see someone you think is amazing then hire them before someone else does.
A great interviewer needs to be knowledgeable, excellent at building rapport and making people feel welcome as well as a good listener. Other people in the room can be the evaluators. They don’t need to lead the meeting to judge the quality of the candidate in front of them.
Offering the role and sending out a contract doesn’t mean you can take a break and celebrate just yet. A person is at their most vulnerable when they are working their notice. Mentally, they’ve detached from their previous company and some may be persuaded to look at other attractive roles while they are on their notice period. If you haven’t made a superb impression, pulled them into your community or team, and welcomed them properly after they’ve accepted, then they may be curious about other roles.
Keep in touch, welcome them into team meetings, introduce them to your people, include them in general communications and future plans. Consider onboarding them early by getting them involved in your induction programme about the company, people, etc. – all areas that are in the public domain, so you don’t tell any secrets, but helping prospective employees to be one step nearer their start date with you.
Investing in growing your talent is more critical than ever now. There are a lot of 6th form students who may not want to go onto further education but may be fabulous trainees for you. The apprenticeship route will grow the talent base longer term. Consider testing potential apprentices as interns but give them real projects so you can assess them properly. Students need work experience and holiday jobs are in short supply, so employ them each holiday period until they finish their studies. Make it so amazing that they’ll want to work for you when they’ve finished their qualifications.
New people need to be looked after from the minute they walk through the door or the moment they log onto the virtual meeting. Welcome them, be ready for them, structure their induction and 1:1s and remember to ask them how they’re feeling about their new role. Don’t blow all the hard work in getting your new person to start with you.
We can’t ignore that the last 18 month have had a profound effect on everyone and many priorities have changed. Imagine how you’d feel if your key person resigned before they do it – people will stay with you if they feel valued, paid a fair salary and their work has a purpose. Don’t ignore your great people by concentrating on getting new hires or focussing on those who resigned.
The truth is, you need to work harder and more creatively to attract good people. Your offering should differentiate your company and explain the good, and the not so good, bits. Sell the role and company first before you decide if you want the person in front of you – you need them to want to work for you first. Then when you find them, act quickly, be open with them and keep all communication channels open, always.
I wish you the best of luck; but don’t leave this to luck.
For more information and any recruitment queries, please contact Sue Ormerod:
Telephone: +44 (0)791 873 3904
This report provides an analysis of salaries commanded by professionals across the North of England.
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