how the great resignation has influenced the tech talent industry.
Today’s rapidly evolving industry has left many tech employees demanding more from work than extra pay and office-based incentives. Employees across all industries are increasingly leaving their jobs due to factors such as pay, limited career progression and few options to work remotely. Technology professionals demand similar benefits to other professionals, and based on market developments, businesses are accepting these changes.
The demand for tech skills has reached a high point, with many candidates receiving multiple job offers before deciding on a position. In the beginning, most people expected unemployment to escalate as businesses were forced to send people home, and for many, this did result in losing their jobs, particularly in the education, hospitality and childcare sectors. According to the Office of National Statistics, female unemployment in the UK increased to 5% in October 2020 but dropped to 3.7% in 2022. Industry experts anticipated the market volatility to make people more cautious about leaving their jobs due to concerns about finding a new position.
But at the beginning of 2021, despite the pandemic still being in force, people began to quit their jobs on a large scale. In the United States, over 4 million people quit their jobs in April 2021 and later that year, the job opportunities in the UK rose to a record high of one million. As of this year, over 60% of London-based professionals are considering handing in their notice. There are several reasons for the sudden mass of people leaving their jobs. The first one is a buildup of people intending to leave their job before the pandemic hit, and as we recover, some of these people followed through with their plans. A second factor noted by many industries is burnout and people choosing to take a different path in their lives.
People have different perceptions of their working lives and expect more from their careers. People also have higher expectations about their professional lives and clear outcomes from their work which directly support communities or the challenges we face, such as reducing carbon emissions or driving further climate action.
What could come as a surprise is some business leaders who are keen for their employees to return to the office could find reservations as more people have become accustomed to remote working over the last few years. While many are excited to return to the office, other employees do not want to return to the office environment and may be more likely to leave their jobs rather than return to the office. Some people are leaving their jobs as a reactive measure to the vaccine. A 2021 survey by the Kaiser Family Foundation, an organisation focused on health issues, discovered that over 70% of unvaccinated employees intend to quit their jobs if their employer makes vaccines mandatory.
How will this impact the technology industry?
These trends resonate in the technology industry, where employees worldwide have decided to leave their positions. There is a transformational change in the workforce primarily driven by technology and changing expectations. There has always been a skills shortage in the technology sector, but the factors that have accelerated the Great Resignation have directly impacted the tech market. For example, according to Microsoft, there were 2.5 million open cybersecurity jobs worldwide at the start of 2022, but a study by Gartner suggests that 29% of IT workers are interested in remaining in their current positions.
Studies suggest that the main skills gap focuses on STEM careers, so technology businesses and tech-focused positions are being greatly affected. Clients and other partners are taking action in response to the Great Resignation, which highlights a real challenge for many. There have been notable changes within the cloud, data management and AI markets. In other words, despite technology workers not necessarily having to leave their jobs to the same extent as other industries, the demand for their skillset has reached a record high.
In a candidate-driven technology recruitment market, the power lies with the candidates, and companies will have to focus more on the incentives and what will attract the best technical skills to their organisation.
Technology workers have always been in demand, so businesses have often tried to attract talent with appealing benefits. For a phase, startups and other larger tech businesses focused on the trendy and fun benefits in the office, but these don’t really meet the expectations of today’s tech worker. When the likes of Google and Facebook introduced these benefits, it was a novelty, and it was effective in creating a more fun and vibrant workplace. The look and feel of the office will always be important, but today it doesn’t necessarily represent the most critical factor to candidates.
Few people remain in a position just for the money. Leading companies like Amazon and PayPal have recognised they could potentially lose talent to other businesses that offer more appealing benefits, including work flexibility. Businesses that state they have to be in the office five days a week may struggle to attract the highest quality of candidates.
With more businesses offering remote or hybrid working opportunities, technology workers are no longer tied to a specific location, and neither are their salaries. Organisations outside of the main cities need to consider the salaries they offer to prospective talent. With the rise of hybrid working, jobs are becoming less focused on location, and remuneration must be more consistent with those in major cities. It could result in a narrowing of the salary gap across the UK. On the other side, this shift means employers can access talent in new areas that were previously not considered. It also means competing businesses can access the same talent pool. Businesses reliant on hiring from a local talent pool may find competition with other companies from other locations.
Remote working has also created a further challenge for cybersecurity. One reason why digital security has seen an increase in capital in the last few years is due to more businesses having to improve their cybersecurity due to more people working remotely.
Considering the challenges of finding new tech talent, businesses are looking to diversify their pipeline. For example, this could include upskilling people already working but lacking technology experience. Studies have suggested that barriers ranging from diversity, accessibility issues and the actual work environment have become more of a focus due to the Great Resignation. Encouraging businesses to try and eliminate these barriers that limit entry will enable further reach to new candidates.
Can only the big companies afford new tech talent?
Increased pay demand and transforming recruitment and training plans to attract and retain talent can be expensive. It raises concerns about whether tech talent is something that only large corporates will be able to compete. Some industry experts believe that the market changes could also benefit smaller startup companies. Increasing salaries for large businesses can result in higher costs compared with the increases in businesses with considerably smaller headcounts. Furthermore, reimagining talent structures can be less expensive and implemented quicker by smaller companies. In either case, it’s clear that technology workers will inevitably benefit from the accelerated demand for their skills and services.