Strategy & Organisation
How talent scarcity is shaping tech culture – for better and worse
The national tech landscape faces an unprecedented skills shortage. On average, there are now more than one million unfilled tech jobs in the UK at any given time. Record numbers of students are enrolling onto computer science courses, 5% more than in 2020 and 60% than ten years ago; including, positively, 350% more female students than in 2015. But even if the 130,000 people who applied to computer science courses last year graduated and pursued a role in the UK, they would barely dent the gap in the market.
On top of that, software developer demand is expected to soar this year and on top of that, the Covid-caused “Great Resignation” is accelerating automation (from lack of labour) which is also increasing the demand for technical jobs. This is an avalanche of a problem for organisations, and one that doesn’t have a clear solution. Because of the lack of labour, companies are desperate, which is creating some bizarre cultural trends in tech organisations. We wanted to understand the cultural ramifications of this labour shortage. We spoke with our experts to understand what they’re seeing in their businesses, and how they’re reacting.
Developers: more money, more problems?
Of course, technical talent benefits from talent scarcity. Salaries for these individuals have skyrocketed over the past few years, creating a new baseline for these roles. But how do higher and higher (and higher) salaries affect culture?
For so many organisations, it becomes easy to demand overtime or add pressure to project timelines. Surely, if an organisation pays more for engineers, they expect equal value in output. But we know what often happens when people are overworked and stressed: burnout culture that spreads to product, design, and marketing teams.
Pair burnout with a software developer’s ability to change companies on a whim, and you’ve got our current problem: a perpetual and normalised cycle of high pay, burnout, and job switching. This is beneficial to no one.
Sure, if you have enough money, you can hire who you need, but that’s not realistic for non-FAANG (Facebook, Amazon, Apple, Netflix, Google) organisations. Companies need to proactively maintain their culture, prevent burnout, and create healthier workplaces.
Working from home has made implementing cultural benefits more difficult, as Brian Robinson, UK Managing Director of DEPT®, states: “I see a lot of what I call ‘fatigue’ within organisations. I believe this stems from a lack of separation between work and home. There is not as much variety in experiences, which feels monotonous.”
The solution? “It’s all about bringing back the human element. Connecting with people is important for variety, burnout prevention, and meaning amidst the day-to-day. Something like DEPT® Fest or happy hours gives people the time to connect, which recharges us all. People have lost that human element, so we all need to find ways to have that in our cultures.”
It’s all about bringing back the human element. Connecting with people is important for variety, burnout prevention, and meaning amidst the day-to-day.
Brian Robinson, Managing Director, DEPT® UK
Organisations: a widening gap in culture
Despite the problems of burnout in many businesses, no one can deny that there have been positive cultural impacts due to the power of individual workers. Agile companies have made their work environments healthier, granting more freedom, satisfaction, and work-life balance to their teams.
These adaptive companies are widening the gap between themselves and old-school, legacy organisations. The gap might now be restricted to talent, but eventually, it will be the ability to operate a successful business in this decade.
Organisations that cling to a “traditional” work culture will undoubtedly haemorrhage technical talent, whether they can pay well or not. Sarah Steele, People and Culture Director at DEPT® UK, predicts that “scarcity will weed out companies, starting this decade. The shifts in work culture trends may not look huge year to year. However, in five years, if you haven’t culturally evolved, you won’t be able to hire enough technical people. I think we’ll start to see companies fail.”
More diversity, but less diversity
Being desperate for workers has both positive and negative effects. Years ago, many companies relied on internal referral networks. This tactic was accepted in many instances because you tended to hire like-minded people. However, it’s not conducive to promoting diversity.
Today, companies are searching far and wide (literally) for engineers. By going outside of internal referrals and recruiting with diversity in mind, you can expand your team’s diversity.
On the other side of talent, candidates have opportunities they didn’t have before. Because companies are more lenient and flexible, employees with imperfect experience have a chance at better jobs. And often, when you take a chance on someone, they get excited, work hard, and appreciate their positions. It can be a win-win.
However, this same desperation for workers can backfire on companies and the teams inside. If you desperately need labour, it is too easy to disregard diversity, culture, and personality.
On one hand, skill sets are getting hired, but on the other, organisations are not being as thoughtful. Even when hiring managers predict a bad fit, they might overlook it, which can have major downstream effects on culture.
What to do in a world of talent scarcity
There is a lot of ambiguity in regard to talent scarcity and culture. Good things, bad things, good things that might soon become bad… you get the idea. What can you do to protect yourself from the unknown? Here’s our team’s thoughts on succeeding during talent scarcity:
Be strategic in technology
Your expenses will increase no matter what, so it’s up to your leaders to make sure your investments are paying off.
Create a culture where
burnout is rare
Giving people flexibility, time off, and a supportive environment is probably the best way to keep your developers and product teams happy.
Continue giving imperfect candidates a chance
These candidates may need extra time and direction than your other employees, but the key to doing this successfully (and protecting the organisation) is having them supported by solid managers.
Tomorrow’s most successful organisations prioritise empathy
A positive culture starts with empathy. Make sure your leaders practice it.
We don’t predict a huge influx of new developers anytime soon, which means scarcity will get worse. So it’s imperative that companies prepare themselves, both financially and culturally.
To connect with our team on talent scarcity, technology, or building products during a labour shortage, reach out. We’d love to help you create a strategy that aligns with your organisation’s culture.