Over the past decade, sky-high valuations of tech companies and rivers of VC funding have starved companies in more conventional industries of digital talent. But that might all be changing.
The second half of 2022 has seen a raft of tech firms like Salesforce and Apple announce hiring freezes, while others made large-scale job cuts to brace against tough economic headwinds.
One result is there is more potential tech talent for ‘second choice’ industries to snap up. But could traditional industries such as financial services and utilities hold a new appeal for digital talent with offers of attractive salaries and job stability? Analyst Forrester believes so. It suggests that continued tech redundancies will make traditionally ‘unattractive’ industries desirable again in 2023.
“In the past, hotshot techies and marketers might have scoffed at the idea of working for ‘stodgy’ financial services or utility companies. But those industries now offer attractive salaries and job stability that their startup counterparts cannot,” notes Forrester in its European Predictions 2023 report.
“We’ve received scattered reports of smaller, technology-focused companies having more trouble recruiting technology and marketing talent from more established industries,” explains Laura Koetzle, vice-president, group director at Forrester.
“The potential candidates aren’t interested in being ‘last in, first out’ when the funding dries up. And those two phenomena – more tech talent migrating to traditional industries in the first place, and candidates sticking with a job at an established firm – would both reflect talent-seeking stability.”
Going beyond job security
Chris Fernyhough, director at The Bridge, a specialist in IT and digital recruitment, says there are lots of examples of candidates moving from tech companies to more traditional employers to take DX roles – but it’s not a move driven by a need for more stability.
“We recently placed a candidate who moved from an ecommerce company to an airport, where he can be involved in digital transformation that will involve AI, machine learning and data analysis to improve the passenger experience and deliver efficiency and business improvement,” he says.
“Using leading-edge technologies and the appeal of being involved in a transformation that will make a tangible difference were key influential factors for the candidate because he will be able to see the positive impact of his work, while building on his CV to enhance his future employability. The rewards go beyond financial considerations and job security – there is a clear move for some candidates to choose roles that have purpose and measurable outcomes.
“Another example of this is an engineering startup we’re working with, which will play a major role in future-proofing the UK’s energy supply. Candidates are attracted to being involved in a cutting-edge concept, and by having the opportunity to make a difference for the greater good.”
A sense of purpose
Importantly, Fernyhough says that tech candidates are looking for environments where they not only feel valued but can see the value in the work they are doing – and DX projects in traditional sectors can often provide that.
Elsewhere, Chris Adcock, managing director of recruiter Reed Technology, says we are in a candidate-driven market. “Companies are crying out across the board for technology specialists in all practice areas and remuneration packages are at the strongest they have ever been,” he says.
“The pandemic put digital strategy high on the agenda for many businesses. Demand for roles such as data specialists, developers and analysts was already on the increase, but they spiked during and post-pandemic. Finding high-quality specialists with the right skills has been a challenge for a long time in the technology sector, and sadly this became more challenging in a candidate-driven market.
“These companies need to look at new ways of engaging talent beyond permanent and contract roles. Using outcome-focused statements of work solutions or fractional models can help businesses through a time of digital transformation.”
Adcock also points out that jobseekers are looking past the pay packet to what a business can offer them.
“Culture, progression and benefits are key to attracting and retaining talent. Benefits such as flexible or remote working could once have been a strong USP but now they are seen as a given in the market.”
Forrester, too, maintains that incumbent businesses will need to build diverse and dynamic cultures to retain their additions. DX may help to entice people to work for a stable company that is digitalising – and keep them for the long term.
“Our research shows that when employees find purpose in the work they do, they’re more committed and the organisation will be better able to face adversity,” says Koetzle. “And for many prospective employees with sought-after digital skills, being part of a digital transformation that they can see is critical to the company’s strategy, and its future, reinforces that sense of purpose.”
Levelling the playing field
One recent report found enterprise digital transformations to be stalling due to a lack of job-ready digital talent. But with digital talent available, more digital transformation projects should be able to get off the ground.
But without board-level support for digital initiatives, digital projects tend to stagnate or fail, says Philipp Ortlieb, partner and chief people officer at digital consultancy OMMAX.
“We recently found that, in a study of 380 board members of 55 of the UK’s largest family-owned companies, 73% did not have any digital expertise. Innovation is becoming increasingly central to businesses across all industries, and business leaders need to keep on top of it and start integrating digital projects into their strategic business planning.”
He maintains that while DX projects can help to attract digital talent, “The best talent will tend to go towards the most interesting and challenging projects.”
So there is likely to be more of an even playing field between traditional industries and tech companies and startups when it comes to hiring in 2023. Innovation and interesting work will be central to attracting and retaining talent – regardless of industry.