Winning the Tech Talent War
by Andy Nacsin, Executive Recruiter
In today’s economic situation, companies are facing multiple new challenges when it comes to staffing. According to Forrester Research, today’s recruiting growth rate prediction is at 8%. Many theorists believe that this is because of the looming talent shortage and disconnect between positions open and skills of candidates applying. Another factor is that companies, while emerging from recession, are still remaining cautious on spending and are very selective when acquiring talent, regardless of their growing need to add headcount. Our nationwide overall unemployment rate has been hovering around 10%, and yet when we take a closer look within technology these numbers are closer to 4%. Other considerations that are affecting this climate are employee turnover, Baby Boomers retiring, more restrictive policies on foreign workers, companies resistant to relocation costs, and overall reluctance from employees to change jobs. So our challenge is how to cope with a growing talent shortage within the high tech and green tech industries.
The battle for top sales people and engineers is extraordinary in Silicon Valley and New York – These are our Talent War battle zones. The majority of technology growth occurs in these two large geographic regions and they also typically house the greatest number of top tier talent. The recession caused a stall in technological growth, but as we all know, technology will not stand still. As companies are racing to remain competitive they are creating a greater demand for programmers, engineers and sales people. The need for these candidates in our battle zones is greater than it has been in decades. These aggressive needs are now being greeted by a shortage of industry-leading qualified talent.
As a consequence of the current growth in technology paired with a very real talent shortage, employers are being pressured to increase salaries and other benefits. Any time there is an increase in demand, coupled with a decrease in supply, costs will rise – in this case, salary and benefits. Within the technology industry we are also being faced with competition from industry giants who have the resources to offer greater salary and benefits to not only new hires, but their current employees as well. This makes it more challenging for hiring employers to entice currently employed talent. For example, Google gave all of their employees a 10% pay increase last year, in addition to difficultly rivaled benefits. In the tech sector, we are seeing salaries on the rise; just how much depends on the specific jobs, required skills and overall experience.
Companies are competing to acquire and keep their top employees and it goes beyond salary. Skilled recruiters are playing a very pivotal role in nurturing the talent pool, selling opportunities and facilitating the hiring process. It is important that companies partner with recruiters to identify talent and work with close and open communication when working through the interview process. Being able to effectively convey corporate culture, benefits, growth potential and overall company strategy is the combined responsibility of recruiters and employers. We need to be sure that every employer is selling what they have to offer and motivating growth via branding, word of mouth, presence, social media, etc. While the market continues to be competitive and the candidate pool remains in demand anything additional we can be doing to attract and retain employees will have an impact.
When enticing talent there can also be the perception that larger companies are more stable and that smaller ventures come with more risk. The reality is that there is no guarantee when it comes to employment and this perception is often a fallacy as every opportunity offers different potential, benefits and stability. Workforce reductions are a very real reality for large organizations when budget cuts are necessary for survival. These cuts are most commonly achieved through reduction in workforce. Cisco had to let go of 2000 employees in 2009 as a result of the economic downturn. Start-ups or smaller organizations can often offer employees more stability within the organization and often greater visibility depending on your role. Even in a downturn if you are the only marketing person within a smaller organization you may have more security than if you are 1 of 20 in a larger company forced to make cuts. The thing to remember is that perception is not reality and it is important that every opportunity is evaluated equally.
Overall, companies should be prepared for when the labor market tightens by developing a strategy for attracting and retaining the right talent. Increased hiring due to economic growth will create more demand for talent, and more resources will need to be devoted to branding, marketing and recruiting. Changing these recruiting strategies by doing things like increasing salaries, offering relocation, increasing benefits, and creating greater awareness surrounding these changes will all become imperative. We also need to focus on retention by creating awareness around corporate culture, benefits, training, development, growth potential and even free lunch on Fridays!
About the author:
Andy Nacsin has been recruiting in high tech and alternate energy for over 8 years. He is an executive recruiter in the tech sector, and serves as the Director of Development at Redfish Technology. His objective is building long term partnerships to provide the highest level of satisfaction in career and talent matching.