The UK’s small tech employers have a once-in-a-generation opportunity to hoover up top-talent that would normally be inhaled by the tech giants, according to recruiter Randstad.
Throughout 2022, tech firms have responded to the global economic downturn by slashing jobs. In the United States alone, 37,000 workers in the tech sector have been laid off so far this year – and the theme persists in other tech-heavy markets around the world. As the Washington Post reported in July: “Big tech is bracing for a possible recession”.
Apple laid off many of its contract-based recruiters in the past week, part of a push to rein in the tech giant’s hiring and spending. About 100 contract workers were let go in a rare move for the world’s most valuable company. The recruiters were responsible for hiring new employees for Apple - Bloomberg said the cuts underscore that a slowdown is underway at the company. Apple CEO Tim Cook recently explained why the firm was making job cuts by saying “We believe in investing through the downturn. We’ll continue to hire people but we are being more deliberate.”
Microsoft recently removed open job listings and the company has said hiring cuts will continue for the foreseeable future. It’s an expansion of a hiring slowdown disclosed in May, which mostly affected its Windows, Office and Teams groups. In June, cuts to new headcount in the security business were also reported.
Los Angeles-based social media network Snap — owner of Snapchat — has announced it will slash non-core investments and cut 20 per cent of its 6,500-strong workforce.
London has not been immune from these global trends - with layoffs already recorded at health app Babylon (100), digital assets trading firm Blockchain (150), and events firm Pollen (200) during July and August - although they are overshadowed by the 750 redundancies at Cazoo in June. Amazon has halted the aggressive expansion of its checkout-free convenience stores. Its first checkout-free store in the UK opened in March last year, in Ealing, west London. Since then it has opened another 18 shops, predominantly in the capital.
Adrian Smith, senior director of operations at Randstad said: “Big tech’s hiring freezes stand in stark contrast to the companies’ traditionally bulletproof reputations for untrammelled growth. For the last decade, tech companies have soared hiring tens of thousands of workers. But in the post-pandemic economic crunch, technology companies worldwide are announcing hiring slowdowns, freezes and, in some cases, widespread layoffs. And, of course, when America sneezes, the rest of the world catches a cold. We’ve seen 2,000 redundancies in London since the start of the year and there will be more to come.
“What a difference a few months can make… Last year, the global tech sector was enjoying sky-high valuations leading to tech companies announcing ambitious expansion plans and huge hiring goals. Meanwhile, smaller tech employers have a once-in-a-generation opportunity to hoover up top talent that would normally be inhaled by the big tech giants. For too long, a technology skills shortage has been a risk to business and economic growth; and there remains a strong economic need for more skills for digital transformation projects. Employers should grab this opportunity with both hands. JFK said the Chinese word for "crisis" means both ‘danger’ and ‘opportunity’ and that certainly seems to be the case here. Smaller companies may be able to take a longer view than listed giants, reversing the trend of their firms being mere incubators of talent for the tech giants. Look at the length of recessions in the UK: the early 1980’s recession lasted 5 quarters; the early 1990’s recession lasted 5 quarters; even the Great Recession lasted 5 quarters. So there’s only 3 more quarters to go before these staff will be needed.”
ADVICE FOR EMPLOYERS
UK government figures show there was a 50 per cent rise in technology job vacancies advertised last year and that almost half of employers were struggling to recruit for digital roles. Randstad says smaller tech firms can attract talented people who might have joined big tech firms, by investing in skills themselves. Employers in the UK spend just half the European average training their employees. SME’s need to put more into training.
Adrian Smith said: “One of the tech giants has said it is teaming up with businesses to offer recognised certificates for training in areas where there is high demand, such as data analytics. The courses are online and take between three months to six months to complete. Tech SMEs in the UK need to be providing something similar.
“If they still can’t find the right people, tech employers can try to game the system with some title inflation - offer status instead of cash to help win the war for talent. It’s a powerful recruitment tool and cheaper than paying big tech money - incentivising staff without ramping up the wage bill.
“Or they could try accessing a wider talent pool by considering contractors. This is potentially a useful ‘try-before-you buy’ strategy.
“Either way, they will never find the competition from Big Tech at as low a level as it is now.
“In the long-term, as a country, we must invest more in education as well as research and innovation. We also need to make a job in tech more appealing to women - it’s a male dominated environment and can be intimidating for young women without many female mentors. We change that by getting into schools early. Local employers need to deepen engagement with children and liaise with local colleges to identify the skills and workforce of the future .”
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Gender research: Randstad’s 2022 report on gender equality in the workplace is here
About Randstad: Founded in 1960, Randstad is the world's largest provider of recruitment and HR services (by revenue, gross profit, and market share), employing more than 40,000 people in 5,000 locations. In 2021, it generated revenue of almost €25 billion last year across 38 markets. Last year, Randstad helped more than two million candidates to find a job; trained over 450,000 people; and advised 235,000 clients on various aspects of their HR strategy - from talent acquisition to total workforce management.
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