Grow Your Own – Should Innovation Economy Companies Do More On Training?
It seems to be the same just about everywhere. According to research published last week by software development company STX Next, hiring tech talent is far from easy. Drawing on responses from 500 Chief Technology Officers around the world, the report found that 41% were having trouble recruiting the right people.
That’s a snapshot of the global picture. Here in the UK. – where I’m based – there are particular problems. Across the economy as a whole, there are more than one million unfilled job vacancies. In one respect, that’s a sign of buoyancy Equally, though, with unemployment very low, it’s an indicator that there aren’t enough people, with the right skills to fill the jobs.
And Britain’s innovation economy faces some particular challenges. According to Tech Nation’s latest Jobs and Skills report demand for tech talent was up 42 percent in 2021 when compared with 2019. Again that is a sign of strength and the report rightly cites the sector as a major contributor to job creation.
But it’s only a strength If you can find the people. Last year, recruiter Harvey Nash found that 43% of British businesses were struggling to hire tech talent. Companies big and small are recruiting from a limited pool of domestic workers and it is no longer easy or straightforward to attract people from the European Union. Brexit ended freedom of movement into Britain and skilled people wishing to come here must submit to the expense and bureaucracy of applying for visas. Why do that when you can go to Paris, Berlin or Barcelona instead?
Small companies in fields such as data science, A.I. and blockchain are probably well-positioned to attract graduates anxious to make their mark working on cutting edge projects but at the same time they are competing with much larger businesses with the resources to offer generous salaries and benefits packages.
There is an economic cost to all this. According to a report by lobby group TechUK, Britain’s economy could be $6 billion smaller in GDP terms because of the skills shortages facing SMEs.
So what can tech and fast-growth companies do to address the skills shortages? Well perhaps, one way forward is to do something that British businesses have seemed increasingly reluctant to do in recent years – namely train staff rather than simply compete for the best computer science graduates or coders with previous experience.
That’s the approach taken by Sidetrade, a company that offers an A.I. driven cloud solution to help corporate clients manage payments from their customers. Put simply, the software predicts when customers will pay for goods or services, enabling businesses to optimise their invoice chasing. Predictive analytics are at the core and finding the right talent is essential.
“The first pillar of our strategy is innovation and to do this, hiring the best people available is key,” says CTO, Mark Sheldon.
An Open Program
Sheldon joined Sidetrade when the company he founded, BrightTarget – was acquired. As he explains, in addition to recruiting in the normal way, Sidetrade’s operation in Birmingham, England has been running a Coding Academy, taking students from a range of backgrounds and educational pathways. “The program is open to everyone,” says Sheldon. “You don’t have to have experience or a particular kind of education.
There is – inevitably – an assessment process designed to judge aptitude and willingness to learn new skills, but Sheldon says the academy has attracted students ranging from school leavers to PhDs.
A Real Contribution
But is this merely a good deed in a wicked world or does it make a real contribution to Sidetrade’s requirements? Or to put it another way, is it helping to address skills shortages?
Sheldon says the courses are structured around each participant completing a project, an approach that helps to foster real-world skills. “So far 52 people have gone through the program,” he says. “We’ve offered 12 jobs and 80 percent are still with us today.”
At first glance, that might not seem like a high percentage but those that are offered work are considered capable of joining existing development teams and making a real contribution from the outset.
A Wider Pool
At a time of skills shortages, Sheldon argues that many companies are missing out. “They are relying on graduates or people with previous experience, but there is a wider talent pool,” he says. In addition, bringing in people from diverse backgrounds is a benefit in itself. “Everything we do around innovation is supported by diverse backgrounds.”
But here’s the thing. Sidetrade is at the very upper end of companies I cover in this column. Although very much part of the fintech/innovation economy sector , the company has been turning in solid growth for two decades and in recent years they have been acquiring startups such as Amalto and BrightTarget to bolster their technology and teams.
So is this a route businesses at an earlier stage on the growth curve can emulate? Sheldon thinks any company can train. That said, the structure of the training might be different. For SMEs, the key might be partnerships with further education colleges, universities and bootcamps. This is something that has been highlighted by Tech Nation – the agency charged with helping UK. tech companies to grow – in a recent report.
The broad principle here is that poaching workers from other companies is ultimately counter-productive in that it leads to a salary and benefits upward spiral. Better, perhaps to fill at least part of the skills gap by finding ways to train the local talent pool.