Kate Bergman, Director at Arrow’s Group Global, has seen the tech recruitment world rise, fall and rise again, and is upbeat about the year ahead for the Tech Industries.
“The last twenty years have seen unparalleled technological transformation across every sector, and while the current economic outlook is by all accounts bleak, we’re still seeing opportunities everywhere, for those nimble enough to take advantage of them.”
Despite the anxiety of downturns, and the dramatic cuts at Silicon Valley at the back end of last year, the future of work is undoubtedly digital, and will need to be delivered by skilled technologists. With over 600,000 unfilled digital and tech roles in the UK alone, there is reason for the sector to remain optimistic.
So, what can we learn from the current situation in the sector?
Businesses are having to be more agile, adapting their business models and seeking new revenue streams. Those who are nimble and willing to innovate will continue to build brands and sell products. The good news is that investment in the tech sector is still there. UK artificial intelligence (AI) startups were forecast to attract £7.5bn in investment in 2022, in a sign that the sector remained strong amid turbulent macroeconomic conditions. Entrepreneur network Tech Nation found that the AI sector took 14% of all UK VC investment. Fintech remains the UK’s dominant sector for funding.
Digital advertising has fuelled the web for the best part of two decades, however, you only have to look at emerging platforms such as TikTok to see that this is unlikely to continue. This year, TikTok ad revenues are projected to edge past $5 billion, representing 139.9% growth YoY, making up 2% of the total US digital ad market spend. By 2025, the platform is projected to surpass 1 billion users worldwide presenting great opportunities to reach a global audience, easily and effectively.
We’ve also seen a raft of subscription models that have been transforming the business landscape. By 2023, it’s estimated that 53% of software companies will embrace the subscription model. Faced with the opportunity to grow revenues up to 5x-8x faster by adopting a subscription model approach, many businesses are moving away from one-off payments to create ‘forever transactions’ with loyal repeat customers.
It’s important to build sustainable business models that allow scale where appropriate. The cuts across of Silicon Valley are not all down to poor planning, but Patrick Collison at Stripe, sent an email explaining why they had to restructure, cutting 1,000 jobs, taking responsibility for over-investing. Even if you feel your business is resilient enough or has performed well in the past, it’s important to assess every aspect of your operations to ensure they are working as you’d like, and if not, create a plan B for if the market worsens.
Recessions often induce a wave of re-structuring or redistribution of talent, as businesses optimise their budgets when times get tough, and although unsettling, this shouldn’t be viewed as wholly negative for the sector. While big tech companies may no longer need as many young innovators, the SMEs of the UK are in dire need of their expertise.
For opportunistic businesses, and those looking to scale, they now have the opportunity to hire highly experienced workers who have been made redundant, or who are not getting the support they need in their current role – but they have to act quickly. Paradoxically, layoffs can also be good news for the employees. Tech professionals who are part of these layoffs will likely end up on one of two paths: back with another large tech firm in a similar role, or with a smaller company where they can put their world-class skills to the test, and therefore have greater impact.
I believe that we’re only at the beginning of this transformation journey. Many industries are still going through digital transformation and will continue to invest large sums into their tech and digital infrastructure, and with over half a million unfilled vacancies, talented engineers and consultants will always be in demand. Whilst I don’t underestimate the challenges that the sector faces, there are still huge opportunities for talent and businesses alike.
By Kate Bergman, Director.