How HR tech can help solve the UK’s digital skills shortage
Image credit: Leowolfert/Dreamstime
With businesses struggling to find the staff they need to maintain current growth, technology can help them recruit from a wider pool of talent.
During this year’s London Tech Week, news broke that investment in UK technology start-ups and scale-ups had reached a record £13.5 billion in the first half of 2021 alone. This is almost triple the figure achieved at the midpoint of 2020. Twenty unicorn companies were created in just six months, bringing the UK’s total to 105; more than France and Germany combined. Unicorns are privately held start-up companies valued at over $1bn.
The tech revolution, prime minister Boris Johnson commented, “is creating jobs, driving growth, and boosting investment across the country.” However, job creation doesn’t always go hand-in-hand with job vacancy fulfilment.
According to a recent Department for Digital, Culture, Media, and Sport report, the cyber-security sector faces a shortfall of 10,000 people a year. And cyber security isn’t the only market to be impacted. DCMS recently highlighted a ‘data skills shortage’, with up to 234,000 job roles requiring data skills currently vacant.
What’s behind this digital skills shortage? And, more importantly, what can businesses and recruitment specialists do to address it?
On 31 January 2020, after much deliberation, Brexit finally happened. However, coinciding with the UK's departure from the EU, many workers were making departures of their own – from the UK back to the Continent. This included many working in IT and engineering. Almost half of businesses questioned for a study earlier this year admitted they are struggling to hire the tech skills they need, with 61 per cent reporting that Brexit has slimmed the skills pipeline further.
While, in theory, Brexit may eventually open international hiring opportunities to fill the EU brain drain, in reality the fresh restrictions and need to navigate complex international laws have created an initial barrier to truly globalised recruitment. Whether in hiring and onboarding, or ensuring compliance, businesses must have extensive knowledge of every region in which they’re looking to hire – or risk hefty fines and a tarnished reputation.
The pandemic prompted a significant acceleration in the adoption of digital tools and technologies by companies across almost every market. As consumers turned to screens and virtual services, businesses turned to IT skills to deliver on these digital demands. Many tech vendors and digital service providers saw rapid growth. However, many legacy businesses were left with the urgent need to digitise, while faced with a rapidly depleting pool. In July 2020, the number of active job postings in the UK topped a million, with a significant surge in ads for IT professionals. Demand for web designers and developers shot up 15.5 per cent compared to June.
Many have sought to address the skills shortage with a knee-jerk reaction - hiking wages. However, paying a premium on salaries adds risk to the long-term growth of many of these organisations. Compounding these challenges is the end of the furlough scheme, which had previously shielded the nation from the full impact of Covid, and which may have either driven up wage spend at some firms or created fears of mass redundancies at others.
As the jobs market proves to be more resilient than many expected, companies can significantly mitigate the impact of talent shortages by re-evaluating their approach to hiring, and building a more diverse workforce. The problem may concern the tech sector, but the solution can be found in the very same place.
Enterprises must adopt a global outlook, leveraging talent from overseas to augment workforces and mitigate resourcing challenges. This doesn’t involve having HR physically in every location you’re looking to hire. It doesn’t require an in-house team of lawyers to navigate regional employment laws and red tape. It doesn’t even need a business to partner with numerous recruiters in numerous countries. All it requires is robust HR technology and an Employer of Record (EOR) solution.
Revenue growth, investment in technology, and acquiring global talent – it’s a tricky balancing act. The right digital infrastructure will be critical in creating and managing competitive global benefits packages (including medical coverage, employee assistance and relocation, dental and vision options, and pension plans). This can be the difference between attracting the talent a business needs and missing out on key hires. The same technology can also streamline the hiring and onboarding process while ensuring compliance, making it easy to leverage global talent.
In terms of global HR and payroll compliance, there is zero margin for error. EOR services can accelerate the process of employing overseas more cost effectively than creating and managing dozens of local entities in a host of different languages. This guarantees compliance for both the employee and the employer, in every country it places an employee using such a service. In addition, it reduces the risk to the business, as the partnering EOR will instead take on all the risks for any local or international fiscal or labour laws, allowing business and HR leaders to focus on the core business strategy and goals.
Automating functions is a key part of streamlining the HR role. Traditionally, processes like salary and benefits administration were time-consuming and prone to error. Global payroll governance was slow, challenging, or in the case of smaller businesses, simply not an option. Adopting technology that removes the need for manual processes means businesses can more easily expand, onboard, manage, and pay employees worldwide. This will help them break down the barriers to global expansion and drive successful revenue growth by taking advantage of a global talent pool.
When everything from payroll, benefits and human capital management to HR outsourcing, local compliance, and visa and mobility can be conducted globally, at scale, businesses will be able to leverage global talent and address the digital and IT skills shortage. The adoption of robust HR technologies and an EOR solution can help businesses and recruiters streamline employee onboarding, compliance, and payments, wherever they’re looking to recruit.
David Pepper is VP at Elements Global Services.
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