UK tech employment at a record high

It’s good news for technology jobseekers. The Office for National Statistics’ (ONS) latest reports show that the tech sector is among several industries with a high number of unfilled job vacancies across the UK.

The ONS figures show that from November 2018 to January 2019, the level of employment in the UK increased by 222,000 to a record high of 32.71 million. The employment rate was 76.1% – the highest since comparable records began in 1971. And the unemployment rate fell to 3.9%, the lowest rate since the mid-1970s.

At CWJobs, we’re well aware of the high number of vacancies in the tech sector and we foresee a year of positive developments in the industry. Let’s explore some of the underlying reasons for this high tech employment rate.

Tech skills shortages

We’ve previously written about the skills shortages facing the tech sector and outlined how companies can attract top talent. Our own research has found that 94% of tech employers believe there is an industry-wide skills shortage. As a result, many tech job vacancies remain unfilled for long periods as employers struggle to find suitable candidates.

The ONS’ recent reports conclude that the UK labour market is a ‘sellers’ market, where demand outweighs supply. This has forced tech companies to evaluate their talent pool and rethink their recruitment processes to ensure they attract talented candidates.

We’ve noticed companies being more transparent with salaries and offering incentives to retain existing staff. This drive to close the tech skills gap could be seen as one of the underlying reasons that the industry has seen in an increase in vacancies

An increase in salaries

In one of our recent posts, we looked at the tech industry over the coming year and predicted that tech companies will offer higher salaries in a bid to retain their top talent.

Although money isn’t the principal motivator for the tech workforce, it does look to be a main focal point for companies. According to the ONS, employees’ total average weekly pay increased by 1.5% on the year in January 2019.

With the increase in tech job vacancies, we might assume that employers have felt increasing pressure to increase salaries to attract more candidates and retain existing staff.

A rise in flexible working

In our post about the benefits of flexible working, we cited a statistic from the Smarter Working Initiative, which reports that 84% of employees in the technology industry have the option of flexible working, compared to the UK average of 65%.

As a largely digitised industry, the tech sector is well-suited to remote working and having employees choose their own working hours. Today’s tech job seekers expect more than quirky benefits. They want the flexibility to achieve a good work-life balance. Employers that don’t recognise this will lose out on attracting top talent to their competitors.

In a recent interview with Business Insider, CWJobs’ Director, Dominic Harvey said: “Employers often miss out showcasing the unique selling points that are valued by candidates. Can team members work remotely? What are the possibilities of promotion? What does the future of the business look like?”

We could assume that tech companies that enable their employees to work flexibly are attracting a larger proportion of the top industry talent, creating unfilled vacancies for their competitors.

Increasing diversity

The ONS figures show that the unemployment rate for women is at a record low of 3.8%. The number of women in employment increased by 144,000 to reach a record high of 15.4 million over the same period. This was the largest increase in the number of employed women since 2014.

Last year, we predicted many positive developments for gender diversity in the tech sector and expected to see companies building diversity into their company culture. Companies like KPMG and Hewlett Packard are currently leading the way in closing the diversity gap in tech by implementing diversity initiatives.

More tech companies are actively working to remove gender bias from their recruitment processes by adopting more inclusive practices. Many are using skills-based assessments in place of face-to-face interviews to remove bias related to gender, age and race.

The ONS’ reports also note an increase in participation in part-time workers and women aged over 60. One possible reason for this increase in the tech sector could be due to companies offering returnship programmes.

In 2016, PWC published their report The £1 Billion Potential of Women Returners, which predicted that addressing career breaks could provide the UK economy with a £1.7 billion boost. We might assume that returnship programmes like IBM’s Tech Re-Entry, Intuit’s Intuit Again and Microsoft’s Diversity in Dynamics have contributed to the tech sector’s high employment.

Brexit’s impact on tech employment rates

Despite the uncertainty surrounding Brexit as outlined in our post Is the UK Tech Industry Ready for Brexit?, the tech industry’s encouraging employment rate may lead us to assume that Brexit won’t negatively impact the industry as much as initially thought.

Although the UK has seen a reduction in the number of non-UK nationals applying for jobs, we might seek assurance in the fact that tech companies seem to be pro-actively pursuing top talent from within the UK. It’s also encouraging to know that according to the TechNation 2018 Report, the UK’s tech sector is growing 2.6 times faster than the rate of the UK economy.

In summary, employment rates in the UK’s tech industry is at an all-time high. Tech companies are future-proofing their businesses by working towards closing the sector’s skills gap, increasing salaries, implementing flexible working initiatives and focusing on increasing diversity.