2020 was a bad year for everyone, right? Well, not completely. While most industries faced their biggest challenge yet - from hospitality flipping from total closures to reduced service, and healthcare under unprecedented strain - others thrived.
The tech sector, already growing at 2.5 times the rate of other industries, has seen an even bigger boom - as digitalisation takes an even bigger hold, as many of us are confined to living and working in our homes. Good news, but it could cause problems for their employees.
The impact of the pandemic on the tech sector
Generally, the tech sector was already booming before the pandemic hit. Market investments reached £10.1 billion in 2019, with tech employment in the UK growing by 40% - making up 9% of the whole national workforce. But unlike other thriving industries, the pandemic did little to hamper that.
This boom was largely across the board. The ‘big 4’ all saw significant success, and subsequent expansion - with Facebook buying Giphy, Amazon getting self-driving car company Zoox, and Apple acquiring multiple start-ups. But start-ups also saw success, with investment up by 34% in the first month of the UK lockdown. Online retail surged by 10% (an increase that previously took 10 years to reach), internal digitisation in some organisations accelerated by 3-4 years - growth in tech seemed a perhaps unsurprising side-effect of Covid-19.
What does fast growth do to your company culture?
Thriving, not just surviving, through a pandemic is definitely a win - but there are some things to bear in mind, if your organisation has grown in the past year. And the main one is the impact on your employees.
The first impact is obvious: a bigger business means a bigger workforce. So any business growth, especially ‘hypergrowth’, means hiring new talent. There’s two ways this can go. If you don’t recruit fast enough, staff become overstretched and their performance suffers - meaning customer satisfaction dips. It also means they’re likely to become demoralised, and could even look to leave your organisation… which would only exacerbate the problem. But on the other hand, an influx of new untrained employees could also damage the quality of your output.
What’s key is, however impressive your success, you maintain culture above all else. Having a shared sense of purpose is crucial, even if your vim and vigor start-up days are long behind you. That needs to feed into your hiring practices, training and development, and recognition of staff.
The two side effects of tech’s recent boom
1. Added pressure on the hiring crisis
Before the pandemic, and the industry’s subsequent success, finding the right talent was already a challenge. The digital skills gap was already quickly widening, with 9 out of 10 organisations saying it affected their hiring, and 85% of specialist jobs being increasingly difficult to recruit for.
The pandemic hasn’t helped: in 2020, nearly 800,000 additional jobs were created in computer programming and similar, but around 50% had interviews cancelled or postponed thanks to the pandemic. And despite the growth in the industry, many have slowed or stopped hiring - including 81% of tech start-ups, and 62% of SMEs having had to consider or make redundancies. Although more opportunities exist, many are linked to those niche skills missing from the talent pool - like data science, and AI.
2. Exacerbated diversity issues
Tech has had a gender problem for a long time - with women making up just 19% of tech workers. It’s not just a numbers game either: women’s quit rate is 47% to men’s 17% in the tech industry, and 63% feel they’re not taken seriously, which suggests this is a diversity and inclusion issue.
The hiring boost since the pandemic has again seen men overrepresented - posing not just a diversity challenge for the industry, but for wider society. As it’s one of the fastest growing sectors, it’s crucial that steps are taken to encourage diversity in these roles. It goes beyond the gender split too - ethnic minorities also face inclusion issues, with Black and Hispanic workers in the US having much lower satisfaction rates, and a London-centric focus in the UK which can only worsen diversity issues.
How can organisations grow bigger and better?
- Training and development: With a worsening skills shortage, look internally for employees that you can invest in - training them to fill the role you’re missing. Studies show that high-performing companies are more likely to offer advanced development opportunities. As 75% would look to move on without training opportunities, it means you won’t worsen the problem you already have.
- Flexible policies, for a wider talent pool: The millennial employees moving through the market expect flexible, diverse workplaces - and making remote work and flexible hours an option means widening your talent pool, not just to those outside of London but to carers, parents, and other groups who require a better way to balance work and life.
- Measure organisational fitness: rapid growth leads to rapid changes, so it’s important to keep your finger on the pulse of your people. Our OrgFit methodology is designed to assess your organisation holistically, looking at the 16 things that your employees most care about - which are subsequently closed linked to profits, growth, and NPS.