Talent trends: Future gazing and forecasting
I’ve just published an article on the latest talent trends in partnership with Barclays’ Fintech hub, Rise. It includes my take on how remote working might influence the talent market, how existing roles might be affected, and whether Covid-19 could mark the end of blitzscaling. Here’s 8 trends that I have shared in the article. You can check out the original article here
Nothing that’s happened before could possibly prepare us for the situation we’re now in. But in the world of digital talent, some past experiences do come to mind.
I started work during the dot-com bubble (showing my age) and the credit crunch, and in this crisis I can again see fundamental changes coming that will have a lasting effect. From how we currently work to the end of “blitzscaling”, there’s a big shift coming as we enter a buyer’s talent market for the first time in a decade.
#1 - Remote working
An interesting result of this situation could be how it affects where employees of London-based tech start-ups come from. Rather than focusing on the Greater London talent pool, companies could now realise that employees can come from elsewhere in the UK. It should also give Londoners who’ve built their careers in the capital the freedom to move elsewhere in the country.
#2 - Interim, fractional consulting and portfolio careers
With funding pulled back, it could be difficult for ambitious companies to pay for experienced scaleup executives full time - so offering part-time or interim roles will be more efficient.
This will also allow people to build portfolio careers, which was a growing trend long before covid-19 hit. Earning 100% of your income from one place is a risky way to operate, and interim positions will offer a lifeline for employees and employers alike.
#3 - Is Furlough delaying mass redundancy?
There will reportedly be nine million furloughed employees in May 2020. The question is, how many will actually get their old job back?
If it's 40% to 50%, this will have a catastrophic impact on the employment market. It’s difficult to confirm these numbers as it’s changing all the time, from our market intelligence it does not sound like many companies will hire staff back. There will be huge legal complications too, as some firms are using furlough to avoid paying redundancy packages.
The government will need to extend furlough. And the longer it extends, the more time companies have to reflect on whether to retain staff or downsize and rebuild in 2021.
Companies with a strong sales revenue structure and lean overheads could come out of this crisis relatively unscathed. Meanwhile, businesses with a bloated headcount and large offices will face more pressure. And perhaps most importantly, Fintech businesses that rely too heavily on VC funding could be caught short. That was an issue under the spotlight anyway - and this will be a big turning point.
#4 - Salaries could plummet
London was already lagging behind other global hubs like San Francisco, New York and Singapore on salaries, with flat or stagnated pay across tech for many years. I think this will push down salaries a further 20% to 30% for the next 12 months.
#5 - The end of blitzscaling
Ried Hoffman's famous book and scale up strategy is looking a bit out of date now.
It’s very difficult to see how blitzscaling can work in the short to medium term - and growth at all costs before profit isn’t going to work in the post virus world.
Founders and investors will refocus on selling products for a profit before growth. It’s probably less about what sectors are most affected, and more about business models.
#6 - Musical chairs for Sales, Marketing and HR
Always the first to be scaled back in a downsizing panic, Sales, Marketing and HR departments will be stripped down - and probably in that order.
Interestingly though, the only option to bounce back quickly will be to aggressively market and sell products. So there will probably be a rush to rehire from competitors - quite possibly for less, in what will suddenly be a candidate-rich market. You will need to rehire your HR function quickly, as it's not going to be easy to screen 1000 CVs per role.
I think this means there will be a really big opportunity for nimble companies to cleverly upskill during 2020.
#7 - Software Developers and IR35 limbo
Interestingly, although Software Developers won’t find their careers stalling, there may be a large pool of software developer contractors entering the perm workforce for the first time.
The proposed May 2020 IR35 deadline was put back a year, but in preparation most corporates reduced their contractor developers in Dec/Jan - pre virus. The contract roles have dried up and their only choice might be full-time roles.
This could be great news for smaller Fintechs offering sanctuary with a full-time role. Alternatively, a fixed-term contract with company benefits could be attractive too.
#8 - For the first time in a while, it’s a buyer’s market
The hiring market has been talent short for the last decade. We have now moved into a buyer’s market, with an oversupply of candidates for almost every role.
A different challenge will emerge, how to attract the A players (the top 5%)? Maybe real equity conversations will start to take place to attract and keep entrepreneurial, risk-taking talent looking for a long-term project.
References
[1]https://hbr.org/2016/04/blitzscaling
[2]https://www.gov.uk/government/news/chancellor-extends-furlough-scheme-until-october
[3]Blitzscaling: The Lightning-Fast Path to Building Massively Valuable Companies, HarperCollins, 2018
[4]Broadly speaking, IR35 is a set of UK tax rules that make sure workers who provide their services through their own limited company pay the same tax as employees.
