Key Brexit Implications on Tech Recruitment in the UK

extended teams in Ukraine, brexit implications on tech hiring, brexit implications on IT staffing

“Brexit means Brexit” and “We are all Brexiters now” – that’s what we heard for over three years until it finally happened. Now what? What does it mean for tech hiring in the United Kingdom? 

There’s still a lot of confusion and concern over the overall impact of Brexit, but one thing is certainly clear. The free movement of labour is over. For the British technology sector, this potentially spells disaster.

UK tech is heavily dependent on foreign labour. So it doesn’t help that the Tier 2 visa annual cap that’s set at 20,700 is hit early every year and is regularly dwarfed by the number of applicants. 

It’s difficult to predict how this will play out, but tighter immigration controls are expected to promote “British jobs for British people.” In theory, providing highly rewarding careers to locals is a great initiative. 

UK Tech Jobs for UK Citizens (But There Aren’t Many of Them)

Unfortunately, there’s just not enough British technology professionals to fill the existing skills gap. This is evidenced by foreign-born workers making up 18% of the sector’s three million professionals (a third of whom are from the EU).

At the same time, UK tech companies attracted as much as £5.5 billion in foreign investment in the first half of last year, driven by a weaker pound. This record-breaking investment exceeded the amount invested per capita in the US tech sector.

So while these companies now have the resources to hire some of the brightest minds in the business, the competition will continue to be fierce. Furthermore, the government hasn’t done enough to reassure tech leaders that it will make tech migration easier for EU nationals. 

According to the Mind the Gap Report, there’s a massive skills gap in the following areas:

  • Cybersecurity
  • Data 
  • Python
  • Ruby on Rails (RoR)
  • User Experience (UX)
  • User Interface (UI)

The demand for these skills outstrips supply by a significant margin. The need for security engineers, for example, rose by as much as 234% over 18 months. As the UK has to fill over 750,000 digital jobs and train about 2.3 million people to fill the skills gap, questions remain on how this will be achieved.

Another issue with the UK-based software engineering talent is that it’s highly inflexible when it comes to career advancement and learning new technology stacks.

One of the reasons Evolve chose to extend our own development team to Ukraine was a lot of legacy-bound developers in the UK who were stuck behind their stack for years and didn’t really want to “challenge the status quo”. Since our own and custom projects required developers with a good command of new stacks and languages such as data science, fintech, machine learning and so on, we just couldn’t move forward with our development roadmap and got stymied. And then our own search for talented and flexible developers led us to Ukraine where we established an R&D Centre.

Salaries Will Shoot Through the Roof

As demand for tech skills grows by the second, salaries for tech-related roles will skyrocket for the foreseeable future. According to the latest LinkedIn research, as much as 54% of recruiters in the UK stated that salaries on offer had increased. 

Another 43% reported that businesses were forced to give raises to present employees to hold on to them. However, salaries alone might not be enough to attract recruitment targets. 

Even if we had a favourable deal to bring in IT professionals from the EU, for example, it wouldn’t help. The UK has grown less attractive for EU-based job seekers over the last three years, and migration had fallen by as much as 30%. 

The Emergence of Extended Teams

With so much uncertainty and significant barriers to hiring tech talent from across the pond, British firms should consider building extended development teams to meet their targets.

How an Extended Team Model Can Help Improve the Situation?

An extended team can be described as a group of technology professionals who work together on a custom-tailored project development off-premise. This augmented team model aims to fill the skills gap by integrating talented remote software engineers from overseas into the team working in-house.

This approach is different from traditional outsourcing models where you give up all control to your outsourcing services provider (located nearshore or offshore). By building an extended team, companies can retain complete control over project management and milestone delivery.

The key benefit here is to access top talent and achieve your goals by increasing capacity and flexibility, cost-effectively. Your HR department will also be happy that they don’t have to navigate through the complex immigration process.

As demand for top tech talent is expected to surge over the next decade, the government and the private sector need to make a considerable effort to promote STEM (science, technology, engineering, and mathematics) education. 

Until there are more STEM graduates on the island, you can expect the impact of Brexit and the global tech talent shortage to stifle growth within the industry.

Are you thinking of building an extended team for your next project? We can help! Request a call from Evolve to find out more.

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