We have been talking about the competition for talent since the end of the 90’s, but it has never been as poignant as right now in the tech sector. It is estimated that globally we are missing 85 million tech talents by 2030. In Finland, this number is 130,000 new professionals needed by 2030. The shortage of professionals results in losses of over 8.5 trillion USD globally. Those are some big numbers, huh?
Talent shortage directly links to the following key themes:
1) how companies hire (talent acquisition),
2) how they communicate about themselves as employers (employer branding) and
3) how they plan on keeping the talent (talent retention).
Acquiring new and keeping existing talent should be a key focus for companies, as today, the competition is not only local but global. Remote work and digitalization place healthy pressure for both organisations to win over the tech talent, but also for regions and countries to step up their talent attraction game.
Here at Finders Seekers, we are closely following industry trends from across the world, but also making predictions in areas that are yet to be seen. Here are the 6 trends for tech talent acquisition and employer branding you can expect in 2023.
1. Talent-Driven Market – Branding and Sourcing will become more and more important
- Post and pray works only for those organisations with an incredibly strong brand. However, if the process is not tailored it leads to high numbers of non-quality leads – making it more difficult to maintain good candidate experience, and as a result may hinder your employer image building.
- Specialised recruiters and employer branding professionals with T-shaped profiles will be the most sought-after profiles during the upcoming years in the talent acquisition space.
- A combination of in-house and external help will be the go-to strategy for most organisations with periodic recruitment needs.
Do you remember how recruitment was done some years back? Companies would post a job ad online or in a newspaper and wait for suitable candidates to apply. Those candidates then sent their CVs along with their cover letters for review, and the organisation would then invite the best candidates for interviews. The candidates would sell their skills, persuade the organisation to choose them, and then the organisation would choose the right person for the job, and everyone lived happily ever after.
Nowadays, an organisation working in industries with talent shortages post a job ad online, waits for two weeks, acknowledges that it received 0 applications or only 5 unsuitable ones, and contacts a recruiter to start finding and contacting candidates. Those candidates are sourced and contacted, the position is sold to them. The candidates are invited for a meeting with the organisation, and the organisation will persuade the candidates why they are the right choice for them. Then the candidate will make a decision whether they want to take the job or not.
This is a big paradigm shift in recruitment, and we probably don’t yet fully understand what it means in terms of new ways of recruitment and how we need to build recruitment and employer branding strategies. The first strategy, ”post and pray”, as we call it, only works for companies with an incredibly strong employer brand – a brand that is ideally targeted to the key talent the company needs to achieve its value proposition. Yes, there are those organisations that don’t need to do such heavy headhunting as they regularly receive inbound applications, but there aren’t many. Many of them also receive an abundance of applications that don’t hit the mark with the talent they are looking to attract, especially the ‘hard to attract and convince’ kind of talent segments.
Our prediction is that more and more companies will start investing heavily into their employer brand over the coming years. As the competition gets tougher, and the companies with strong brands find it easier to attract the talent they want, others will follow. We’ve seen this happening in Central Europe and in Nordic high-growth scale-ups already for the past few years.
On top of employer branding investments increasing, we predict that companies will invest more in specialised recruiters and sourcers, be it in-house or external help. You can’t expect your recruiter to excel in both customer success roles as well as hardcore data scientist roles, especially if they need to recruit many different roles per year. The hard-to-get talent is specialised and they need in-depth convincing to enter a recruitment process. The recruiter needs to be immersed in the role that the talent lives and breathes. Talents will trust recruiters when they know that the other party really understands what it is they are looking for in their next career opportunity.
As talent shortage becomes an increasing challenge, sourcing – finding the right talent – and contacting will gain ground, and companies will start investing in either buying headhunting help from external sources or hiring them in-house. However, as recruitment is quite periodic, having a combination strategy with in-house and external recruiters will likely be the way to go for many. It already is a staple in high growth scale-ups who need the flexibility for changing workforce scenarios.
A senior recruiter that has to mostly use headhunting can fill 2-3 roles per month in a sustainable way. This means a recruiter in this environment is able to do maybe 22-30 recruitments per year. If, say, 10 roles are filled with incoming inbound applications (read: powered by employer branding), a recruiter can fill 30-40 recruitments per year. This is why investment in hiring the best recruiters and investing in continuous employer branding matters so much, one offs don’t work in employer branding – omni-channel employer branding tailored to talent needs and consistency are king.
2. Diversified talent & omni-channel employer branding
- If you’re not already doing omni-channel, we will start seeing more companies going omni-channel with employer branding and recruitment – trying different channels both on- and offline.
- Hiring juniors, and building the onboarding and mentoring programs is the key to success.
- Hiring from abroad will continue to increase. There’s always talent out there, the key is to find and attract them.
- Talent strategies will take into consideration the different ways of working, such as freelancing and traditional employment.
As hiring tech talent gets harder and harder, we often tend to think that we just need to try and push more. While partially true, it might lead to a situation where all companies are fighting for the same small pool of talent. This will undoubtedly lead to increase in salary levels, talent staying for a shorter period of time, and financial losses for companies. Our prediction is that successful companies will adopt a diversified and omni-channel talent acquisition strategy.
These companies understand that they need to widen the pool. Yes, there is a shortage of talent in your region, city or country, but there is always talent available globally. This is why successful companies will hire both globally and locally. They understand that in order to build the best products and services, they need to have the best talent onboard, and to find that talent, they will have to widen their pool. Many forward-thinking tech companies have already been doing this for years. Recruiting from abroad and relocating talent has been steadily growing over the past years, and we predict that this trend keeps on growing.
Another interesting, but untapped, potential can be found from remote hiring. This means that the hiring organisation is typically using a third party service provider to hire talent anywhere they can find that talent. This means your team might be located in Cairo, Helsinki, Tunis and Amsterdam. And as we know flexibility is one of the most important job satisfaction factors for tech talent, this is another trend we might start to see increasing.
However, it remains to be seen how this will affect salary competition, when we will have companies from higher salary countries entering the talent markets in lower salary countries.
We recently surveyed European tech companies at TechEX in Amsterdam and found that 90% of companies surveyed (25) had ‘remote first’ or ‘choice first’ as their talent strategy.
This meant that their talent could be located anywhere in the world, and could choose to either work from the office or from home.
Another important aspect of a diversified talent strategy is hiring junior talent. Every senior talent was once a junior. Successful companies don’t only wait for other companies to educate and train their talent, but they have junior programs that are effective at onboarding and training new talent. And if done well, a great employee experience for junior talents will result in longer retention and loyalty to the company, whereas a poor employee experience and poor growth opportunities will result in attrition – and waste the investment of training juniors to more senior roles in the first place. We will also see an influx in different short and longer career shift trainings that will try to bring new talent in the industry.
We believe talent strategies will also include more robust ways of working. When looking at building a winning talent strategy, an organisation will look at different ways of working. The best talent might only be willing to work as freelancers, or conversely only under a traditional employment relationship. An organisation that wants to succeed with their talent strategy will have to accommodate different forms of employment.
3. The rise of VPs of Talent Acquisition
- Talent acquisition is becoming more and more strategic, and influencing business strategies.
- VP of Talent Acquisition will be responsible for talent attraction, employer branding, recruitment and partly for employee experience.
- Talent acquisition budgets will grow as attracting talent gets harder.
An interesting trend from the United States is the growth of VPs of Talent Acquisition. This trend has already been happening for years in the fastest growing tech scale-ups globally. Human Resources entered executive tables and board rooms some years ago, and now we believe it is time for Talent Acquisition to do the same. As attracting and acquiring talent gets harder and harder, recruitment and business will have to collaborate more. Many of these VPs of Talent also have a great understanding of the importance of investing in employer branding and the impact great employee lifecycle management has on ensuring sustainable growth through attracting, growing and retaining talent.
Traditionally talent acquisition has been taking ‘orders’ from business leads, and the resourcing strategies have been formed without talent acquisition’s input, but we believe this is changing. The new way will, and should, be the following: the VP of Talent Acquisition will have a seat in strategy discussions, and they will provide data and input to business leaders. The VP of Talent Acquisition is responsible for talent attraction, employer branding, recruitment and partly for employee experience. The role of Talent Acquisition is to ensure the company’s value creation towards achieving their mission and value proposition for their customers.
An example of this is a situation where the business will decide to open a new data unit which requires recruiting 20 senior data scientists, 40 senior data engineers and re-training another 40 people internally to cater to the needs of this new unit. A VP of Talent Acquisition is able to give important insight on the market, whether this talent is available locally or regionally, and whether the organisation has the right brand to attract this talent. They will work together with HR to understand who the right people for re-training are and how they should be recruited for the project. This intel will help determine whether the chosen strategy is the right one or if it needs modifications based on talent supply.
The VP of Talent Acquisition’s understanding of the availability of talent as well as in what talent segment your employer branding is strongest at will help the organisation formulate a strategy. If the organisation is e.g. really good at attracting cloud architects and advisors, and this talent is widely available, it may help the business find more focus in choosing the correct strategy.
This will also mean that talent acquisition will own and have more (or at least their own) budget to use for more strategic initiatives – also, quite often, a dedicated employer branding budget. Traditionally, the talent acquisition budget is under HR, and very often talent acquisition leads don’t have ownership over this budget. In the worst case scenario, the talent acquisition function is not even allowed to choose the partners it works with, or how the money is spent. With the VP of Talent Acquisition position emerging, talent acquisition will have a budget of its own to be used for different recruitment, talent acquisition and employer branding initiatives.
4. Employer Branding or Talent Branding?
- We will start talking about talent branding instead of employer branding.
- The most effective way to do employer branding is to do talent driven branding that is tailored and based on genuine employee experiences.
- You’re designing the brand experiences for your talent first, not the employer. The employer is the recipient of positive collateral, when the right talent can identify if the employer is/continues to be the right next step for them.
The term employer branding has been popularised for years now. Some call it employment branding or some even mix it up with employee branding (aka employee advocacy) a very different thing by the way. This is oftentimes the case with concepts that, for many, are hazy and ambiguous – they end up having a multitude of different names.
One trend that is becoming more popular is the term talent branding. In essence, it’s a better way to describe the recruitment paradigm shift of how talent looks for and applies to jobs, or rather are seeked out and attracted to new career opportunities these days. Hypergrowth scaleups, like Miro, who understand the talent driven market have Talent Brand teams instead of Employer Branding teams and there are employer branding professional resource groups like the Talent Brand Alliance, which already incorporate the sentiment in their name.
The term employer branding speaks of a time and function that focuses on making the employer attractive, branding and differentiating them. It is still this today, but on the other hand the most effective way to do employer branding is to do talent driven branding that is tailored and based on genuine employee experiences – it creates magnetism for the right talent. Talent branding is adding that mindset shift to the term employer branding.
It is not the me, me, me a.k.a. us, us, us viewpoint but the them, them, them viewpoint. So while employer branding is the term used towards the business, you’re actually designing the brand experiences for the talent so that they can evaluate if this is the right career move for them! Personally, we believe that the holistic talent lifecycle experience is the basis for building a great talent brand – and yes, it does impact the employer image of the company positively!
5. DEI Is (still) a Big Topic
- Diversity, equity and inclusion (DEI) will keep on becoming more and more important for organisations.
- If it’s not there already, it will be on the leadership agenda.
- We will start to see more and more DEI strategies and specialised jobs around DEI.
Yes, this is still on this list, because it deserves to be here. This has been a big trend for some time already, but with generation Z entering the job market, we can see investments growing in DEI, too.
Generation Z was born to a world that is inherently diverse, global and connected. They are all about stories and the reality behind polished images. They will want to see how sexual minorities are treated or how women or non-binary people are progressing to leadership positions. They want to see people of colour in company pictures, and want to know how the company is doing in terms of sustainability and living according to its values. This means organisations are challenged more and more on DEI matters.
But the thing is that it all has to be true. Diversity and inclusion have to be part of the company’s reality and everyday life, not only fancy words or marketing tactics. That is why many companies will conduct DEI audits internally, and focus on hiring talent from diverse backgrounds. They will invest in employee experience and in different employee resource groups that drive the DEI agenda forward. Another staple in European high-growth scale-ups over the past 5 years has been the emergence of DEI roles and teams, even Heads of DEI, as well as DEI goals tied to the company strategy, driven by management.
Unconscious bias training is a norm, but we will see diversity, equity and inclusion becoming a theme that covers every level of an organisation. Companies will set a DEI strategy led by the leadership team, and will use DEI data to guide their strategic decisions. DEI strategy will then guide all processes towards more inclusive and equitable recruitment, career advancement and employee experience programs and processes.
6. Talent Growth Teams – Attracting, Hiring and Retaining the Right Talent
- We are moving from siloed recruitment, marketing and HR towards a talent growth team approach.
- Talent growth teams nurture talent throughout the talent lifecycle–- from attraction to acquisition and retention.
- Talent growth teams consist of talent acquisition, employer branding and employee experience professionals who have shared goals.
One of the trends we see emerging is the birth of talent growth teams. It is becoming essential to nurture talent throughout the talent lifecycle – from attraction to acquisition and retention. Growth teams consist of talent acquisition, employer branding and employee experience professionals who work closely together towards shared goals.
The main goal for employer branding is to provide quality candidate leads and ensure long-term talent pipeline nurturing and engagement. Recruitment requires these quality candidate leads to ensure the company’s growth goals. Through employer branding that is based on genuine employee experience, it creates a boost in employee loyalty, sense of pride, and a reinforced feeling of being on the same mission as the company’s existing employees – which ultimately increases retention.
Traditionally, recruitment, employer branding and HR have been working in their own silos; the recruiter filling open roles, HR taking care of employee experience and employer branding being a part of marketing or done on the side of TA. There are still too many organisations out there that don’t have a dedicated employer branding expert, and even if they do, that person is working separately from talent acquisition, or at least not sharing the same goals.
With growth teams there won’t be such challenges, as all aspects of the talent lifecycle are covered and there is seamless collaboration towards the common goal – stellar experience at every stage of the talent journey.
Interested in finding out more about our Talent Growth Team service?
Send Sofia, Anni, or Vivi a message on LinkedIn or reach out Saku our Chief Growth Officer [email protected]