Those in the recruitment sector that serve the STEM (“Science, technology, engineering, and maths) market segments are, it seems, at the ideal juncture of opportunity as we move into 2022. The engineering and IT recruitment sector businesses are a significant part of the total UK recruitment market. According to the 2018/19 Talint Report, engineering and IT recruitment agencies represent 12.8% and 22.6% of all agencies in the UK market.
UK: “UNBOXED”
These are parts of the economy being lauded and celebrated by policymakers. For example, in the UK, 2022 will see a nationwide series of events under the “Unboxed: Creativity in the UK” brand (formerly known as Festival 2022). It is a £120million Government-backed celebration of ingenuity and will seek inspiration from the arts and, of course, science, engineering, technology and maths.
Engineers and technical experts will be needed for the Prime Minister’s much-vaunted “Build Back Better” roadmap, which he announced back in June 2020 and added that “…this moment also gives us a much greater chance to be radical and to do things differently… to build back better.”
GLOBAL INVESTMENT INCREASES
Globally the year ahead is likely to see eye-watering investments across infrastructure and information technology. According to the The Economist (“the World Ahead in 2022”), US President Joe Biden’s $1trillion infrastructure programme should boost America’s economy in 2022. Globally, infrastructure investment is expected to rise by 6% to $25 trillion.
The central importance of technology (think remote working etc.) has undoubtedly never been more ubiquitous in business circles, and The Economist predicts that the global IT market will grow by 4% in 2022. Gartner, the research firm, suggests software aimed at businesses is set to grow fastest (12%), and there is a predicted increase in spending on cyber-security by Governments. For instance, the US Government has set aside some $9.8bn for cyber security in 2022.
POSITIVE SENTIMENTS FROM RECRUITMENT LEADERS
After the unprecedented challenges of 2020, little wonder that there have been a plethora of positive pronouncements from leading recruiters in the tech and engineering space.
In its latest Annual Report, Gattaca, the AIM-listed group that delivers across 8 markets within STEM, spoke positively about the prospects for the future following an organisational restructure in October 2020.
In the words of Chairman, Patrick Shanley
“By mid-year, there were early signs of recovery, and the market for STEM skills had rebounded. It is not back to the pre-pandemic levels as there are several key markets where the recovery is slower than others, but it is moving in the right direction.”
In the technology sector, Harvey Nash Group produced its 2021 Digital Leadership Report (“the Harvey Nash Report”), which was originally launched in 1998. It drew insight from a survey of over 2100 digital leaders, which took place between 8th July and 11th October 2021 across 87 countries. One of its key findings was that the number of digital leaders planning to increase both headcount and technology investment had reached record levels in the UK market, rising by over a third since 2020.
Bev White, CEO of Harvey Nash Group, commented on the report:
“With businesses planning record levels of digital investment, we could be standing on the verge of a ‘second renaissance’ for technology. Organizations are looking to push their digital transformations further and faster than ever before, putting technology at the very heart of how they operate.”
Elsewhere, SThree, the listed recruiter of the seven niche recruitment brands focusing on STEM, issued its Q3 Trading Update on 13th September 2021, covering the period 1st June 2021 to 31st August 2021.
The update revealed that group net fees for Q3 were up 29% year on year and CEO, Marc Dorman added that:
“The momentum in our performance from the start of the financial year has continued through the third quarter with net fees up 11% on 2019. Our strategy, positioned at the centre of the secular trends of STEM and flexible working, alongside a strengthening staffing market, has contributed to this strong performance.
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FACING SECTOR CHALLENGES
Notwithstanding the positivity unveiled by the above, there are some seemingly perennial challenges within the STEM segment of the economy that demand creative engagement from clients candidates and, of course, recruiters.
Skills shortages
Perhaps the most immediately visible is the extent of skill shortages in these markets.
Morson Group (lead by the well-known and widely respected Ged Mason) has commented that “The UK went into the pandemic with a skills shortage and we’re coming out of it with an even bigger one.”
The report from Harvey Nash Group referred to above within the technology space reiterates the extent of the skills shortages. It found that Two-thirds (66%) of digital leaders in the UK are now unable to keep pace with change because of a dearth of the talent they need. It added that the shortages in cyber security, for example, were the highest ever, jumping by more than a third in the course of the year. As worrying is the finding that 8 in 10 digital leaders state that post-pandemic new life priorities amongst staff are making retention more challenging.
In the words of Bev White, Harvey Nash Group CEO, tech businesses may be facing a “triple whammy”:
“They lack the supply of skilled resource they need; they have not yet evolved a new and effective employee proposition for the hybrid working world; and the skills they need are themselves changing as technology develops at pace. Digital leaders need to rapidly assess their needs and find solutions if their plans are not to be derailed by this potent cocktail of challenges.”
This is confirmed by David Thuillier, CEO at Montreal Associates, who affirms that “In the tech sector the war for talent has truly resumed this year. There is a talent shortage in most of the vertical technology markets we focus on and has required us to increase our focus on candidate relationship.”
The shortages within the STEM markets are, of course, part of a much broader challenge of a global labour market driven by demographic and disease (Covid) determinants. This has led to millions in the US and UK leaving the workforce. In the UK, the Institute of Employment Studies estimates they are now approaching a million fewer people in the workforce than there would have been had pre-pandemic trends continued.
Diversity
There has been a long-standing under-representation of women within STEM segments of the economy.
Gattaca Plc, for example, cites the briefing from Engineering UK 2018 (“Gender Disparity in engineering”), which reveals that only 12.7% of all engineers are women in the UK and less than half (46.4%) of girls aged 11-14 would consider a career in engineering compared to over 70% for boys.
The Harvey Nash Group Report 2021 referred to above does show that slightly more of the digital leaders surveyed (12%) identified as female but adds that “…the figures continue their painfully slow journey upward.”
Wellness
There are also a number of broader challenges that recruiters and businesses in the STEM factor must tackle, and one of the most urgent is the wellness and wellbeing of workers who have been working remotely and now (in most cases) are adjusting to a hybrid model combining home and office-based working
In personal discussions with several CEOs (as part of the preparation for this article), it is clear that while there are no easy answers, much great work is being undertaken within the sector on the issue of wellness.
David Thuillier, CEO at Montreal Associates, for example says, it is a continual journey (“we are still learning every day, exploring ways to support inclusion and belonging”) and adds that they have invested in bespoke programmers to support wellness: “…we have organized regular events with expert speakers to educate and raise awareness; 6% of our staff have now received Mental Health First Aid training”.
James Fernandes, CEO at Carrington West, also confirms that “having trained mental health first aiders or managers who were able to spot potential issues even over video calls was a definite plus for us and helped us support our staff through some very lonely and difficult times.”
Bev White is proud of the major initiatives across the Harvy Nash Group to support wellness: “We launched the Wellbeing Hub offering a wide range of online classes and advice to help improve and maintain physical and mental health. Importantly we made it “open source” so it is available publicly too.”
There is also wider opportunity flowing from the wellness challenge, including many new job roles that technologists have reported are being created driven by the need for human interaction and wellbeing, including Happiness Officer!
The Harvey Nash Report also found that 49% of digital leaders have increased their investment in health and wellbeing programmes.
FAVOURABLE FUNDAMENTALS.
As we have seen above, there are significant levels of growth in investment expected across information technology and infrastructure in the year ahead.
Strategically technology leaders are set to play a crucial role in businesses globally. McKinsey and Company, in its 1st November 2021 article (“The CIO Agenda for the Next 12 months”), make this point forcefully: “Detailed conversations with dozens of CIOs and CEOs over the past year as well as analysis of recent research have highlighted how the IT mission is both changing and needs to change.”
They add a further insight with potentially profound implications for technology recruiters:
“Great tech talent can have the largest impact on a business’s ability to generate value. Recent research shows that changes to people and talent strategies are among the highest-value moves companies can make”
The opportunity for recruitment leaders across the STEM landscape is a theme that stood out from my discussions with CEOs in November.
David Thuillier, for example, comments that “Our clients are as demanding as ever of course, but I think many of our clients need support in developing employer brands that meet new candidate expectations in a candidate shortage market.”
James Fernandes adds, “There are many growth opportunities for us due to continued investment into our core sectors: transport and infrastructure utilities and rail. And we have taken on more of a trusted advisory role with our clients.”
Bev White confirms this potential for an ever wider role for recruitment businesses with clients:
“Clients are increasingly looking for more sophisticated ways to build their technology capability. So they are talking less about purely “recruitment,” and much more about we can help them solve problems on a wider basis.”
Given the global uncertainties over supply chains (including the complex multifaceted issue of labor shortages), the threat of rising inflation, the need to adjust to the environmental and equality and diversity landscape and the imperative to offer opportunities to workers (permanent and temporary) that meet their needs for meaning purpose and wellbeing; it is likely that recruitment businesses clients will need the very best advice they can secure!
A special note of thanks for the time and insights shared in personal discussions in preparation for this article to Bev White (CEO at Harvey Nash Group), James Fernandes (CEO at Carrington West) and David Thuillier (CEO at Montreal Associates).
