Tech businesses in the UK are facing a skills crisis in the next few years unless urgent action is taken to allow skilled people from overseas to live and work here post-Brexit.
Employers could also be doing more to encourage talented tech contractors to join their organisations now.
A report by the Coalition for a Digital Policy (Coadec) has called for the introduction of a new visa scheme and has warned that the sector could face a shortfall of around 800,000 jobs by 2020.
This skills shortage could seriously hamper the UK’s tech sector, which has been growing 32% faster than the rest of the economy and accounts for 1.56m jobs, according to the latest Tech Nation study.
Importantly, a skills crisis could also lead the UK to fall behind in some important emerging markets; slowing the pace of innovation in fields such as robotics, artificial intelligence and 5G.
The introduction of a minimum six-month high-skilled visa would provide some reassurance for tech sector employers; guaranteeing access to global talent after the UK exits the EU.
However, existing schemes such as the Tier 2 visa scheme and the Tech Nation visa scheme already provide some support in this area and should be utilised fully.
Coadec is also calling for the Tier 2 scheme to be enhanced to allow employers to offer equity compensation in place of salary, which would help to tie in workers.
Much-publicised reforms to the IR35 intermediary rules, effective from April, could deliver an unexpected boon for the sector and create opportunities for tech employers to secure key staff.
While the reforms have attracted plenty of criticism from off-payroll tech and IT workers in the public sector, many of whom work as ‘contractors’, the net effect of the changes could be to drive them back into the private sector, helping to ease the shortfall for businesses.
Providing employers can offer attractive terms to encourage ‘employment’ rather than ‘contracting’ this would also remove any uncertainty about the tax status of their contracts.
For agile employers that want to make the most of this timely employment push in their direction, there could be opportunities in the short term to secure skilled people on competitive terms.
However, locking these individuals into their businesses could present more of a challenge and there is a risk that they could be drawn to lucrative contracts overseas.
To mitigate this risk, employers must take steps to understand the needs of these highly-skilled workers and adapt their businesses accordingly. Attracting and retaining talented people in a competitive job market requires strategic planning and ingenuity.
Naturally, employees will be attracted to businesses that offer a genuine career path complemented by an attractive remuneration and rewards package.
For millennial workers in particular, flexible terms of employment that make it possible for them to achieve a better work-life balance, are especially important.
As privately-run businesses, employers may also be able to implement a tax-beneficial share incentive scheme, such as an Enterprise Management Incentive (EMI) scheme.
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These schemes can be particularly helpful at locking in talent by giving key workers a chance to share in financial rewards over a specified time period.
Tech sector employers need the support of a government that understands their pain points and is prepared to prioritise access to talent in the forthcoming Brexit negotiations.
However, there is much that tech businesses can be doing for themselves in the meantime to strengthen their employer brand and convert existing contractors or agency workers into direct employees.
Sourced by Andrew Brookes, senior manager and a specialist in employer solutions at accountancy firm, Menzies LLP