Bolstered by a period of rapid digital transformation during the COVID-19 pandemic that saw its most successful year to date, the UK’s tech sector now has a valuation of over $1 trillion. But questions are now arising around the resilience of that sector in the face of a potential recession at the end of the year.
In response to the current and predicted future economic environment, 83% of tech leaders say they are concerned about recession in Q4, with 37% believing that the economic climate is the biggest threat to their business, followed by staff retention. Despite this 59% still state they are optimistic about scaling and growth in 2023.
Signs of Resilience in the IT, Tech & Digital Sectors
Earlier this year, Gartner forecast a rise in worldwide IT expenditure of 3%, to $4.5 trillion. Whilst this indicates a slowing pace of growth it is still representative of a resilient market. Expenditure on devices was reduced by 5% but IT spend on software grew by 9.6% and IT services by 6.2%. The overall IT spend into 2023 is likely to grow by 6.1%.
The increased cost of living means that employees need and are expecting to be paid a greater amount in order to maintain a comparable standard of living. This can be considered an investment as it costs more to hire and train new employees than to provide training and other career advancements to existing ones.
With new talent becoming increasingly expensive to hire and train, staff retention is high on the agenda for most tech businesses in the UK.
As Steven Jagger, Founder and Director of UK Tech, Digital, and Business Change recruitment agency explains:
“A recession shouldn’t impact staff turnover or retention if your culture is right. Leaders should revamp their culture if they want to weather the trouble ahead.
“Companies need to go the extra mile to attract and retain candidates if they want to hit their hiring aspirations, stay ahead of their competitors, and weather the incoming storm.”
A recession can damage employee morale and health, especially if they have concerns about their jobs, financial security, impact on family, and greater workloads. Businesses can step up and show genuine care and compassion for their people by providing additional support in numerous ways, be it by communicating regularly or via practical help such as offering financial assistance, access to wellbeing and health services, or flexible working schemes to reduce stress.
These actions can ensure employees feel valued, secure, and looked after during what can be a very heavy and stressful period of time.
Whilst the pandemic hit businesses hard, many were able to thrive due to agile thinking, flexibility, and adaptation to the climate. Businesses should be looking at the recession in the same way and finding opportunities in the economic climate to stand out from competitors.
If you’re looking to scale your teams in Q4 ready to hit the ground running in 2023, get in touch today to find out how Maxwell Bond can help you pipeline hires, attract the top talent, and position yourself as an employer of choice.
Maxwell Bond provides award winning perm and contract staffing solutions, free salary banding guides, bespoke market intel, and access to their industry leading recruitment marketing suite to ensure you are ahead of the curve.
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