How to Prevent Talent Shortage in European Tech Startups?
In brief
- Why are employers facing major recruitment challenges when the European workforce is the most educated in history?
- Like the UK, Sweden, or Germany, European countries have greater difficulties in attracting and hiring skilled workers. The European tech industry is seeing rapid growth and, as a result, is experiencing a skills shortage.
- The talent market is global. Many European tech startups will compete for the best talents.
- Startups can prevent talent shortage using smart hiring by upskilling and reskilling an in-house talent team and hiring across borders.
Talent Shortage
As Europe continues to recover from a prolonged and expensive economic crisis, four out of ten European Union (EU) startups report difficulty seeking qualified workers.
Skill shortages typically manifest as startups’ inability to fill open positions in a reasonable amount of time at current wages and working conditions in the tech industry due to an inability to find employees with the desired digital skillset like AI. We’ve known for a while now that there’s a tech talent shortage. But that shortage maybe even bigger than you’d expected.
Technology underpins all other sectors of the global economy, but its progress may be slow by severe skill shortages. According to a new Korn Ferry report of 1,500 leaders around the world:
By 2030, the UK will fail to realize almost 9% of technology, media, and telecommunications (TMT) sector potential revenue due to skills shortages. Technology, media, and telecommunications labor deficit. … By 2030, the TMT sector is expected to account for almost 10% of the US economy, and massive growth is forecast across all the world’s markets.
The Nordic countries, for example, face a shortage of about 70,000 engineering employees by 2022.
Sweden’s tech skills shortage became so severe in 2016 that the co-founders of Spotify, the Swedish music streaming giant, petitioned the Swedish government to implement serious change.
The Norwegian government anticipates a deficit of at least 4,000 experts in the sector by 2030.
Finnish employers are also struggling to find tech professionals, especially engineers. Despite the country’s comparatively large number of unemployed engineers (4,000), the shortage persists due to an abilities mismatch. According to the Finnish Union of Professional Engineers, people who graduated 15 years ago may not really have skills that meet the needs of today’s working environment.
Germany needs 260,000 immigrants a year to meet labour demand. According to the Bertelsmann Foundation’s report, 146,000 people will need to immigrate from non-EU member countries each year.
Many people, like me, have been discussing how the European tech scene is expanding. According to the State of European tech report, overall investment in the European tech ecosystem is expected to reach a new high of €33.81 billion.
European technology is seeing rapid growth and, as a result, is experiencing a skills shortage.
It’s easy to imagine that as the demand for technology grows, the gap will widen even further. Could a lack of talent slow the digital revolution? By 2030, a 4.3 million worker labor skills deficit and an unrealized output of $449.70 billion.
Global Market
Another phenomenon that we can see in the European Tech ecosystem, facilitated primarily by the growth of cross-border recruiting, is an increase in pay for tech jobs. As things currently stand, EU wages are considerably lower than US salaries, causing the best talent to gravitate toward US firms.
Now that European tech employees can work remotely for Silicon Valley startups, European tech companies would be forced to increase their pay packages or risk losing talent.
To the extent that such vacancies reflect skill shortages, which have adverse consequences for the productivity and competitiveness of European enterprises, EU vocational education and training policies need to address the source.
However, European policies will help to foster a mechanism of social dialogue between education and training providers and market actors. They must provide the necessary incentives and structural structures to ensure that our European tools for education and training are effective. But that’s another story.
The talent market is global. Many startups will compete with you for your best talent.
Unlock Access To The Best Talent
When truly connected to a shortage of high skill, talent bottlenecks are a sign of a firm’s competitive approach to innovation-intensive startups strategies, which will constrain organizational performance and success.
If European tech startups want to continue their exponential growth pace, the talent shortage must be addressed. The are three ways for tackling skill gaps within a startup organization:
Smart hiring. To have fewer problems recruiting skilled workers, a talent-management strategy is predicated on broadening the pool of potential applicants and improving the internal talent pipeline, what I call “Smart hiring”. We assist startups in developing an effective Smart hiring process. Investing in a great in-house recruiter early on is a great idea for entrepreneurs and startup founders, but many don’t know where to start. We help them implement the best practices, from how they find talent to managing career progression. It’s a great challenge.
Upskilling and reskilling. Training, training, training. European tech startups must commit to providing high-quality apprenticeship opportunities and good-quality training, investing in a great in-house talent team. When people learn to acquire the skills they need at a convenient time, at a rate that is convenient for them, that’s having a major effect on the ability to develop skills. Developing digital capabilities leads to award-winning performances.
Hiring across borders. Hiring remote workers living somewhere else or hiring foreign workers and relocating them. When remote work is established permanently, there is the possibility of expanding the opportunities to get the best talent by expanding borders outside the company’s location and overcoming the geographical barrier to really hire the right staff. Great talent can be found worldwide, and diversity can be a game-changer.
Thanks for reading. I hope you found this article useful.
