TALENT ATTRACTION IN THE TECH INDUSTRY 1

Talent attraction in the tech industryWHAT UNIVERSITY STUDENTS LOOK FOR IN FUTURE EMPLOYERS AND THE IMPLICATIONS FOR COMPANIES THAT SEEK TO HIRE THEM.

TALENT INSIGHTS SERIES

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WHAT QUALITIES MATTER MOST IN A NEW EMPLOYER?

IMPLICATIONS FOR EMPLOYERS

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METHODOLOGY

There are few industries in which the search for top talent is as critical – and as difficult – as in the technology industry.

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In the UK, where close to 8 percent of all workers are employed by tech companies, leaders say a shortage of skilled professionals is threatening future growth. And in the US, the President’s Council of Advisors on Science and Technology (published in 2012) predicted a shortage of one million technical workers over the following 10 years.

Language related to the talent gap seemed to reach peak angst in late 2013, when a contributor to the Huffington Post called the situation “economically devastating”.

In recent years, however, some critics have claimed that the shortage of STEM talent has been overhyped. Critics say the talent gap is promoted by

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sure that qualifies as a shortage, any more than my not being able to find a half-priced TV”.

Regardless of whether the shortage is exaggerated or not, it remains true that technology leaders must grapple with complex talent problems unique to the industry, including that: • The talent required to solve

today’s challenges may not be the right set of skills to compete in tomorrow’s technology market. Research shows technology CEOs are in search of talent with a wider range of skill sets – three in four say they are looking for broader skills than in the past, according to PwC’s Global CEO survey.

• The search for specific skills or portfolios of skills is made more difficult in tech because companies must also weigh how high-demand talent wants to work. Millennials are

technology companies eager to relax immigration rules and attract lower-cost talent. In an interview with Businessweek, Hal Salzman, a professor of planning and public policy at Rutgers University, said: “There’s no evidence in any way, shape, or form that there’s a shortage in the conventional sense. They may not be able to find them at the price they want. But I’m not

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more likely than their older colleagues to prefer flexible work arrangements, and many tech workers are embracing free agency and choosing to work as independent contractors. A 2014 Millennial survey from Deloitte found up to 70 percent of graduates would reject traditional businesses to work independently.

• Tech companies are facing pressure from industry observers – particularly in the media – to diversify their ranks of workers and executives. In 2014, Google, Facebook and Apple (among others) released data showing men outnumbered women two to one, and in technology roles the ratio rises to four to one and higher.

• More than any other industry, technology companies feel compelled to offer a creative and generous array of benefits outside of direct compensation – a trend introduced by hip, high-growth startups that we will comment on in greater depth.

What impact do these issues have on technology industry hiring companies? With the Talent Insights Series, Universum aims to uncover what university students are looking for in future technology employers – and how companies can translate these findings into actionable steps for HR, recruiting and C-level leadership.

ABOUT THE TALENT INSIGHTS SERIES

On an annual basis, Universum gathers insights on the career expectations of one million career-seekers from 55 countries, and publishes dozens of reports on the top issues affecting global talent and the companies that hire talent. The Talent Insights Series focuses on students nearing graduation or who have recently finished university. Each report looks at a specific industry from the perspective of a student who seeks to work in that industry (except the first report, which profiles students in the Ivy League and Russell Group schools). To see the list of industries and to get a specific report, click here.

Other related topics: • Millennial study: Understanding a

misunderstood generation • The Future of Employer Branding:

2020 Outlook

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Career goals

5

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WE ARE CONTINUALLY SURPRISED BY THE COMMITMENT OF THE MILLENNIAL GENERATION TO WORK-LIFE BALANCE

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6

65%

37%

56%

50%

44%

57%

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We asked university students planning to work in the technology industry to choose their top three career goals. Overall, the top choice is work-life balance (56 percent choose it), followed by job security and stability (41 percent overall choose it, however students in the US feel more strongly about job security; 53 percent of them pick it).

We are continually surprised by the commitment of the Millennial generation to work-life balance – even in these younger years – and organizations must come to grips with this issue in order to attract and retain talented young professionals. Some companies address it by creating an atmosphere at work that blurs the boundary between professional and personal life. Others offer flexible schedules and related accommodations that help

ease the stress of long work hours or difficult commutes.

When asked whether they prioritize being competitively or intellectually challenged, students’ opinions vary widely by region. Students in the US, for example, are much more likely to choose intellectual or competitive challenges over their peers in the APAC countries. Keep in mind “challenging work” is not a euphemism for long hours. Universum’s Millennial study (Understanding a Misunderstood Generation) also asked respondents about challenging work – and while it was a different study, the answers Millennials shared hold important insights for employers. Forty percent of Millennials define challenging work as being involved in innovative work and learning new things on a daily basis. Just one in 10

define challenging work as having a constant and heavy workload. For Millennials, challenging work is much more about solving complex problems, being intellectually stimulated and working on novel projects – and not about working long hours.

Those seeking work in the technology industry do not differ significantly from their peers in other industries except in two respects: they are much more likely to want to become technical or functional experts (one in three seek it, versus one in four for all other industries). And those working in technology are slightly more likely to desire a job that allows them to be entrepreneurial or creative/innovative. FIGURE 1

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FIGURE 1

WHICH OF THESE CAREER GOALS ARE MOST IMPORTANT TO YOU?

Tech industry versus Others

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0% 10% 20% 30% 40% 50% 60%

To have work/lifebalance

To have aninternational career

To be secure orstable in my job

To be entrepreneurial orcreative/innovative

To be dedicated to a cause or to feelthat I am serving a greater good

To be competitively orintellectually challenged

To be autonomousor independent

To be a technical orfunctional expert

To be a leader ormanager of people

OthersTech industry

25%32%

32%24%

17%16%

28%32%

35%32%

25%28%

56%56%

41%42%

36%34%

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What qualities matter most in a new employer?

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ADOBE HOSTS WHISKEY TASTINGS, SOFTWARE COMPANY ASANA GIVES EMPLOYEES A FEW THOUSAND DOLLARS TO OUTFIT THEIR COMPUTERS

AND WORKSPACES UPON HIRE, AND GOOGLE FAMOUSLY PROVIDES HAUTE CUISINE IN ITS COMPANY CAFETERIAS ACROSS THE GLOBE

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10

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Employer reputation and image

When asked about an employer’s reputation and image, those aiming to work in the technology industry are much more likely to prioritize innovation and the attractiveness of a company’s product/service lines – a finding that makes sense given the industry’s position as an innovation leader. Students in the US prioritize innovation well above any other factor (nearly seven in 10 choose it). Other attributes, such as corporate social responsibility and environmental sustainability, rank fairly low across the board, even though both are often used in employer branding campaigns.

Does this mean employers should emphasize content about innovation in their employer branding messaging? Not necessarily. Universum’s Social Media Stock Index named Iris tracks the social media activity of the 400 largest

companies in the US, logging every single social media post over the last four years. Our analysis looks specifically at how well these companies activate their employer value propositions (EVPs) through social media. What we have found is: (a) certain themes do perform better than others, and these top-performing messages vary by industry; however, (b) execution is as important as topic selection. When employers talk about innovation, is it purely self-promotional chest-thumping? Or does the message offer depth and interest?

GE has a particularly strong employer brand, and the company regularly emphasizes innovation to attract talent. But rather than talk broadly about innovation, GE demonstrates it with a quirky humor that appeals to the target market it’s trying to reach. From its Badass Machines Pinterest board (for those who devour hi-def shots

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of engines and propellers) to its Slo Mo channel on YouTube, GE talks about innovation without ever directly telling you GE is innovative – and that type of masterful messaging is exactly what separates the good employer branding from the great.

Job characteristics, people and culture

We also asked respondents to name the top three characteristics they look for in a future job. Half of respondents point to professional training and development, followed by secure employment and challenging work. Students in the US are much more likely to seek out secure employment, and students in the APAC countries feel more strongly about flexible working conditions than the average. Those in Europe and the US say a variety of assignments is attractive (more

than one third choose it), while APAC values that characteristic little (just 15 percent choose it).

Which specific job characteristics do technology-bound university students find most appealing? More than half want a creative and dynamic work environment (55 percent), followed by a friendly work environment (49 percent). Another important quality is leaders who support young professionals’ development (42 percent choose it).

It’s not surprising that technology companies are upping the ante with creative and unusual perks for employees given these statistics. Witness the advent of a new position inside tech companies: the perks manager. Perks professionals are tasked with creating an environment at work that blurs the boundaries between the professional and the

personal. Adobe hosts whiskey tastings, software company Asana gives employees a few thousand dollars to outfit their computers and workspaces upon hire, and Google famously provides haute cuisine in its company cafeterias across the globe – among many other firms.

The challenge for employers is how to balance the desire for creative, fun workplaces among Millennials with differing tastes for older employees (who may be more interested in getting home to family rather than staying for whiskey tastings and martial arts).

Channels

As technology companies strive to hire talent with a broader skill set, they must ensure their channel strategy accounts for the change. Currently, students’ top three channels for learning about

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potential employers are employer websites (65 percent), social media (60 percent) and career fairs (51 percent). Not surprisingly, tech-bound students are much more likely to use social media to research employers than their peers. Students in the APAC region are even more social-media savvy; 70 percent of those seeking tech industry jobs say they use social media to research employers.

The growing importance of social media should not eclipse the fact that students across the globe still rely heavily on the employer website as an important source of information. Just two years ago, digital media experts were cautioning companies that websites were less relevant because consumers spend so much time on social media. There was pressure

to move communications away from websites (i.e. owned media) and instead focus on networks like Facebook, Twitter and LinkedIn (paid media) to engage with candidates. The oft-repeated mantra was, “feed the social graph”.

But company websites are not dead. Nowhere is this more evident than the employer website. Top companies use it to create a media-rich experience about what it means to be an employee of a specific company, what to expect in a typical day, and profiles of professionals in high-demand roles. Often built as microsites, these are web assets that can offer a 360-degree view of life at work in a way that’s much more comprehensive and informative than is possible using rented space from LinkedIn or Facebook. FIGURE 2

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FIGURE 2

TOP FOUR CHANNELS TO LEARN ABOUT POTENTIAL EMPLOYERS

Tech industry versus others

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Others: 52%Tech industry

Others: 42%Tech industry

Others: 60%Tech industry

Others: 55%Tech industry

Career fairs Employer websites

51% 65%

Job boards Social media

43% 60%

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Implications for employers

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SPENDING ON CORPORATE TRAINING IN THE US ROSE 15 PERCENT IN 2013 –

THE HIGHEST GROWTH RATE IN SEVEN YEARS.

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Attracting tomorrow’s workforce

Among the top challenges for technology companies is to anticipate talent needs for the future while serving today’s talent requirements. What new skills will companies require in three years? What regions of the globe will become ‘hot spots’ of talent shortages? And in what areas can a company plan for growth based on available talent?

To meet these needs, technology companies are increasingly partnering with governments to solve talent challenges. In fact, US CEOs say finding a skilled and adaptable workforce is the top consideration governments should focus on – ahead even of building more efficient tax systems. And 42 percent of CEOs say they are focused on collaborating with

governments in the areas in which they operate to support greater movement of skilled labor between markets.

Accessing a broader talent set

As mentioned earlier, employers will need to diversify the channels they use – and specifically, become more sophisticated users of digital channels – to identify and attract a more diverse base of talent.

Channel strategy can be an exceedingly complex equation. It must account for the ways in which students from different regions consume information, the growing importance of digital channels and the waning relevance of certain print channels. What’s more, global organizations must ensure that messages are localized to the language, culture and mores of distinct countries – all while

preserving an integrated voice, look and feel among countries.

But closing the talent gap will not come only from attracting new candidates.

Employers must also continue to invest in training and development to bring new skills to talent already on board. Spending on corporate training in the US rose 15 percent in 2013 – the highest growth rate in seven years. For technology companies, the investment in learning is even higher. A study by Deloitte found on average US companies spend US$1,169 per corporate “learner”, versus US$1,847 per learner for technology companies. The study details how technology companies like Motorola Solutions, Adobe, IBM, and Xerox are making large investments in learning and development in order to transition

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Equipping HR to meet the challenge

If tech companies are to diversify their attraction and recruiting channels, and rely more on digital strategies, they must ensure HR and recruiting staff are armed with the right tools and skills to make it happen.

To begin with, organizations must clarify which individual or team has primary responsibility for employer branding. In Universum’s research study of the topic (State of Employer Branding), we demonstrated that CEOs, talent leaders and marketing leaders each think very differently about who owns employer branding. (Sixty percent of CEOs say CEOs own employer branding, while just 32 percent of CEOs feel the role is owned by HR. But 58 percent of HR executives, 63 percent of talent acquisition executives and 57 percent of recruiting executives

say HR owns employer branding.) This degree of misalignment simply isn’t acceptable and should be a priority for firms to define and delineate within their organizations.

Beyond the question of ownership, organizations must also foster greater collaboration between marketing and HR. Tech company marketers in the last five years have become digital media savants – they understand with ever-greater sophistication how to engage through social media, how to publish relevant content customers want to read, and how to deploy technology to make their demand generation strategies more efficient and more effective. These are all skills that are in high demand within HR and recruiting organizations, and companies would be well served to ensure knowledge from the marketing and branding team permeates the talent arena.

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from product selling to solution selling (which includes consulting fees). And other technology companies are also investing heavily in employee education to help capitalize on new opportunities in consumer electronics, Big Data and cyber-security, among other market niches.

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The Talent Insights Series is only a small selection of questions from the larger Universum Talent Survey. We explore in depth the career expectations of talent by asking them to evaluate their chosen employers based on four drivers of employer attractiveness: employer reputation and image, people and culture, job characteristics, remuneration and advancement opportunities. To get insights on your employer brand and understand how you compete with other employers, contact us.

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METHODOLOGY HOME

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ABOUT THIS REPORT

The tech report is based on all students studying Engineering and IT who’ve chosen software and computer services, technology hardware and equipment, telecommunication and networks within their preferred industries. Global averages were calculated by taking the simple average of the percentage of students in each country who selected each option on the survey. Although Universum conducts research in 55 markets, this report covers only 13 markets. If you would like to learn more about tech talent within your market, please contact us.

COUNTRIES TECH OTHERS

Finland 772 896

France 2057 6342

Germany 1369 3096

Hong Kong 97 286

Indonesia 1316 2603

Ireland 258 253

Malaysia 730 1920

Mexico 2379 4773

Singapore 310 1653

Sweden 1971 3274

Switzerland 294 547

UK 580 1288

USA 2464 4989

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METHODOLOGY

2,200 educational institutions

Field period: Sept 2014 to March 2015

Total number of respondents in the 2015 survey: 1,000,000

ABOUT THE UNIVERSUM TALENT SURVEYBased on an exclusive survey, distributed via university and alumni contacts, the Universum Panel and local partners; Universum ensures the quality and validity of the end result by continuously maintaining a close dialogue with leading academics in the field. Our vast experience in the field and cooperation with leading professors from top universities enable us to stay at the front line of the development of employer branding. Our findings are also used all over the world as material for new research.

THE QUESTIONNAIRE

Created based on more than 25 years of experience, extensive research within HR, focus groups and communication with both our clients and talent. Global perspective – local insight.

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