Despite economic turmoil, UK tech spend grows at its third fastest rate in over 15 years

Shortage of cyber talent continues to be a significant issue for digital leaders – Cyber continues to be one of the most sought after technology skills in the UK. A DCMS report in 2021[1] found that the UK’s cyber security recruitment pool has a shortfall of 10,000 people a year. This shortage and the increasing cyber threat has left only a third (32%) of digital leaders in the UK feeling confident they have all reasonable risks covered.

The war for talent, and keeping pay demands reasonable, emerges as a big challenge - 68% of digital leaders in the UK state that a skills shortage prevents them from keeping up with the pace of change; the largest proportion ever recorded. 57% think that UK organisations will never have enough technology staff and almost two thirds (63%) feel that the rising cost of living has made salary demands unsustainable.

Government policies aren’t working on tech skills - A staggering 78% of digital leaders in the UK feel that government’s policies are completely ineffective at tackling the tech skills shortage. This compares unfavourably to Asia where the figure is almost half, at 41%.

Robots, a way to plug the gap in the tech talent market - On average, digital leaders in the UK plan to use digital labour to automate around 1 in 7 (14%) of their workforce over the next five years.

Hybrid/Remote working boosts women in tech and access to global talent – Hybrid working is now commonplace in tech, with 2 to 3 days a week in the office the average requirement. This is starting to help have a positive impact on the number of women in the UK’s tech sector: female leaders are up to 15% in the UK (from 12% in 2021), almost a quarter (23%) of the tech team is now female, and 27% of new hires in the last two years have been women. The pipeline is slowly but surely improving. The report also found that a quarter (25%) of digital leaders say that remote working has enabled them to start recruiting talent from overseas.

With investment intentions remaining high and 56% of organisations in the UK expecting to increase their technology headcount in 2023 against a backdrop of widespread skills shortages, Bev White, CEO of Nash Squared, added: 

Sustainability needs a reboot

Sustainability in tech was expected to play a greater role this year, but little has changed. A fifth of digital leaders in the UK (20%) think sustainability has only a negligible or no part to play in 2022, and only a similar number (22%) are using technology to measure their carbon footprint to any great extent. The report asks whether digital leaders have their heads firmly in the sand - or is the board not focusing them on this? Does the move to the cloud mean that organisations are viewing energy usage in running tech as somebody else’s (the cloud provider’s) problem?

Realising the potential of data

One of the other challenges highlighted by the report is realising the potential from data. Although two-thirds (67%) of digital leaders in the UK think that big data and analytics will be in the top two technologies to deliver competitive advantage in the next year, only a fifth (22%) feel that they are ’very’ or ‘extremely’ effective at using data insights to generate more revenue. Both figures are down compared to last year’s report, suggesting that ‘Big Data’ is getting bigger in all senses of the word, including its complexity. Another challenge is getting the right skills, with 42% of digital leaders in the UK hampered by a skills shortage in this area.

Making remote and hybrid working work

• Productivity down - While four in ten report an increase in productivity from hybrid working, this is in decline from last year’s results where half of digital leaders saw a boost.

• Mental wellness rises - Already considered to have been made worse by hybrid working, mental wellness remains an issue, but digital leaders report that it has marginally improved in the UK compared to last year.

Remote and hybrid working models rapidly deployed during the pandemic are here to stay, and although a much-improved work/life balance for the tech team is the biggest gain from hybrid working (68% of digital leaders in the UK reporting an improvement), it seems that the good news story around hybrid working has become more complicated:

Bev White, CEO of Nash Squared concluded: