Companies that pride themselves on customer-centricity demonstrated superior performance in 2020 and that momentum continued throughout the first half of 2020. As the tech industry continues to evolve, companies must pay attention to a number of emerging tech industry trends if they want to maintain their competitive advantage:
- There is a continued transition toward “digital by default” workplaces, as the majority of tech companies (and companies across all industries) are not expecting to return to the office at the same levels experienced prior to the pandemic
- Customer preferences have changed, forcing shifts in business models, customer engagement strategies, and product/service mixes, with market leaders quickly adapting to meet customer demand
- Cloud and e-commerce is the way forward, leaving legacy tech companies to rethink service delivery strategies and skill & capability gaps
- There are increased regulatory hurdles and significant legal challenges that may reshape the tech landscape for years to come
The culmination of these factors has had — and will continue to have — a marked impact on the type of talent required to succeed in the industry. Mercer’s 2020–2021 Global Talent Trends Study reveals that tech employers are struggling to balance the dual pressures of attracting the “best fit” talent while scaling to meet accelerated growth targets.
What factors are driving changes to talent priorities for tech employers?
Companies are experiencing accelerated growth but are struggling to adapt to the speed. According to the Talent Trends survey, tech companies are 8x more likely than the all industry average to expect their 2021 revenue to increase in excess of 30%. However, 58% of tech employees feel there are too many priorities, which are distracting people — 1.3x higher than the all industry average.
As a result, the employee experience has changed and employers must respond. The most heavily impacted areas of the employee experience are:
- Managing and coaching employees (74%)
- Flexible working (72%)
- Building culture (67%)
- Onboarding (65%)
Market leaders have responded with alacrity and are reshaping the talent landscape and employee experience within their organizations.
Leading tech employers are creating a trust-based (e.g., promoting psychological safety, encouraging self-forming teams) and high-performing employee experience. Almost all survey respondents (93%) are enhancing flexible working policies and practices, while 86% are moving toward a more asynchronous work environment. More than three-quarters (77%) are engaging employees to uncover preferences (benefits, talent management, etc.) that are most relevant to employee personas and are refocusing diversity, equity, and inclusion efforts accordingly.
The survey also revealed that:
- Tech employers were 1.5x more likely than the all industry average to evaluate the impact of workforce transformation/rightsizing as a way of assessing the impact on DE&I goals
- Tech employers were 1.4x more likely than the all industry average to examine how the COVID-19 pandemic impacted diverse employees in order to inform future workforce strategies
- 86% of respondents are increasing visibility for specific populations through networking/ mentoring activities while continuing to support employee welfare and wellbeing.
In addition, 84% of respondents are increasing alignment between HR processes/policies and culture and more than half of respondents (56%) are adding benefits to address mental or emotional health issues. Tech employers are also 1.5x more likely than the all industry average to provide training to managers on how to spot mental health issues.
Moving forward, successful tech employers plan on harnessing the power of a remote, and increasingly diverse, workforce.
To accomplish this, organizations are identifying and developing competencies that enable distributed working, such as:
- Adaptability/growth mindset
- Self-management/ prioritization
- Inclusive, empathetic management
Additionally, the survey revealed that tech employers are evolving talent management and talent development strategies to meet the needs of a hybrid workforce. For example, 3 in 4 tech employers have made it easier to (or plan to) loan and/or share talent internally. They are also are 1.5x more likely than the all industry average to embrace virtual strategies for internships, job shadowing, mentorships, and 1.3x more likely to adopt skills-based talent strategies, such as pay-for-skills.
What does this mean for tech industry trends?
Demand for cloud capabilities, streaming services, gaming, etc. has exploded, driving significant growth that is testing companies’ ability to scale at speed.
Successful companies must embrace new ways of working (i.e., digital-first operations) and develop flexible working models, processes and polices that enable asynchronous, virtual work.
Tech employers are evolving their employee experience, rewarding innovative talent and incentivizing digital skill development, increasing focus on well-being & inclusion and establishing a seamless digital workplace.
As tech employers think about how they will support an increasingly distributed workforce, they must also consider how they will modify their benefits and perquisites (i.e., dry cleaning/laundry on site, onsite clinics) so that there is a clear employee value proposition, no matter where one might work.
To enable agility and innovation, companies are reconfiguring themselves, moving to flatter organizational structures and leveraging success metrics and incentives in order to drive sustained changes in behavior.