Not so grim up north, says software stalwart Sage

The north-south divide is opening up again, as unemployment hits hardest outside London. But firms like Sage in Newcastle prove there's life in the regions yet.

by Elizabeth Anderson
Last Updated: 17 Nov 2011
The latest unemployment figures show that the number of people out of work now stands at 8.3% of the working population - the highest rate since 1996. But in the North East it’s far higher - 11.6% are unemployed, almost double the 6.3% unemployed in the South East. The number of people out of work in the region rose by 20,000 in the last three months.

Once a major industrial hotspot, the North East’s manufacturing status has declined over the last 40 years as production moves east to take advantage of low wage emerging economies. And as a result of many subsequent years of government regeneration plans, it also has a heavy concentration of public sector workers, who were hit hard by the spending cuts this year.

Nevertheless, the private sector is still holding its own: the region is home to some big businesses, including transport group Arriva, bakery chain Greggs and of course accountancy and CRM software specialist Sage - one of Newcastle’s biggest employers, with 1,613 staff at its headquarters in North Park.

Sage, celebrating its 30th birthday this month, is a genuine home grown Tyneside success story, founded in the Toon in 1981 by three local entrepreneurs. And despite growing to a £3.5bn company with more than six million customers globally - it operates in 24 countries – Sage’s headquarters have remained firmly in its North East homeland.

‘Had Sage been founded it London, it would not be the business it is today,’ David Clayton, director of strategy and corporate development, said on a recent tour of the firm’s HQ. ‘It actually benefitted us being away from the capital where there were lots of other companies doing similar things. Here we were able to build a distinct brand. We’ve also got some extremely good talent in Newcastle.’  

Within those grim unemployment stats lies another grimmer truth – that young people are bearing the brunt. Youth unemployment has just hit the million mark. Firms like Sage have a vital role to play in tackling this issue, offering as it does genuine career progression. From starter jobs in its contact centre, where 500 staff field 7,500 calls a day from customers, Sage can provide ambitious and capable school-leavers a real chance to climb the ladder. And the same is true of those leaving higher education – the firm has close links with local colleges and Universities and sources many skilled programmers and developers that way. No wonder demand is high. For 12 positions in the contact centre this year, Sage had 356 applications; for one developer role, more than 100 people applied. An apprentice scheme is under consideration.

But it’s not just locals who want to work for Sage. Sophia, a 27 year old, joined Sage six weeks ago after moving from Manchester: ‘There were three of us in the group interview and none of us were from Newcastle,’ she said. ‘I have quite a specialist job. I recently got married and needed to move up here but one of my major concerns was the narrow range of job opportunities here.’

Jonathan, another new employee, agreed: ‘I spent the last 13 years working in London. I’m originally from Sunderland and wanted to come back to the North East but employment opportunities here are very limited, especially if you want to work for a large corporation. It took two years for an opening to come up at Sage’

But wherever they come from, new employees are welcome. Kevin Rowland, head of the TUC in the North East, says: ‘Employment generates income. We welcome people relocating here. It shows the North East is a good place to work.’ Sage’s Clayton – who lives in London but commutes regularly to Newcastle - agrees: ‘We’re a big supporter of the region simply by being a big employer.’

And Sage must be doing something right – its software makes sure that a quarter of UK employees’ get the right pay on the right day, and there are Sage customers in every postcode in the UK.

As public spending cuts continue to hit regions like Tyneside harder than elsewhere, the role of dynamic private sector employees like Sage in their local economies will only get bigger. ‘There isn’t any other comparable employer to Sage in the North East. It has a global reach but chooses to be based in Newcastle. That should give confidence to other businesses and show there is a good skill set here,’ Rowland says.

Find this article useful?

Get more great articles like this in your inbox every lunchtime

Subscribe

Get your essential reading delivered. Subscribe to Management Today