Six figure salaries and hounding recruiters: The war for London's tech talent

Companies are fighting over a shortage of top software developers in the capital.

by Rachel Savage
Last Updated: 16 Feb 2017

Last month, an experienced software engineer in London decided it was time to change jobs - his company was struggling and no one wants to stay on board a sinking ship. He accidentally made his CV public on a jobsite. By 10.30 that morning he’d had no fewer than 72 calls from recruiters and had agreed to six interviews.

‘That’s mad,’ says David Kerr, the 73rd recruiter to call (but one of the few the harassed developer actually picked up on). ‘If the market carries on like it is, it’s going to become a war.’

Some would say it already is. A shortage of top-drawer tech talent is already biting in the capital, as companies fight to find, hire and retain the best staff.

‘Companies are poaching from each other - even companies who are in the same portfolio with VCs [venture capital firms], because there’s such a limited pool,’ says Divinia Knowles, the president and CFO of children’s gaming company Mind Candy.

‘We recently have struggled quite a lot to find mobile developers, [therefore] you can’t move as fast as you want to, you have push back launches,’ she explains. ‘So it does actually affect your business, your revenue and what you’re trying to achieve.’

Mind Candy's offices bringing out the inner child.

In 2008, as the financial crisis started, a graduate software developer in a ‘mainstream language’ (Java, C#, C++) could expect a £25,000-£28,000 basic starting salary, according to data gathered by Client Server, the company Kerr co-founded in 1999. Outside finance they can now command up to £40,000, while banks are splashing out as much as £50,000 a year before bonuses on grads fresh from the country’s top computer science courses. Team leads are pushing six figures.

Current salary growth looks relatively modest at first glance. In the first quarter of this year, developer salaries in London rose 1.5-2.2% annually, according to research firm CEB, although wages for IT service roles increased 2-5.7%.

But that obscures the ever-increasing demand for rare or ‘fashionable’ skills. To give just one example, javascript developer salaries have surged 6.25% in the last year, according to IT Jobs Watch. ‘We’re seeing people being paid 70, 80, 90,000 basic salaries… which is breaking records,’ says Kerr. ‘The contract market has exploded in that discipline.’

Of course, pay is only one measure of how piping hot the market is. Wanted Technologies, a recruitment analytics firm, puts the difficulty of hiring a java developer in London at 90, on a scale of 0 to 100, versus 81 in the UK as a whole. Compared to other large European and American cities, only San Francisco is as high (although it has more than 10 times the number of developers).

For demanding companies it’s especially tricky to track down that elusive combination of know-how and nouse. ‘We’ve really found it hard to get recruiters to send us candidates that were actually suitable,’ says Paul Lessing, a developer at a gambling start-up. He doesn’t blame recruiters, though. ‘It’s incredibly hard to look at a CV and go: that candidate is useless.’

Once companies have eventually found and persuaded their targets to join them, how do they hang onto them, when they’re being ‘hounded’ several times a week on LinkedIn and the phone by determined recruiters?

T-shirt and hoody uniform aside, clearly not all developers have the same motivations. But there are some reasonably solid rules of thumb, says Chily Fachler, the chief technology officer at ecommerce site Green Man Gaming.

‘What we’ve done is said, "We’re a great company to work for, we have exciting technologies and transformational projects on the go. On top of that we will not underpay you",’ he explains. ‘For someone who is a gamer and a top developer, it’s manna from heaven.’

That’s cut resignations from one or two a month to just one in the last year, he says, while his tech team has grown from 15 to 23. He admits, though, to being ‘lucky’ to work for a VC-backed company where sales have grown an average of 106% annually for the past three years, to £16.3m in 2014.

Not all companies have the resources or commercial imperative to invest in big new ideas and the cutting-edge tech developers are so eager to play with. And therein lies the crux of the problem: what is new can very quickly become old-hat in the fast-moving world of tech.

‘No one really wants to be doing maintenance. It’s the bread and butter you don’t desperately want to do,’ says Iain Reid, who works across creative and technology teams at agency Ideas Made Digital. But those who write a piece of code are more often not the best people to keep it ticking over.

There are things companies can do. Knowles recommends giving developers the time and training, if necessary, to learn new skills. Mind Candy also runs meet-ups and hackathons and sends staff to conferences. ‘It’s definitely worth investing in that side of things,’ she says.

Hackathons, like this one in Tel Aviv, can help keep tech staff engaged.

Michael Chadwick, a senior front-end developer at B2B software company Old St Labs, agrees. ‘Companies that help you grow and teach you things on a daily basis, where you're constantly learning from your peers, are the best places to be in my opinion.’

The atmosphere, including the obligatory casual dress code, helps too. ‘It took me a long time to move away from my current job,’ says Lessing, who is joining Ovo Energy (in part to work with a new technology – AngularJS). ‘It’s not just saying there’s a beer fridge that’s available on a Friday. It has to actually be an environment where it feels like everyone’s at home.’

Banishing 9-5 ‘presenteeism’ can work wonders too, explains Lawrencia Sarah Oppong, a recruiter who has worked in-house at companies including Yammer, Skype and Eventbrite and now runs consultancy Eliana.

‘Financial services and professional services need to learn to be a bit more flexible in terms of their working practices,’ she says. ‘Ultimately people have left, because it shows that you don’t trust your people.’

Kerr recalls visiting one client at around 11am to find someone fast asleep on a sofa in the middle of the office. ‘The CEO… smiles and says, "Tom was working half the night, he’s just having a kip." Years ago you’d never have seen that. [It’s a] very modern way of approaching a management situation.’

Start-ups have another advantage when hanging onto tech staff. ‘You’re often doing more exciting things if you’re in a growth phase,’ Fachler says. ‘In a very large development team it’s unlikely the work they’re doing is central to the company. But big companies needn’t despair – as Oppong says, ‘Not everyone will survive in a start-up.’

Meanwhile, government immigration policy isn’t exactly helping. ‘We are missing out on some amazing talent from Russia, Ukraine - and I mean genuinely gifted, world-class people,’ says Kerr. ‘They can’t get visas.’ (Although he can’t complain personally – turnover at Client Server, which works for everyone from ‘established’ start-ups to investment banks and one of the world’s biggest financial information companies, rose 100% to £10m between 2012 and 2014 and is set to hit £15m this year.)

More Brits than ever are studying computer science or teaching themselves to code, although that will take a while to filter through. Getting more women into the industry will help address the bottlenecks too – and they’re in especially high demand. ‘I have seven big companies with an active positive discrimination policy,’ Kerr says. ‘Three weeks ago we got a good female. Within an hour [she had] four interviews. Didn’t even send a CV.’

But even as companies crave their skills, developers can’t get complacent either. ‘The winds are shifting a little bit to be a bit more demanding of the staff,’ says Ideas Made Digital’s Iain Reid. ‘There’s a lot of really talented young people coming out now. If you’re not keeping up with your industry, then it’ll go right past you.’

Neither employer nor employee can afford to sit still, then. Welcome to the war for tech talent.

Top image source: cellanr/Flickr

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