Manchester city centre

Don’t bet your scale-up on a gentleman’s agreement – find the skills you need quickly.

The definition of a gentleman’s agreement is an arrangement or understanding which is based upon the trust of both or all parties, rather than being legally binding. It’s traditionally sealed with a handshake – perhaps a digital one in the year 2019/20 – but based upon loyalty to one another to see through the promise.

In the case of the CTO or IT director, these gentlemen have traditionally vowed not to poach each other’s technical staff. Tech skills, especially in software development encompassing the relatively new profession of DevOps are difficult to find, and this is increasingly the case – but in a small pond the size of Manchester where CTO’s and IT directors know each other personally or know of each other indirectly via their network, this is amplified. So far, they’ve held tight – “you stay away from my coders, and I’ll stay away from yours” – but as Manchester grows and tech companies move in, it’s difficult to see how this can prevail.

Manchester is a village when you boil it down to what is essentially two square miles at its heart in the city centre. Staff come and go of course and move around between companies but poaching from each other has been a big no! So what happens when the skills gap begins to grow and at enormous pace? There have been many big brand names that have moved into the city centre, or within a 10 square mile radius of it in outlying areas such as Warrington, Bury & Bolton and Manchester Airport – all of which put a strain on finding the right people for the technical jobs available. The latest company to throw its hat in the ring this month is Siemens. It already has a huge office on the Didsbury Science Park but has announced that it will make the site its UK head office and hire another 60 staff to the location. The pressure is mounting.

According to Tech Nation’s Bright Tech Future Jobs and Skills report, Manchester already employs more than 100,000 workers in the digital economy but also had around 164,000 vacancies for both workers with tech skills and non-tech skills in 2018. New figures from Tech Nation and Dealroom.co for the Digital Economy Council also show that tech companies in the city have raised $528m from investors so far this year, a threefold increase on last year’s venture capital investment, confirming Manchester’s position as one of the UK’s leading tech hubs.

In the last two years alone the number of large brands moving into the city has exponentially grown; Hewlett-Packard, Amazon, Sainsbury’s, MoneySuperMarket.com, Bet365 – taking up their places next to those already entrenched here such as AutoTrader. Over the Pennines in Leeds, companies like Jet2.com and BskyB are also growing – and offer more choice for a not-insurmountable-commute each day. The northwest as a whole is an increasingly attractive place to do business and live and it’s an ever-growing list of progressive digital brands that see Manchester and more widely the northwest as a tech-hub providing the skills and talent being showcased via the drive towards The Northern Powerhouse.

What these companies have in common is an increasing ambition to become digitally native businesses that can scale at speed with market changes. The movement north brings some cost challenges to those who take the leap of faith in relocating. Currently salaries in the north remain competitive to those organisations looking outside of London when moving their operations. However, this is under threat as plush new office developments attract businesses, driving up the cost of salaries and recruitment fees as they look to attract and retain talent in an expanding region. The talent pool, although growing, is unquestionably smaller than that of the capital and pressure on companies to hire the right people to drive their business is ultimately pushing up salaries. As the larger brands snap up the talent, the smaller dotcoms struggle to compete. Roles and responsibilities also move up a gear. Software development teams require ‘agile coaches’, ‘software development managers’ and ‘DevOps’ personnel – the bringing together of software development and software delivery in a commercially beneficial infrastructure. Finding those skill sets in the northwest is challenging in the short-term – especially when rapidly scaling teams.

If you’ve been leaning on your network of co-directors in brands around the northwest to ‘do the right thing’ for a while now, it’s probably time to expect the worst – there simply aren’t enough great technical people to go around and sooner or later, those brands will come looking for the best talent. Your talent! Culture within your organisation plays an enormous role in keeping them over the long term, but it’s important to have a plan of action if you need to scale rapidly with your market.

If you’d like to talk to Godel about how to scale with a nearshore development team, please call 0161 219 8100. Alternatively, you can email hello@godeltech.com and we will get back to you shortly.