The Godel Pod: The North/South Tech Divide – Is There Really One?

Welcome to The Godel POD. In this episode, our hosts Sarah Foster, Client Director and Joshua Morgan, Client Engagement Manager at Godel joined to talk about the the topics that got discussed at their recent Tech Leaders dinner about the north/south tech divide.

Sarah Foster: [Intro] In this episode of The Godel POD, we’ll be talking about the north south tech divide, whether there is one, whether the graduates have a dependency on one, and how we’re going to explore it.

[Intro music]

Sarah Foster: Hi, I’m Sarah, I’m Client Director here at Godel.

Joshua Morgan: Hi guys. I’m Josh and I’m a Client Engagement Manager here at Godel.

Sarah Foster: So, obviously from the intro, we’re gonna be talking about topics that cropped up during our Tech Leaders events. Now a main one for that is this North South tech divide. Now when we have the event, Josh, we kind of spoke with 15 or 16 CTOs tech leaders. So, what were some of the things that that you saw from conversations she had?
Joshua Morgan: I think the biggest thing for me is one of the topics that we’ve got to take from especially the last, the last 18 months or so is this hybrid world that we now live in. And we can look at the divide as much as we want. But actually the idea of people basing themselves in the north or the south is starting to disappear in a sense. You can base your business where you want and you can have a central hub, but actually, I think sort of people within the tech world are growing to the idea of hybrid working and working for businesses, not in a comfortable position to where they are. I think there was a lot of discussions around that and businesses that potentially three, four or five years ago, the idea of hiring someone for say you’re a business based in Manchester, you’re hiring someone based in London, it was almost foreign and something you would never do now it seems businesses are growing to this and actually welcoming it. So, lots of interesting points coming from the meal.

Sarah Foster: Yeah, and I think something that cropped up from my conversations is that but also slightly different. So there’s this new term that’s come around called North Shoring. So that’s where a lot of companies are developing tech centres within these kind of northern areas so be it Manchester, Leeds, and up because it’s cheaper from both a talent and the staffs perspective, so that kind of bricks and mortar, and unfortunately, the divide of salary tends to be kind of cheaper in the north. So with this, the likes of Amazon, Channel Four, they’re maximising that ROI along the way, as well as getting great talent, but still having a bit of a tech hub with this new term of Northshoring. And now Yorkshire and Humber, those areas they’re also a hotbed of disruption. So those types of technology, Channel Four Nestle McLaren Rolls Royce. They’re having these kind of spinning these verticals up to have an advantageous aspect over that local talent. Now, the people that we had at the meal, they all tended to be from the North. Was there anything that cropped up from what they said that kind of similar to this North shoring aspect?

Joshua Morgan: I think it’s interesting. I think the one thing we did discuss with you, which you did touch on is salaries and the divide in salaries is almost eyewatering. Just as a most recent study that the average salary for a tech role in in London is around sort of £72K, you look towards Manchester, it’s around £57. The gap there is absolutely huge. I think you’re right in a sense that if a business now is looking to grow or looking to position itself, they’d almost be stupid to base itself on the south, just looking at salaries and looking at that sort of the wage demand from people in those areas. It’s almost eye watering and a little bit scary. To know that there can be that much of a difference in two hours drive, let’s say.

Sarah Foster: Yeah, I mean, I think it’s more than two hours’ drive. But do you think from a tech perspective, the actual skill set could be all that different between the North and South. Or I know I’ve had conversations not from the event but conversations in the past where I’ve been speaking to people and the South, they are hiring a much lower calibre of Candidate for a higher salary than what they could get in the north.

Joshua Morgan: I think it’s something that we’ll learn more about as the years go by. I think you look at Manchester as a tech hub in Europe. It’s the fastest growing, it’s received 500 billion pounds worth of funding. So there’s obviously a reason for that. And there’s obviously potential in Manchester in the North as a whole in terms of growing within tech. So from a talent point of view, I think it’s probably resides on preference. We’ve had a number of discussions about it myself, a couple of the attendees at the meal was actually around the topic of graduates. And the idea that that startups are actually beginning to really grow within the North. 51% graduates in Manchester, decided to stay local, which is just over half, which is obviously a sign for that. And there’s obviously a reason that the people aren’t just coming to the north to finish studies and especially within the tech world and then moving on to bigger and better jobs down south or in London. There’s actually a reason for people to stay and there’s a reason for people to learn the trade up here but also feed back into the community feed back into the tech environment. So, there’s obviously a reason for that. I think we’ll learn to know more over the years.

Sarah Foster: Yeah, I think Manchester is always going to be a tech hub. There’s over 10,000 digital and tech businesses in Manchester communities growing massively day in day out. I mean, customers of Godel such as AO, sofology, rental cars, they’re all Manchester business. Yes, they’ve added growth in capacity with using Godel services, but they are still in Manchester hub born and bred. That kind of graduate, that piece that you just mentioned. There was actually written a report this morning. So, Grow Timely, that claims 69% of employers within the UK are facing this digital skills gap. However, unis believe that they alone will not be able to address the issue. So, what do we do in that instance? Do we obviously AO, Sofology, rental cars, there’s a number of other partners that we work with. They’ve mitigated that risk by partnering with Godel. Whereas there’s other businesses out there that want to keep it at home. They want everyone in the offices. So what do they do in those situations when in 5, 10 years’ time, they want to grow and they want to scale and they don’t have that resource.

Joshua Morgan: I think it’s a great point you make and I think it very much comes back to what was what I said at the start of the podcast touching on businesses learning to adapt, and really going with almost learning to, push everything away that they used to do and all these things that they’ve learned over, I don’t know 15, 20 years of business and then look at COVID and look at the situation we’re in now and say actually, we need to address this and we need to look at different ways. So you look at it and a business probably looks at the graduate scheme, and they say, are they willing to invest two, three, maybe four, five years’ time into someone before they real really start to actually see the benefit of that or are businesses impatient and are they looking for the quick fixes. It takes a lot from a business and a lot of planning to actually invest in a proper graduate scheme. So it’s good to see it and as I said, the 50% of graduate state of North is something that is exciting I can imagine for businesses so I think we will see a lot more tech businesses look towards that graduate scheme and see actually, is it worth the investment from us to put time and effort into growing the industry out of college?

Sarah Foster: Yeah, I mean, as you can see, so when I was at different events last week, he was saying they only hire graduates because what they can do is they can upskill them within. Now when they’re hiring graduates up North because they’ve got two hubs. They’ve got one in Manchester and one in this up just outside of central London. When they’re doing this in the north. They tend to have the developers stick with the business, they tend to have them upskill and stick it out. Whereas those in the south miss out because there’s so many different tech hub businesses on their doorstep, cover the sexy cool brands, the FinTech, the health tech, all these kinds of upcoming sectors, they’re finding they’re upskilling and then the becoming a bit of a flight risk because they get poached because they’ve upskilled so dramatically, whereas they don’t tend to find that in the north.
I was reading in mobile magazine. Throughout the UK 61% of organisations in the Southeast London, say their location is advantageous for their digital transformation ambitions, whereas it’s just 41% in the rest of the UK, but the majority of the North, just shy 70% Say location is a barrier to accessing the talent compared to 51% in the south. So it kind of reiterates that this obviously is much denser population within the south which there is going to be. However, with that the North graduates wanting to stay within the North. How will that affect his north south divide? Will it make it bigger?

Joshua Morgan: I think so, I think it comes back to the big thing and that the biggest thing about this this graduate scheme and taking them on for businesses is the risk. And I think you hit the nail on the head with you can invest all the time or the money and all the patients into a graduate and get them to a position where they are earning money for your business and the investment is bringing it back to the business but as you said if they get a bigger and better offer, you’ve invested in this person to have them leave.
So it’s about it’s about managing risk and being in a position as a business where you can you can understand what’s going to happen to these graduates at the end of their journey. I think from a north point of view, it can only be advantageous that the graduates are looking at sticking around and most likely sticking with the businesses that are putting the effort into them. It shows that the investment is obviously paying off. You spoke about sort of location. I read something in an article a few days ago, which basically mentioned that 74% of people believe they would have to relocate to secure a job in tech. So it does show that that that stigma around the South is still sticking around and I think people’s opinion on the south in terms of tech will continue to be as it is for the next few years but it’s almost like contradicting statements in a sense that Manchester is there and it’s growing. It probably needs a bit more time and a bit more proof in a sense to show sure to show where it’s going to end up.

Sarah Foster: Yeah and I mean I wonder the change of plans with this HS2 and the way in which this kind of hybrid working world is albeit it’s not coming to an end a lot of people are actually wanting to get back into the office and have that form of communication day in day out with people. Will that again, create a further north south divide? I think it’s possibly too early to tell. This last 24 months, nobody could have predicted what has actually happened. And I know what I’m speaking with so many different people and they’re finding yes, they started with this hybrid working and people can work from home. Four out of five days, they only have to come into the office one day a week, where it’s actually increasing now and they’re coming in two days a week, three days a week, because they’re finding their daily stand ups their weekly retros. They’re so much more productive when people sit around a table as opposed to waiting on a zoom or a team’s meeting for somebody to unmute themselves. It’s their unofficial way of saying I’ve got something to say rather than kind of putting their hand up. Are you missing those social cues of knowing and having that kind of comfort of face-to-face familiarity? But on the north south aspect if you are a business that is based in the north and you’re hiring from the south, are you then doing yourself a disservice and missing out on the northern talent. On the flip side of that if you’re in the south and home on the north, are you then falsifying salary requirements from that north south divide? There’s so many different dependencies and so many different implications of doing each way of doing it. I just think it’s really unknown.

Joshua Morgan: Yeah, I think I think that you make a really interesting point in regards to this hybrid world. I know you spoke a lot about on number of your podcasts now. I think the conversation I’m having most of the people it is normally to do with what’s their stance on it. Are they back in the office? Are they still working fully remotely? Where are they at with it? Speaking from personal opinion, I’m someone that loves to be in the office, you hit the nail on the head, it’s that water cooler conversation is you’ve got a quick question you need to ask someone it takes you 30 seconds other than Can I stick 20 minutes in your diary at one o’clock just to ask you a quick question. It’s almost a new issue that two three years ago businesses didn’t know that have to deal with and now people have got comfortable with working from home people have gotten comfortable with working hybrid, how do you as a business transition either back to normal or towards a hybrid way of working, if that makes sense.

And that the HS two situation it’s a few years away. I think before anything’s even in place. It’s going to be at least sort of 20, 30 around sort of current sort of plans. So too early to tell in a sense how that’s going to affect businesses, but it’s a lot for people to travel from the north to the south every day for to be in an office. It’s becoming increasingly hard for businesses to say we’re going to we’re going to hire someone from three plus hours away, but actually we would like you to be in the office twice a month, etc. How do you how do you deal with that? Because it’s all about personal preference and personal opinion. You’re either someone who loves the office or has adapted to working from home and can naturally do everything they could do a desk in central Manchester that they can do in their base in Bolton, let’s say it says it’s just understanding where, how to how to get the line right and how to understand as a business that whatever you do, you’re almost always going to upset someone and you’re never going to get it exactly right. You’ve just got to do your best to do as much as you can as a business to get your workforce ticking.

Sarah Foster: Yeah. And I think you kind of mentioned it there like working in the centre of Manchester and Bolton. So as a northerner I think nothing of travelling an hour and 10 minutes one way to get into the city centre, because that’s what I’m used to whereas down south, the tubes, the traffic, those shorter journeys will be it’s much less as the crow flies is actually longer. So, is that then causing southern headquarters companies should we say to have that remote world, which they can then hire from the North? Because they understand the troubles of travel, whereas, especially within Manchester in the surrounds of Greater Manchester, there are so many different routes into the city. You have people travel, from Yorkshire into the city you have people travel from Liverpool into the city from the Wirral into the city and everything’s quite well connected. The transport system in London is much better than the North.

So how do we then take that into account from a company perspective that when you work within a southern headquarter business, how do we then compute the travel distance to what you would be doing in the north and what’s feasible, what’s not feasible? Is that something that companies are considering as to why they’re moving up north? Is that why Channel Four from up north because they know yes, it’s cheaper from both a bricks and mortar perspective, from a talent perspective. And then they know they’re going to have people in the office because people are going to commute in because it’s sometimes easier. It depends on who you speak to. Or is it because they know is literally just the bricks and mortar and the cost perspective? How will we ever know what the reason is as a general consensus?

Joshua Morgan: I think it’s a fantastic question. And I think it’s probably what businesses outline as soon as they look at relocation or where they’re going to settle. So, to start off, I think it’s it’s multiple things you’ve got to look at and understand what you want from it. You speak about sort of yourself as a northerner travelling in. I live so this was a bit of context Godel’s office is in central Manchester, I live about a 15-minute walk away. The idea of working from home is almost foreign because why would I bother working from home if it’s a 15-minute walk away? That’s my personal opinion. That’s how my stance on this is hybrid or remote working. Someone who works and who lives an hour away or an hour and a half away in terms of driving from where they work is going to have a completely different stance on it.

So I think as a as a new business or someone looking to relocate or even or even looking at talent is you’ve got to weigh up the benefits against the disadvantages and understand what is going to do the best for our business. If placing ourselves up north is going to mean that we might be more likely to bring people to the office more is that really that much of an advantage where you place yourself up there, but then also take away take yourself away from the bigger businesses down south? Is there a better talent or north in regard to what you’re looking for? Or is that down south? All of these questions have to be asked by the people in charge of the businesses and understand is this something that’s really going to have an effect in our business? You throw the third one into the hand you spoke very, very briefly about Godel, just location really matter. When you when you could utilise someone like Godel who almost throws location out of the hat in a sense it’s questions that almost we’re not really qualified to answer it’s about these big businesses to answer these questions for themselves and understand where they want to sit as a business.

Sarah Foster: Yeah, there was a study that said just under half of the North, say they require a niche skill set is that currently not available? Or is just 35% in the south who said similar? So effectively, if I read between the lines, that’s the south saying they have that skill set available on their doorstep, but the North don’t know, is that because they’re looking for this same skill set at different salary banding? So obviously the sound he kind of mentioned earlier, the salary bundling is, what was it 20 grand difference?

Joshua Morgan: Yeah, essentially.

Sarah Foster: Is that 20,000 pounds is going to get you the skill set that you require within brackets that you’re looking at. Whereas if that is the case, then the skill set could possibly be in the north. But they’re not paying the right amount because they’re working remotely for a Southern Company. So, my question to anybody listening and I’d love to hear your thoughts on it is, is there a north/south divide? Has that now been mitigated because of this remote working? It’s something that’s really interesting to me because we are a small country, really. But historically there was such a divide between the North and South.

Sarah Foster: I think, I think to be honest, I think it’s a really, really good question to ask and I think you’re the way you position that is really well, because I think, in a sense when we were putting this event together, and we wanted to have these discussions around the north south divide. I don’t know about you, but I almost expected to come out of the event with a blanket answer of yes or no. And actually, what the event is doing is it’s made us have further conversations, which is perfect. It’s exactly why we want this podcast, and we ask these questions. And we have this discussion because we sat at the event, and we said actually there’s so many different opinions and there’s so many different thoughts from different people coming out of this that actually we don’t have an answer and we probably won’t really get an answer.

I think the big question I posed to anybody listening and anybody who really takes an interest, because of this post COVID sort of post lockdown “let’s hope” world who really cares about location, everything’s come back. I think most of the points that we’ve made is does location really matter anymore with this hybrid world, hybrid working teams which everyone is very bored of right now and these zoom calls. Does location really matter. And actually, how much of a difference is making on these businesses? This isn’t this isn’t me making the point that it doesn’t matter. It’s the question is how significant is the difference in location? What is the divide and is it business by business? Is there a genuine sort of the study that can be made on the significant differences? These are all-good points that I think we’ll learn more about as we go on.

Sarah Foster: Yeah, I agree. And I think we’ll never know the answer. It will always be changing. So is there a north south divide?

Joshua Morgan: Think you’ve hit the nail on the head and I think, to be fair, I think we’ll work welcome any thoughts any opinions on this on this on this topic? Because myself and Sarah we can we can talk for hours about north south divide and in regards to what we learned from speakers in this event. What we really want is we really want to understand what you guys the listeners think come on what your thoughts or opinions are and have you on and discuss it with you because that’s how we got to this point. We had discussions with other people, and we got here. So as things go really enjoyed sort of sort of discussing this topic with you, Sarah, I don’t know whether you’ve got any other points to make.

Sarah Foster: Apart from the north south divide, it’s going to be somewhere else that pops up. Is it going to be the North South Yorkshire divide?

Joshua Morgan: You wish? You wish? [Laughs from both]

Sarah Foster: So yeah, great to chat and we’d love to hear your thoughts.

Joshua Morgan: Thank you very much, everyone.

Sarah Foster: Thank you.

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Sarah Foster: [Outro] Thanks for listening to our Godel POD. Please subscribe, like and let us know if you’d like to take part in the next POD and look out for more.