There once was a time when the Tech, Media and Gaming industry was a private, robust community that enjoyed the fruits of a workforce with strong digital skills unmatched in traditional industries.
Then came the pandemic.
Like the transition from bricks and mortar to clicks and order, traditional organizations were forced to transform. Suddenly, staid industries were changing their job descriptions. The Boomers of industry began adopting hybrid work setups, embracing virtual work and realizing the critical nature of digitalization, secure platforms – and even things as simple as VPNs that worked with more than 100 people logged in.
The tide has changed for the Tech, Media and Gaming industry, and the race to attract and retain talent is on.
Digital talent: It’s so hot right now
Remember the good old days when an onsite beer keg and ping pong table were enough to attract digital talent? Both offerings stagnated as digitalization created new career opportunities around the world. For the tech sector, the ability to work from anywhere led to some of the lowest unemployment rates in several major markets.
Setting aside an incredibly tight labor market overall, the U.S. Bureau of Labor Statistics projects that, by 2030, digital roles will increase by 667,600 jobs. The jobs that will require the most workers? Cloud computing, collecting and storing big data, and information security. Now, add a 25% turnover rate among digital talent, and that’s led to a 1.5% drop in the unemployment rate for the U.S. technology industry.
Meanwhile, just over 15% of the unprecedented 1.3 million job vacancies in the UK are tech-specific. Now combine that with the lowest unemployment rate in nearly half a century. Likewise, in Brazil the demand for digital talent is expected to exceed 400,000 jobs this year, which could lead to the country’s lowest unemployment rate in six years. And China is expected to hire up to 10 million digital-skill employees by 2025 specifically in roles such as cloud computing engineers, specialists in IoT and drone pilots.
Enhanced pay is the way
As they notch up their salary budgets and increase their pay actions, organizations around the world are pointing their fingers at inflation. But inflation isn’t the primary culprit in the Tech, Media and Gaming industry. Rather, HR and organizational leaders are adjusting their budgets in response to a higher priority: the need to meet the demand for talent.
In the United States, salary budgets plateaued for many years at about 3% – despite fluctuating inflation. (Figure 2.) This is evidence that inflation may not be a reliable factor in long-term salary budget decisions.
In April 2022, WTW surveyed 100 Tech, Media and Gaming organizations about the market trends that are affecting the sector. 77% of participants said they plan to change their rewards strategy in response to the competition for talent, not inflation. This response also is tied to concerns about voluntary attrition – so many available jobs in the global market are tempting for digital talent.
In response, Tech, Media and Gaming organizations are enhancing their rewards strategies to address what matters most to this key workforce. For most digital talent, the top priority is workplace flexibility. Employees see hybrid working as an integral part of their lifestyle and work requirements. And 64% of organizations are in favor of hybrid-work setups – and none are back onsite full time. Additionally, half do not have a minimum requirement for in-office days. (Figure 3.)
Premium talent commands premium pay
As mentioned, digital talent is no longer hindered by the constraints of geography. Now, add to this the traditional industries that have come to realize that they have diverse workforces that have diverse needs and experiences outside of the office – and these affect productivity and engagement.
Each of these factors has pushed Tech, Media and Gaming organizations to explore creative options for attracting and retaining key talent. And if any industry is up to the task of leveraging data to its fullest, this is the one. From segmenting employee populations through identifying targeted salary increases and knowing when to offer new-hire premiums, Tech, Media and Gaming companies are stepping up.
In 2021, the average new-hire premium for IT developers in the UK was 15% compared to employees who held the same role for at least a year. There also is a premium (5%) in the average new-hire salaries for IT developers in China. These varying numbers show that talent supply and demand differ in every market, and that’s what strengthens organizations’ motivation to look beyond the local talent pool.
And when it comes to retention, more than 80% of pulse-survey respondents are using targeted increases for key digital talent. The second-most common action? Reviewing pay of specific employee populations, followed by providing higher base salary increases than originally planned.
Tech, Media and Gaming can lead again
In a tight labor market, now is the time to update salary benchmarks to ensure that your rewards approach will attract and retain key digital talent. WTW’s latest Tech, Media and Gaming Compensation Survey results are due in September and will reveal what you need to know about the implications for this industry. Reviewing your full Total Rewards offering – including benchmarking your employee benefits package – with relevant and current market intelligence is crucial for crafting the most appropriate pay and rewards strategy. And that’s what will put this industry back at the head of the pack.
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