representación abstracta del ecosistema tech

Globalization of Talent in the tech ecosystem

From Joppy and many other businesses and networks we are seeing the changes coming in the tech ecosystem and they are absolutely spectacular in terms of Tech & Remote talent & Globalization of the market.

It is incredible how great cultural changes are forced by traumatic situations such as the effects of COVID. It’s difficult for human beings and society to assume changes quickly. It takes years, decades, sometimes centuries for movements to become absolute realities. It happens with racism, gender equality, etc… we have been talking about it for so long, but there is still a long way to go to reach what we are talking about. In many situations, these changes seem obvious but are much more difficult to achieve.

You can read changes that are coming to tech sector here

Remote working & Covid

Taken to something more concrete, COVID clearly brought us remote work. Although it had existed (in part) for some time (especially in the tech ecosystem) it was not widespread. Due to cultural, organizational fears, etc… remote was seen more as something distant, nice, attractive for some profiles but extremely difficult to implement. This chart makes it clear (via elconfidencial) and shows how in EU as in other continents the remote was very scarce before the pandemic:

COVID changed the scenarios logically forced by not being able to leave home. But few of us enjoyed the remote at that time. Without going into the health and painful component of it, the remote consisted of non-stop video calls, little organization, little efficiency and many hours. In my case, I enjoyed it zero at the time.

Changes in remote work for the tech ecosystem

But we learn fast, very fast. We do not realize how quickly we can adapt to forced changes when weeks before it seemed impossible. Although there is still a long way to go, thanks to technology and forced learning, we have adapted and we can start to work / function well remotely. But initially the remote had a clear principle:

Remote work YES -> but do not be farther than 30 km from the office.

But very quickly other changes have started to happen in a short space of time that have modified absolutely everything that involves remote, the talent and the globalization of the market:

Offices closing in large tech companies. Many big tech companies like Airbnb (and many others) have decided that all their employees (or the vast majority) can enjoy telecommuting forever. But not in the city or country where their offices are located, but wherever.

1st big change: Remote is no longer being at home near the office, but you can reside anywhere.

This is causing great changes where these employees move to other countries but above all that from anywhere in the world you can opt for those positions in companies where many want to work.

But the above would not be so interesting if the salaries do not change in remote Vs. what they pay you in your country: To give a simple example in a survey we did in Joppy, a fullstack in Barcelona with experience can charge about 40-80K in Spain.

This same profile may now be receiving offers of more than 100-150K€ to continue working from anywhere in the peninsula, which can more than double their current salary. And (almost) nobody gives up such a salary increase. And when you ask a developer which are the Benefits & Perks they value the most, there is not much more to talk about.

Great salary + Flexible hours + Remote + Global projects with talented people = Hiring success

All this is accompanied by a problem of supply and demand in talent. We all know the lack of talent in many positions in the tech ecosystem, and what it causes is that giant companies go looking for their talent outside their borders. Remote + big salaries allow them to do so. This is what causes the tech talent market to be very tense in Spain (and in many other European countries, if not all), which sees how these large companies come to look for talent that only conceived to work for a company in their own country.

Talent is no longer local but increasingly global

And what underlies this is that Spanish or European companies are closing large rounds of funding to compete with this global talent. Some of them can afford it in part (Glovo, Wallbox, Odigeo, etc…) but most of them cannot. And above all they should not because you can not go to that war without being Big Pocket.

And logically big EU or US tech companies come to Spain or Europe looking for talent. Big tech companies or good local universities are good reasons to come to fish in these parts. 

How does the developer want to work? Just like at home

Companies in the tech ecosystem are entering a very complex dilemma (it is not easy to change habits and forced by what the rest of the sector is doing) because talent decides:

The developer wants to work full remote. You can not offer it, but when the talent has much more decision-making power and can choose between several job offers, you have to accept that these are the rules of the game.

And many of these profiles do not plan to return to work for a company that is not full remote because they know they will always find very good jobs that allow them to do so. But remote work is not for everyone, but for those who believe in it (it is perfectly legal not to do it and it cannot be criticized to advocate for another culture) and those who are prepared for it. Easy to say, more complicated to do it well.

The fact is that technical profiles want flexible hours, they know they can ask for big salaries, etc… I will not discuss whether it is deserved or not because this is not very important. It is supply and demand and the liberalization of the market causes it.

In addition, the bureaucratic issue was before a clear legal impediment to sign talent from outside and have it hired as an employee. This is over thanks to unicorns like Deel or that make it very easy and fast to sign talent from anywhere.

Full remote startups

The consequence will come for small companies (startups) or companies that want to grow and are demanding technical talent. They are going to start having great difficulties. They certainly have options:

  • Adapting in part to the conditions that demand that talent
  • Offering other benefits (shares, etc…)
  • Looking for talent outside their borders and in other continents. If they take the talent that is in your country, you will have to do the same by going to look for your talent outside where the big companies still do not capture it.

The problem with this is that if your business depends on constant innovation and is intensive in development talent? how do you compete if your market is not global?

Large companies compete in a global market with global talent. Startups often have to prove that they work in their local market or at most nearby markets.

We already know in the EU due to cultural differences, languages, etc… how difficult it is to compete outside our borders. So we are facing a war of difficult positive resolution: We do not compete as equals. And it is only the beginning.

If I am small in a small market and I have little money, I have no chance of attracting a lot of talent because of all the above. How do I then survive, prove and grow when innovation is key?

There are many startups and there will continue to be many success stories in Spain. I am not saying in any case that it is no longer possible to achieve it, but the rules of the game have changed a lot. And there are more and more no/low code options or other opportunities to be considered.

The fact is that attracting and retaining talent will brutally change the rules of the game of the tech ecosystem in the coming years. And it’s not all about money by any means. The point is that it is already happening and the consequences of moving from local talent to global talent vs. local market to global market generate a clearly unequal competition.

Before we had our talent “protected” and safe, now we do not. Very interesting times are coming where not only the search for talent is affected. But what I am and will be as a company.

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