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Opportunities & Challenges for European Tech Employers

Opportunities & Challenges for European Tech Employers: Hiring Insights for a Competitive Sector

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“Worldwide, there is talent shortage in tech. European employers face this challenge as well: they have large numbers of vacancies and not enough candidates to fill them.

The good news is that this gap between employer demand and jobseeker interest is shrinking in many markets. We can measure this decline and pinpoint where jobseekers are interested in working with data from Indeed, and in this report, we use these data to create an in-depth picture of the tech industry in Europe. With our findings, employers can better understand where opportunities in tech hiring lie—reaching more candidates with the right skills across the continent.”

Indeed Chief Economist Tara M. Sinclair

Tara M. Sinclair, PhD

Chief Economist, Indeed

The talent shortage in the European tech sector

What is the state of employment in the European tech sector today? The public discourse on the topic is dominated by the skills gap: there are many openings for specialised technical roles and not enough people to fill them. The Confederation of British Industry (CBI) recently reported that more than half of UK businesses fear an imminent ‘skills emergency’. The CBI survey findings revealed that shortages are most prominent in sectors such as engineering, science and high-tech. The Cologne Institute for Economic Research (IW) earlier this year reported that 96 job types in Germany face a shortage of skilled labour and the tech sector is among the most affected. Across all sectors in the Netherlands, an average of 13.6% of vacancies were unfilled each quarter in 2014, while 21.9% went while 21.9% went unfilled in the Information and Communication industry, according to Centraal Bureau voor de Statistiek (CBS) data.

Building on the results of our latest global report ‘Beyond the Skills Shortage: How Tech Talent is Shaping the Economy’, this analysis aims to map the European tech sector, with its unique dynamics, in order to inform employers and jobseekers using real-time information of what’s happening in the labour market, and help them find each other at the right moment. It also includes a dedicated focus on the UK—Europe’s most successful tech market—with disaggregated data at the city level.

In the following sections, we’ll address these questions and more:

  • Where are the tech jobs in Europe? And the jobseekers?
  • Has the gap between jobseekers’ interest and employer demand for tech jobs increased or decreased?
  • How international is the tech jobs market?
  • What can employers do to make sure that they are reaching international candidates as well?
  • What is the main European tech hub?
  • How are other cities in the UK doing compared to London?

Today, companies of all kinds not only employ software programmers but also engineers, web developers, data scientists and many other types of specialised technical staff who work with software. Rapid technological advances are affecting every company and, as a consequence, employer demand for talent with highly technical computer and software skills is on the rise.

Over the past year, Europe has produced 13 ‘unicorns’—technology start ups that have reached a value of at least $1 billion, according to GP Bullhound research—suggesting that the continent is producing more heavy-hitting tech companies than ever before. According to the European Commission however, Europe invests almost one percentage point less of gross domestic product in research and development than the US, and 1.5 percentage points less than Japan. This contrasts with the fact that since 2000, the proportion of people employed in science and technology has increased in all the European countries considered in this study, with the highest relative increases in the UK and Ireland, two English-speaking countries with thriving international tech hubs.

The share of the population employed in science and technology has been increasing (Source: Eurostat)

This has taken place in the context of an increasingly global tech market characterized by the high mobility of specialised workers. Data coming from Indeed shows that jobs in the Computer and Mathematical field are between two and three times more likely to be clicked by international jobseekers than the average job in the US and UK. Europe faces fierce competition from US tech hubs: San Francisco, San Jose and other US tech hubs such as Seattle, WA and Austin, TX have international pull. According to Indeed salary data, the typical Java developer is paid 47% more on average in the US than in the UK. Thicker tech labour markets and higher density of tech firms allow tech workers in the US to enjoy much higher wages as a result of better job-to-person matches and higher levels of competition for talent. To a lesser extent, Europe also faces competition from emerging tech hubs in Asia and the Pacific region which are becoming more aggressive in attracting top tech talent.

We approached our research into software jobs in two ways. First, we looked at a list of job titles related to the creation of software and examined employer demand and jobseeker interest in these jobs—both in each country and from abroad—across a sample of European countries and cities.

The resulting analysis of employer demand and jobseeker search behaviors reveals the patterns of the tech sector in each country: what differentiates them and what makes them similar. Second, we looked at postings in the three non-English speaking countries of our sample and calculated a measure of how ‘international’ job titles are based on the language used to advertise the job and the number of “clicks” coming from outside the country. The share of postings for different job titles in the software field employers advertise in English is changing across countries and this has implications for the number of people applying (clicking) to these jobs from outside the country. The final section of this report takes a closer look at job search and hiring for technical roles in the UK.

The job titles included in this study are:

Comparing Employer Demand and Jobseeker Interest

2

Comparing Employer Demand & Jobseeker Interest

Germany has the most tech jobs, but jobseekers
prefer other locations

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Tech candidates are interested in working in a select few cities

3

Where Tech Candidates Want to Work

Tech jobseekers in Europe are focused
on a select few cities

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The UK and Ireland Are Top Destinations for International Jobseekers

4

International Job Search Trends

The UK and Ireland are top destinations for international jobseekers

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The Silicon Roundabout it a European tech success story

5

Spotlight on the UK

The Silicon Roundabout:
A European tech success story

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