Whether you're an employer or a tech talent, you need to know the state of tech at all times, whenever the opportunity to make a good deal comes. To make sure that your business strategy or career are not betrayed by outdated knowledge, I share some insights into the challenges of the tech market and its relationship with talent.
The Portuguese tech market has undergone some shifts in terms of wages and employee retention. The current hot topics are employability, the number of offers per trained professional, wages, the possibility of remote work, the most looked-for tech stacks and of course work/life integration. Only flexible companies can handle these changes.
In case you haven’t read Part I of State of Tech, please start here.
Attracting talent in a volatile market
The competition caused by the Portuguese tech hype is a source of major challenges in the tech market. The demand keeps growing and the supply falls short when it comes to meeting the needs of companies, a situation that produces a close to zero unemployment rate. The trend is boosted by the outstanding quality-price ratio of Portuguese talent compared to different time zones. This conjuncture is extremely prone to job changes and causes a professional instability that's already considered a pre-established “evil” in this market. The volatility of the professionals can be a threat to the continuity of projects and undermines the well-being of the teams. Also, on the professional side, changing jobs constantly, spending only a couple of months in each project, is not in itself an absolute guarantee of a successful career. Instability can be a negative indicator in a professional profile. A solution to this reality? Company culture. It's absolutely pivotal for anyone who wants to find a good match when it’s contract-signing time.
What happens then is that older companies end up losing their ability to compete with brand-new businesses and, as a consequence, lose their best professionals and those who simply don't want to settle. Before, a good engineer would find a stable, guaranteed job and could stay ten years in the same company. Now, the average stay is about 3 years, at most. Working on a project for only a couple of months is already quite common.
Companies must be proactive in their restructuring efforts to keep themselves in tune with the new business trends. This often implies decisions taken by an international leadership, for instance located in the US or in Germany, people who, due to their distance, don't have the proper sensitivity to understand the reality and needs. It becomes a matter of numbers. Confronted with the new market demands, “this person used to cost x and now costs x + y” is an immediate and too simplistic calculation. So, when they cannot change the financial aspect due to a lack of flexibility, they attempt to alter the fringe benefits. In the meantime, the issue is that professionals are already used to cumulative proposals, in other words, the financial aspect plus benefits. But what is actually the purpose of fringe benefits if other essential values are missing?
Business strategy and tech stacks
The Web Summit has brought awareness to Portugal and many companies ended up establishing their headquarters right here or, in other cases, they shifted their development center from another location to Portugal. European companies will always prefer to have a development and support area closer to home than, for instance, in India, both for cultural proximity and time zone handiness. American companies may ponder the possibility of moving to Portugal and abdicating proximity to access similar quality resources at lower rates. In these cases, they tend to keep the other company sectors, such as marketing and management, at home. Another recurrent behavior is the acquisition of companies and the amassment of international projects, in which the development capacity is transferred to Portugal, due to the nation’s financial competitiveness.
If companies fail to adapt to the market reality, these wage practices won't be sustainable much longer since, due to platforms like Glass Door, companies can get their market reputations tarnished. We're a global village, right? Nothing can hide for too long. So, these companies have two alternatives: they either change their benefits strategy, ensuring that they don't distort their own culture in the process; or they'll struggle to continue to attract the best talent to their teams, running the risk of being limited to hiring their second options. The best engineers will opt for the most advanced technologies.
And now comes a hard nut to crack: companies have to make a decision. Some will choose to stick with old technologies, thus safeguarding product reliability due to the difficulty of changing the structure and the financial effort involved in a code-updating process. This option implies losing one of the most important talent-related assets, in addition to wages and fringe benefits: the guarantee of always staying up to date with the state of the art. Rest assured that, if the stack is not worth it, the other variables will probably lack the prominence to attract and retain talent. For instance, Java 5 is barely used as we speak while Java 12 is already out. Losing professionals because they have no interest in the projects’ features and technology becomes an extremely palpable risk. Other companies will have to upgrade the stack to improve product performance or security and will get bonus points from the side effect of becoming more attractive to new professionals. Yes, that’s the truth, the reliability and the attractiveness of technologies tend to be mutually exclusive. Open-mindedness and flexibility from the teams are mandatory requirements to decide on the path of commitment or opt for a technological shift.
The banking sector is an exception where maintenance is based on Cobol. Almost no one from the younger generation is interested in this language. Nevertheless, this is the technology most used by the financial sector due to the risk and high costs involved in a structural change. That's why Cobol still has plenty of years ahead of it. This means that, in 10 years, Cobol professionals will be few, and those who want to work on this type of technology can be extremely well paid. The problem is that the market isn't ready for it.
So, what are the requirements to keep attracting tech talent in Portugal?
Good partners make good business. The truth is that even meteorology makes mistakes and these predictions are equally as fallible. In any case, companies that want to adapt themselves to new professional and technological realities will need good partners on their side. Running the risk of relocating the business and changing the value structure doesn't have to be the reality of everyone who wants to continue to attract talent and dominate the best raw potential in Portugal. The professionals who want to protect themselves against unstable market swings must also look for partners with whom they identify and safeguard their interests in the ever-changing technology industry. So, level up your team and your talent. Get the job well done. Don’t forget the old motto from Goldsmith and Ogilvy: “If you pay peanuts, you get monkeys”. Whether you're an employer or a professional, look for partners with the right experience for your needs, who are able to find, manage and retain the best tech talent.