Fighting the odds

A look into the war on talent in Amsterdam’s tech scene

“Oh, I wish I had studied computer science!” It’s quite a common phrase these days, as digitisation takes over more aspects of our everyday lives. But even though coding seems like a superpower, the skill has become a standard requirement. However, the amount of available tech applicants nowhere near meets the growing demand – and, as a result, the tech scene is currently facing a ‘war on talent’.

With the tech industry increasingly influencing the economies of global metropolitan areas – Amsterdam being no exception – the City of Amsterdam and the Amsterdam Economic Board have come together to research the issue. Over the past few months, the City of Amsterdam, the Amsterdam Economic Board and StartupAmsterdam have met with local tech players to examine the status quo and explore what role governmental bodies can or should play.

This has resulted in a white paper titled ‘Fighting the odds’, which describes the following conclusions and actions.

Findings: The status quo of the Amsterdam tech scene

We found that the fight for tech talent is indeed extremely fierce, with wealthy London and sexy Berlin standing out as strong competitors.

Required skills

The most-desired skills are by far front- and backend developers. Earlier research concluded that there are currently 26 vacancies for every junior IT specialist in the Netherlands. Our research confirms the severity of this issue: the demand for data scientists is on the rise, and even though it is still much lower than for developers, it is nearly impossible to attract a skilled data scientist to Amsterdam-based tech firms. Regardless of current HR standards, many tech companies keep their developer and data scientist vacancies open indefinitely to ensure they do not miss their shot at a qualified candidate.

The majority of these data scientists and developers come from abroad, with tech teams being the most internationally oriented teams. On average, 70% of tech teams consist of non-Dutch employees. This means these firms normally recruit from abroad; when hiring someone, the employee often has to be relocated to the Amsterdam region.

When it comes to education level, we found that small tech startups hire a large amount of intermediate and senior talent, whereas larger firms take in more juniors. Small startups have less time to train and monitor juniors that do not fully understand the systems, techniques and development languages.

Pros and cons of Amsterdam

We asked tech companies about the biggest barriers to attracting talent.
The largest barriers, apart from the obvious scarcity, were housing, local competition and cultural fit.

On the bright side, the quality of life, 30% tax ruling, and the international orientation of the Amsterdam Metropolitan Area makes the region attractive for businesses as well as talent.

Education

We also confirmed the existence of a gap between education and the tech market. First, the number of students that pursue education in tech-related fields is relatively low, with only a couple of hundred graduates per year. Second, tech-oriented curricula do not always match the skills that are requested in practice. Tech firms state having to ‘retrain’ their employees in coding languages and other pragmatic approaches. Third, the connection between tech companies and universities is still young and unstructured, with tech firms often not knowing where and how to scout at educational institutions.

The tech market is still dominated by bachelor or master backgrounds, but due to further professionalising, more pragmatic tasks and jobs are occurring. A noteworthy fact – and prime example of the talent shortage – is that the best tech developers often turn out to be dropouts, landing in or creating a job before having finished university.

A look into the future

Last, we asked a panel of tech CTOs what changes they foresee in required tech skills. The conclusion was that knowledge of new technologies such as AI and VR are ‘nice to have’ but have no priority yet, with data science and development/coding still being the core for tech teams in the coming years. Most tech firms have a strong, increasing demand for DevOps skillsets. Most tech firms, both small and large, require their developers to have more comprehensive skillsets, such as not only being able to build but also to maintain a platform.

Action plan

Our white paper ends with a range of initiatives from the City of Amsterdam in collaboration with the tech ecosystem, some of which launched earlier, and some as a direct result of the research conducted. Examples include a tech house providing a soft landing place for international talent, a global campaign combining recruitment and city marketing to attract tech talent as well as promoting the local ecosystem, tech re-educational institutions and the inclusion of secondary vocational education, and exploring possibilities to create a stronger connection with traditional education institutions.

These insights and initiatives provide input, and, to some extent, guidelines for Amsterdam as well as other tech hubs. We call upon local government, education institutions, the tech industry and politicians to join the aforementioned initiatives, increase collaboration with other parties, and start initiatives of their own. Joining forces will increase opportunities for tech talent and subsequently increase Amsterdam’s attractiveness – ultimately taking the local tech scene to the next level.

Tech companies in need of the following skills:

By: Jair Halevi en Sebastiaan van Lunteren

#slimgroengezond

With the insights gained with this research amongst tech companies in the Amsterdam Metropolitan Area, new innovative initiatives will be taken to fulfill the needs of these tech companies.