Displaced tech workers look to other industries

The vast majority of tech workers who changed roles between January 2021 and July 2023 have moved into a different industry, according to LinkedIn data based on members who activated the "open to work" option on their profiles.?

LinkedIn's new Workforce Report shows that almost two thirds of tech workers (63.5%) moved from tech to another industry when they switched jobs, while just over a third moved from one tech firm to another in the industry. This is based on job switchers starting their new positions between 2021 and July 2023, activating open-to-work status between their previous and new positions.

It's worth noting that these workers are people who worked at a tech company, so the figure includes staff in HR, legal, finance and other departments, as well as software developers, engineers and other tech professionals.?

"The days of sky-high paychecks and exciting benefits are dwindling as big tech starts to practice its own version of austerity; the companies that were once the Shangri La of tech workers now resemble any other corporate business and have a reduced appeal," James Caan CBE an, a recruitment expert and a former investor on Dragon's Den, told LinkedIn News.

"And perks aside, the pace of work within the tech sector is typically intense and burnout is a big problem. Together with bad layoff practices (for instance, staff finding out they don’t have a job when they turn up and their badge doesn’t work, or via a 4am email), many tech workers are opting to pivot and take their sought-after skills to a different sector – which is good news for these sectors."

Turmoil in the tech sector

Tens of thousands of tech workers have been laid off in the last couple of years.?

In 2022, 1,060 companies laid off 164,744 people worldwide, according to layoff tracking website layoffs.fyi. The situation has deteriorated this year, with 225,365 laid off by 933 tech firms.??

At the big tech firms, there have been big redundancies: Facebook -owner Meta , 谷歌 , 亚马逊 and 微软 (LinkedIn's parent) have all announced plans to cut thousands of roles. Elsewhere, Twitter (now X) announced it planned to lay off 50% of staff following Elon Musk's takeover.

While many of the big tech layoffs happened in the US, the UK has also been impacted because London is a major outpost for these firms, with King's Cross in particular being a significant hub.?

Beyond big tech, some of the UK's homegrown tech darlings have also made significant cuts. Last March, Cambridge chip designer Arm said it planned to lay off 1,000 people, while electric vehicle startup Arrival said in January that it was cutting half of its staff, which was around 800 people.?

What workers want

One recruiter in the industry told LinkedIn News UK the key candidate drivers right now for tech workers are stability, flexibility and a company that looks good on a CV.

"We are seeing more candidates asking for a solid commitment of what ‘hybrid’ actually means – is it office first hybrid, remote first hybrid – and how are they supported? How are decisions being made based on the new working patterns?"

"And a big challenge with many leaving larger tech firms is the need to reset salary expectations after the post covid tech hiring boom/wage inflation," they added.?

A large proportion of tech workers who still have a job are ready to leave. Some 77% of UK tech workers are unhappy with their jobs and have looked for another one in the past six months, according to a Gartner study of 1,000-plus tech professionals that was published in April.??

Migration to professional services and finance

LinkedIn data shows that the UK's tech "exodus rate" – defined as the percentage of displaced workers leaving the industry when starting a new position – has been gradually increasing, from 62.5% in January 2021 to an 18-month high of 65.7% in May 2023, with notable peaks in September 2021 and March 2022. When it comes to where these workers are moving, the picture is relatively split: the largest proportion (36.4%) of job switchers have moved from one tech firm to another this year.?

Caan said there are reasons why many tech workers choose to stay in the field, noting that culture and perks are key factors.?

"Top tech companies famously have unprecedented staff perks, with novelty areas such as indoor go-karting and breakout rooms par excellence – and they go to great lengths to foster team spirit," he said. "These attitudes have filtered down into the wider tech sector, with company culture being a huge part of a tech organisation’s appeal to talent."

For those choosing to move out of tech completely, professional services is the most popular destination, with 21.5% of tech job switchers moving to this industry from January to July this year. Capita , 凯捷咨询 , 塔塔咨询服务公司 , 普华永道 and 德勤 are among the most popular destinations for tech workers moving into professional services.?

Some 8.6% of people in the tech industry have switched to financial services in 2023, landing gigs at legacy banks such as Lloyds Banking Group , J.P. 摩根 and Barclays , as well as neo-banks including Revolut and Monzo Bank . Elsewhere, 6.5% of tech workers who switched industries moved to manufacturing, with JLR and BAE Systems proving to be the most popular firms.?

Approximately 4% of displaced tech workers joined an administrative and support services firm, while 3.9% of tech workers joined an entertainment industry.?

From big tech to small startups

It's not just a move between industries that's evident: many people are making moves to companies of significantly different sizes. The Workforce Report data shows that the share of displaced workers who have moved from a tech firm with over 10,000 employees to a smaller company in a different industry has been rising recently.?

Notably, in July 2023, more than half (55.5%) of displaced workers who left large tech firms in the UK moved to a smaller company in a different industry, while only 4.6% moved to another large tech company.

Part of the reason behind this could be people looking for a change, but there's also appeal for smaller companies in these types of hires. Oscar White , CEO of travel ticketing startup Beyonk, The Visitor Experience Platform , told LinkedIn News that there are a number of reasons some smaller companies like to hire people from tech giants.?

"Hiring people from leading firms can offer the opportunity to hire staff who’ve been invested in with great training and leadership," he said, noting that they often have experience of knowing what "best practice" looks like.?