Desperate to attract top talent during the Covid pandemic, tech start-ups and scale-ups ramped up their salary offers and perks, often to candidates with minimal experience.
But as the dust settles and the use of AI begins to ‘shift’ business priorities, many firms are feeling the ‘fallout’ as underprepared managers and weak people processes surface. The “war” for tech talent hasn’t disappeared – it has just shifted.
That’s the view of Ruby Melling, founder of Manchester-based people consultancy Talentloop, who spoke to Prolific North as part of our ongoing GRAFT series exploring the future of Northern tech.
READ MORE: ‘It feels like there is no pipeline’: Inside the North’s brewing tech talent gap
“There was a real war on talent, the demand was so unbelievably high to get these people through the door” Melling tells Prolific North.
“We’re now seeing the fallout. There are brilliant people on the market, but companies massively overhired. And now they’re being forced to make every single role count.”
With over a decade spent working in the recruitment world, Melling watched as the demand for tech roles boomed back in 2020. “I was placing candidates with a year’s worth of experience on £90,000 salaries,” she says.
“Cultures were decimated, and processes went completely awry,” she says. “So many people were brought into the wrong roles.
“Now, with rising employment costs and AI changing the hiring landscape, everyone wants a return on investment. The war on talent is still there but it has just changed – now it’s all about high performance.”
For Melling, the key to sustainable growth lies in building from the inside out.
“The pandemic saw 10 years of innovation crammed into 18 months. Now we’re catching up – and realising just how many foundations were skipped.
“It has led to the onset of retention issues when it comes to hiring managers, they are managing people but have no experience.”
“Traditional recruitment models are outdated…”
Frustrated by what she saw as a ‘broken system’ in the recruitment industry, Melling launched Talentloop in 2022 with co-founder Victoria Bond.
“I loved my job in recruitment but I hated the industry,” she says. “I’m a firm believer that if you put people before profit, you’ll end up with happy customers, happy people — and happy profits.”
Now, the duo’s goal is to help tech companies build people strategies that last.
“Traditional recruitment models are outdated. We embed ourselves in a business, and look at everything from hiring to onboarding, leadership, culture and retention.”
The pair work with fast-growing tech companies for up to around 18 months, often uncovering deeper structural issues.
After salaries ballooned and teams expanded rapidly during the pandemic, a key concern is how many managers were promoted without training or support in what Melling refers to as the “squeezed middle”.
“Every time a company adds 10 to 15 people, everything changes from processes to communication. And yet the people managing that change are often underqualified, overwhelmed without support, with no clear vision coming from the founders.”
READ MORE: How British tech investment is powering the job market in one US state – but not here at home
The pandemic may have broken down barriers around remote work, but there are still some regional disparities between the North and South.
In the South, Melling says some companies are going to extreme lengths to secure early-career talent.
“A lot of companies are having to buy apartments and are paying for top graduates to live in them until they land on their feet and can afford rent. It’s insane.”
Up North, the creative and digital talent pipeline might be “one of the best” but it is “not being nurtured enough”, especially when it comes to talent at the top.
“I worry about senior leadership,” she says. “There are phenomenal individuals, but many don’t have the right tools or vision to lead. We need to nurture talent better – not just at the entry level but all the way through to the c-suite.”
Without solid employee training, planning and processes in place, she warns tech firms will end up spending “thousands on recruitment fees” yet will still face retention issues and a misalignment of culture.
“In most start-up or scale-up pitch decks, very rarely do they focus on people. Now, businesses are starting to understand the importance of having the right people process in place otherwise it will manifest into problems across every element of the company.”
Talentloop has ‘doubled revenue’ year-on-year and recently secured investment from entrepreneur Luke Pilfold-Thomas, one of Melling’s first clients, who has since joined as a non-executive director.
As around 32% of traditional recruitment agencies have shut their doors in the past 18 months, Melling believes this figure reflects a sector that’s failing to adapt to the growing needs of businesses.
“There’s still a place for recruitment agencies,” she says. “But the way business is done now is just different. The Covid pandemic reset everything.”
