London tech companies have a hard time hiring as Google, Apple and Facebook expand

LONDON – Technology companies in London are finding it increasingly difficult to hire technology workers as Silicon Valley technology giants increase their operations in the UK capital.

Major U.S. technicians, including Google, Facebook, Amazon, Apple, Microsoft, Palantir, and Twitter, now employ tens of thousands of technology workers in London offices, and some have major expansions underway.

Oscar White, CEO and founder of venture capital travel start-up Beyonk, told CNBC that the expansions made recruiting more difficult, adding that they have caused inflation, wage expectations and a shortage of technology resources. .

Alphabet, Google’s father, is building a vast complex at King’s Cross with enough space for up to 7,000 Google employees and about 1,000 DeepMind professionals. A few miles away, Apple plans to relocate 1,400 employees to a new Apple campus at the Battersea power plant. Although versions have been maintained by coronavirus blockages, they still go ahead. Elsewhere, Facebook and Amazon have recently opened large multi-storey offices in London.

Facebook currently has 266 sites open in London, according to its professional website, while Google has 172 and Apple has 103. Amazon is looking for 162 software developers, 143 solution architects and 72 technical managers in the city.

“Software developers are in greater demand than ever before, which is likely to get worse as more technology companies’ campuses grow in the city, ”White said. “For emerging companies with small budgets, which rely heavily on technology resources as a key facilitator for growth, this poses a real challenge.”

Twitter declined to comment. None of the other U.S. tech giants mentioned responded immediately to CNBC’s request for comment.

Many emerging companies in London will struggle to attract software developers if they offer salaries below £ 80,000 ($ 110,000), according to White, who said experienced developers can now get salaries of up to £ 120,000 a year.

Tom Richardson, CEO of the money management app Lumio, told CNBC it’s “so hard” to find the right people.

“We’re a start-up and we only have one initial round and we can’t attract developers or big product managers,” he said. “Initial wages are crazy.”

To fix the problem, Richardson is considering moving his business or hiring more remote workers, but he said they both have their risks.

Another CEO of a London-based technology company, who asked to remain anonymous over concerns that it may appear his company was struggling to recruit, told CNBC that large U.S. technology companies have tried to steal several members. of its staff in recent years. They said an employee’s response was “when Manchester United knocks on the door you have to answer”.

The American technology firm, which the CEO did not name, offered the employee the same salary, but a much stronger overall package that included stock options and a car bonus. “We ended up retaining them, but we had to make them worthwhile and give them an offer they couldn’t turn down,” the CEO said.

Amazon had tried to steal more from the London tech firm’s employees than any other American tech giant, the CEO said, adding that Amazon has targeted several project managers and account managers.

In an attempt to ensure the company retains its best people, the CEO said they had developed a “more comprehensive benefit package” that included participation options for high-performing staff and career advancement plans.

Venture capitalists and technology investors have a relatively broad view of the hiring landscape as they are involved in multiple emerging firms.

Simon Menashy, venture capitalist at MMC Ventures, which has invested in dozens of new companies, including package delivery firm Gousto and travel start-up Love Home Swap, told CNBC that Silicon’s new advanced sites Valley in London “definitely contributed to wage inflation,” adding that large technology companies compete with local companies for engineers.

But London start-ups also competed with other city start-ups for some workers, according to Menashy.

“When our portfolio companies lose candidates to senior executive talent it’s for other emerging companies and for large companies, not for large established technology companies,” he said.

Eze Vidra, a former Google Ventures investor who now works as a managing partner at Remagine Ventures, told CNBC that it’s harder for London-based start-ups to keep good employees, as they are “attracted by packages and benefits every time larger ”technology firms and better-funded companies.

Meanwhile, Ian Hogarth, an angel investor who sold his music company to Warner Music Group, told CNBC he was not convinced Silicon Valley expansions would make it difficult to hire London’s emerging companies, and added that there are some factors at stake. .

Hogarth argued that the increase in remote work has allowed companies to expand without having everyone in one physical office. For example, Hopin, which is headquartered in London but is completely remote, has climbed from one to 800 people in two years, Hogarth said.

While Brexit may have made it difficult to hire companies from London and the rest of the UK, the growth of the UK technology ecosystem means there is more experienced talent available overall than before, according to Hogarth.

Alice Bentinck, co-founder of new investment firm Entrepreneur First, told CNBC that Silicon Valley companies are stepping up competition in London in the short term.

“But in the long run I don’t think it’s bad,” he said. “It’s a sign that London’s tech ecosystem is thriving.”