It has been an interesting year to say the least across the Technology, Media and Telco industries. Here is a breakdown of the impact that Covid-19 has had in these sectors.
London has raised more venture capital investment than Paris, Stockholm, Berlin and Tel Aviv combined, with a total of £4.2billion. Over the past 12 months, UK tech has been built on a decade of consistent growth in which more unicorn tech companies were created than in any other country, whilst this may have strained London tech firms due to Covid-19, the Technology sector appears to be crucial to helping the U.K. economy bounce back quickly after the pandemic. The health tech sector is very much in the spotlight currently.
Initially, firms such as Deliveroo and Citymapper felt that they had fallen through the cracks of the more-than £330 billion-pound Covid-19 rescue package pledged by the government. The young, and in many cases start up companies have claimed that they did not qualify for corporate finance loans, as mature credit ratings and high profits are required, however some of these companies were categorised as too big for small business relief.
From a Reward perspective a number of companies have taken the route of Executive staff not taking salaries for example, Monzo CEO Thomas Blomfield, said that he would not be taking a salary for the next 12 months with a number of employees at the firm also taking voluntary furlough. Starling Bank also announced that they were putting their staff on furlough but topping up their salaries to 100% and although Revolut did not furlough any staff, the co-founders were just one company where senior staff members are not taking salaries in a hope to bolster the business. This is the general theme across most tech companies.
Telco firms such as BT, Verizon and Virgin Media have raised salaries and in some instances have expanded their workforce contrary to the high level of job losses in other sectors. Fortunately, Telco has remained relatively stable in financial terms due to the positive impact and a much higher demand for broadband, mobile and telephone services which soared as a direct result of millions of people now working from home.
BT gave stuff such as engineers and call centre workers a 1.5 per cent pay rise in the summer, in addition a £500 bonus in the form of shares agreed last year which will still be paid, however like the technology sector managerial-level roles have been frozen from a salary increase. Virgin has followed suit with salary increases by an average of 2.2%.
Key opportunities for telecommunication companies lie in the enablement of mass working from home, driving capacity upgrades and hence revenue, and the accelerated transformation of traditional to digital business models across all sectors. Hosting providers are similarly offered opportunities in this new “digital normal”, such as capitalising on the significant demand increase for hosting capacity as businesses move their workforce to digital, working-from-home models and accelerate the shift to cloud IT which should in term create more hiring and growth in businesses over the next 12 months.
The media industry, has utilised different cash conservation methods. Firms have been doing what they can to mitigate the impact of Covid-19 by implementing changes to discretionary spending and reducing employee hours. For example, Jean-François Decaux, chairman of the executive board and co-chief executive of JCDecaux, explained that the company have cut discretionary spend and capital expenditure, introduced temporary unemployment measures, reduced hours and implemented a voluntary salary reduction scheme.
In conclusion, the key outcomes across the sectors is the taking up of the furlough scheme, the freezing of pay and a push back to promotion-based salary increases. Employee Benefits remains a key area of thought, with a lot of tech firms offering additional mental health support and childcare support to employees who are working from home, wellbeing will continue to be a key driver over the next 12 months. In an article written by Willis Towers Watson Companies within the Tech industry which generate revenue from connecting people, working remotely and/or providing entertainment remotely have seen massive growth. This industry growth should in theory translate to higher salary budgets in 2021 for companies which looks promising for the next 12 months.
It has been great to be reconnecting with my network and it has been insightful to hear what has been happening in the market throughout the year. The Reward market is picking up as we enter year end and particularly from an interim perspective where businesses still require those with extensive project experience. I am keen to connect with any Reward and Analytics professionals in this space so please do reach out to me at email@example.com