UK tech startups are still struggling to find the right people to grow their businesses, according to research published Thursday by Silicon Valley Bank.
The bank, which has a range of financial services tailored towards technology and life science businesses, said 57% of 929 survey respondents cited access to talent as their most important public policy issue.
Silicon Valley Bank’s clients have included the likes of Twitter and Groupon. In the UK, startups such as predictive keyboard app SwiftKey and home-sharing platform onefinestay use the bank’s services.
Access to talent has been cited before as the main public policy issue facing tech startups in the bank’s “Startup Outlook Survey UK,” which is now in its fourth year.
The latest survey found that 95% of survey respondents — predominantly technology leaders (68%), but also leaders at healthcare companies (15%) and other companies (17%) — believe it is challenging to find people with the right skills to grow their business, up from 89% in 2013.
The UK faces a skills crisis with the industry experiencing an annual shortfall of 40,000 graduates with backgrounds in science, technology, engineering and maths (STEM) subjects, according to a Campaign for Science and Engineering (CaSE) report on Improving Diversity STEM.
Speaking at Silicon Valley Bank’s new London office, Phil Cox, head of EMEA and president of Silicon Valley Bank’s UK branch, said it’s “really hard” for fast-growing startups to find the right people. He cited ecommerce startup Brandwatch, saying: “For them, the biggest thing is to get the right people. As their business really grows, it constantly outpaces the abilities of the people.”
Cox went on to explain how 72% of UK startups believe leaving the EU will have a negative effect on their business, which offers a considerably larger talent pool than UK alone. He highlighted how 70% of fashion startup Farfetch’s employees aren’t British. “It’s not clear what would happen to immigration policy [if Britain were to leave the EU],” he said. “There’s a lot of uncertainty around this topic.”
Half of the survey respondents said they’re looking for sales skills, while engineering and technical skills, product development, and marketing skills are also going to be in demand in 2016. 48% said a lack of access to talent made it difficult to scale operations, while 42% said it inhibited product development, and 29% said it inhibited revenue growth.
Dan Gandesha, CEO and founder of Property Partner, a crowdfunding platform that allows people to invest as little as £50 in residential properties, said he hired a head of talent relatively early into his company’s life cycle, adding that they’re one of the best-paid people in the company.
Gandesha also said the UK specifically lacks the high-quality product development people that the US has. He has tried to hire US citizens before but said it is very challenging. “It’s a lot of effort to get permission to hire from outside the EU,” said Gandesha, who is hiring aggressively after raising a £16 million Series B round. “It’s important [for the government] to make it easier. It’s not easy today.”
Other public policy issues facing UK tech startups include international trade (40%), cybersecurity (29%), consumer privacy regulation (28%), and employees vs. independent contractors (24%).