In 1991, Oracle was virtually a startup in the UK with 700 people. The average age was 26. Nearly 25 years on and Oracle now has some 26,000 people across the EMEA region, and the average age of the workforce is 46.
Is this what happens to start-ups when they become grown-ups? How does it affect their culture and ability to compete for new talent? And what can legacy tech companies do about it?
Vance Kearney, VP for HR across EMEA, shared this story at the recent Talent Leaders Connect event in Manchester (May 2015). So how had it come to this? ‘Managers tend to recruit in their own image’, he said. As the 26-year-olds have got older, so too has the average age of new recruits (now 39). They tend to favour experience over raw talent, erring on the side of caution when recruiting.
But is it simply a recruitment issue?
Older tech companies will have a workforce that have grown with them (on average employees have been with them for 6 years compared to 1.1 in younger tech businesses). The new tech companies will also attract a younger workforce because it is new and innovative.
A recent Payscale Inc report showed that Oracle is not alone in having this problem. Their report (US-focused) showed that many of the legacy tech companies had older workforces (albeit not as old as Oracle’s in the UK):
This compares to a younger workforce in the newer tech businesses:
(In many ways, the business that sits between the two is Apple (average age 31), which is nearly 40 years old yet continues to reinvent itself.)
So if we take the premis that many of the older businesses need to attract a younger workforce who have the new tech skills to take them forward, how do they do it?
Culture – too many start-ups turn into the Dads they never wanted to be. So we see companies trying to get down with the kids. For example, it’s reported that Accenture have ‘Google-ised’ one of their floors at Fenchurch St to make it more appealing to a younger tech crowd (free drinks, table football, beanbags etc.). But should it be more pervasive than that, focused on the whole business?
Development – this, as Vance points out, is a trump card for legacy businesses like Oracle. They have the resources to help tech talent to develop skills and build knowledge, much quicker than they might at start-ups. But importantly, it’s got to be ‘social, mobile and insightful’.
Story – Tech start-ups have a great story to tell. They are disruptive, and have a mission to bring something new and different to market. It’s a story people buy into. But what’s the story for older tech businesses? How are they trying to change the world or give talent a reason to believe? Laszlo Bock was recently on Radio 5Live saying that even if Google took away all the bean bags and football tables, people would still want to work there because they believe in the purpose of the business. How many other businesses can say that?
Enterpreneurship – Finally, Vance talked about how many alumni of Oracle had gone on to set up their own businesses (and then been bought by Oracle!). The appeal for young tech workers to go to a start-up is a chance to build something. But imagine if they could do that within a place like Oracle or Microsoft, with all the resources available to them…Now there’s a thought…