Hybrid working has overtaken salary as the main way UK firms are competing for tech talent, according to new research seen by City AM, as skills shortages intensify across the sector. Data from International Workplace Group found 37 per cent of businesses now cite hybrid working as their primary strategy
Saskia Koopman
Tuesday 14 April 2026 10:48 am | Updated: Tuesday 14 April 2026 10:49 am
Hybrid working has overtaken salary as the main way UK firms are competing for tech talent, according to new research seen by City AM, as skills shortages intensify across the sector.
Data from International Workplace Group found 37 per cent of businesses now cite hybrid working as their primary strategy to attract talent, ahead of competitive pay at 35 per cent.
Over three quarters, or 78 per cent, of business leaders said firms offering hybrid work have a clear recruitment advantage.
The findings come as UK tech companies face increasing pressure to secure employees with skills in areas like AI and coding.
Separate figures from accountancy firm RSM show applications from overseas tech workers fell 11 per cent last year, adding to concerns around talent shortages in one of the UK’s fastest-growing sectors.
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Over two thirds of leaders admitted that retaining tech talent is more competitive now than ever, while half reported a current shortage of candidates with the right skills.
Hybrid working has also been seen as a key to retention, with around 68 per cent of business leaders saying salary alone is no longer enough to keep skilled staff.
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Meanwhile, 72 per cent said flexible working is important when attracting new hires.
Among young workers, flexibility is a higher priority than pay, with 42 per cent of under-30s ranking work-life balance and flexibility as the most important aspect of company culture, compared to 30 per cent who prioritise salary.
The research also shows growing demand for advanced tech skills in leadership roles.
Over four in five business leaders said expertise in AI, data analytics and coding is now important for promotion into leadership positions, with 22 per cent saying these skills are valued more highly than university degrees.
Elsewhere, 23 per cent of firms said they are promoting tech professionals under 30 into leadership roles earlier than traditional career timelines, rising to 45 per cent among Gen Z-led businesses.
Tech skills are also becoming a key factor in recruitment, as 31 per cent of employers see them as important as formal education when evaluating potential candidates.
The numbers come as the public sector looks to position the UK as a global AI hub, including plans to fast-track visas for high-skilled workers.
Read more Britain’s tech sector ‘massively punches above its weight’
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