Updated: May 3
In this new era of hybrid working, with tech companies taking on increasingly complex challenges, the physical surroundings need to provide the employee with solid support. One definition of a base camp is "a staging area used by mountaineers to prepare for a climb", (Wikipedia). I think that is a suitable description for the kind of physical place that, when optimized for overall well-being, will win the hearts and minds of the global, elusive, "work-from-anywhere" tech talent.
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As the future unfolds, we will most probably see employers offer many more work-sites, in various cities and legally compliant countries, to be more competitive. And this possibility for deeper personal growth in a foreign country will enhance the attraction factor for any job ad.
5 main reasons why more global tech talent will choose Spain as their base camp in 2022:
To check my assumptions before writing this, I had a chat with Spanish native José M. Perez, who has recently returned to Alicante, in the Valencia region. He has spent 10 years in Stockholm, in leading roles as a Software Engineer, for both Spotify and Facebook.
Tech talent demands remote work, and they can fairly easily move country
All the results from surveys, across the globe, point to the tough fact that employers looking for tech talent have no choice than to warmly embrace 85% of hours being remote work. Or, in some cases, even having to permit remote 100% of the work-time, to keep them around.
This sudden location-flexibility for the most sought-after tech employees affects Spanish CEOs of tech companies as well. Jaime Bosch, CEO, Voicemod shared why in a panel called "Key insights on going from startup to scaleup in Spain" at South Summit 2021:
"One of the biggest challenges in my sector is hiring the best talent in engineering. We're now facing a new era of full remote work and that makes the market for talent a global one. People want to work from wherever they want and now, they have the possibility of accessing almost any startup in the world."
"As we hire, we are competing with companies in Silicon Valley that are raising hundreds of millions of dollars. The salaries of Silicon Valley engineers and North American product managers are now competing with the salaries we have here in Spain. This competition for talent is for me one of the greatest challenges today." But can a higher salary alone still serve as the golden hook to get these most-wanted team members to sign an employment contract? Nah, I doubt it, considering the salaries are already A LOT higher on average for these kinds of jobs, in any country, including in Spain.
For the sake of argument, I am assuming that all wise tech employers will be offering close to 100% remote work and a competitive salary going forward. To stand out as the most attractive employer, I am convinced that a more holistic view is needed, thinking through what unique life-experience can be part of the package, more than just the job opportunity.
Related to Brexit and the likelihood that UK-based companies will want to establish a European base in a EU-country to easier attract tech talent, I asked Perez about just how competitive he thinks Spain is in this context. "I think Spain offers a great quality of life, and a growing tech ecosystem. We have a great public health and education system, an enviable climate, and a large pool of local talent. And, while we might think otherwise, the perception of the country abroad is really positive, which makes people want to move to Spain."
"When it comes to UK-based companies, they can find great talent in Spain, in a similar time zone, with a high level of quality and at a lower cost compared to peers in the UK and other countries in Europe."
The pandemic has made Spanish tech talent return, with international experience
Ten years away is a long time, and many things can change in that timeframe. I asked Perez how/if his own view has changed about the work opportunities in his home region Valencia: "Back in the day it was difficult to find companies building products or offering services in Spain beyond the large and traditional behemoths, and I got the opportunity to move to Sweden and join Spotify."
"Fast-forward everything has changed. There are multitude of start-ups with great ideas, many VCs and funding options. And there is experienced talent which has built and scaled up companies abroad and they are now coming back to the region."
His thoughts reflect what I have heard from other Spanish connections, with similar professional profiles. They send me messages about their plans to return to Spain after many years in leading-edge tech locations, including Singapore, New York and London. I received these types of messages prior to the pandemic as well but the health crisis, complete with all kinds of restrictions, has accelerated this type of decision.
"My choice was a combination of personal matters and professional ones. My family and closest friends are in Spain, and as companies are more open to remote-work setup, it represented a good opportunity to come back", comments Perez.
Spain now has 4 strong choices of tech hubs, depending on personal preference
There are many rankings and lists, which suggest where you might find the "best" tech hub. This is often based on the amount of VC money flooding into the ecosystems. The Global Startup Ecosystem Report 2021, by Startup Genome and the Global Entrepreneurship Network has crunched data from over 3 million companies across 280 ecosystems worldwide. It states that the top 5 performing hubs in Europe are London, Paris, Amsterdam, Stockholm, Berlin and it appoints the top 5 regional challengers to be Copenhagen, Barcelona, Estonia, Madrid and Zurich.
"The emerging ecosystem ranking is a weighted average of the following factor scores:
Performance: 45% (valuations and exits), Funding: 30%, Market Reach: 15%, Experience & Talent: 10%", the report states.
Kudos to them for actually stating their Methodology in detail! I am just surprised they choose to give such little (10%) weight to Talent. It might be because quantifiable data to measure actual access to tech talent is more difficult to identify than pure money statistics.
I did my own humble attempt on social media to identify the favorites and asked: "To establish yourself as a tech professional working mostly remotely, which region in Spain would you choose as a base?" This poll got 56 + 5 support votes in the comments = 61 votes, so it is by no means statistically viable, but it does provide food for thought. For transparency, the majority of the voters are second and third connections of mine, and have either Spanish or Swedish names.
Madrid: 21 votes
Valencia: 20 votes
Barcelona: 9 votes
Malaga (incl. Marbella): 9 votes
Santander/Cantabria area: 2 votes
Since I am based in Valencia, that hub was bound to get many votes. What I didn't expect though, was for Barcelona (the most mature tech hub in Spain) to get so much competition, especially since roughly 50% of the votes came from Non-Spaniards.
Malaga, in the Andalusia region, has been getting more attention lately thanks to the epic exit by Freepik to Private Equity firm EQT in 2020 for €250 million (the general assumption).
To be fair, the global attention on Malaga started already in 2012 when Google bought the Cybersecurity startup VirusTotal based there, (and still is.) In early 2021, Google strengthened its presence in this Must-Watch hub in Andalusia as they announced a Cybersecurity Center, along with an investment of more than 650 million dollars, over five years, in Spain.
Depending on personal preference, I would argue that Spain has not just 2, Madrid and Barcelona, but really 4 great options for tech hubs to choose from, and the Bilbao area, in the North of Spain, could very well be leapfrogging one of these hubs in the near future. Spanish tech talent are (finally) recognized thanks to the maturing tech ecosystem
I first interacted with the Spanish tech community in 2017. Today in 2021, there is a notably stronger awareness of the value they bring, as a result of the maturing tech and innovation ecosystem in recent years. Perez makes sure to emphasize this point: "We shouldn’t forget that there is a huge amount of local talent that has paved the way for many years to change the startup ecosystem. VC and angel investors are realizing the potential of many of these companies, and are helping accelerate them and put Spain on the tech map."
From my perspective, Spanish tech talent still seems to have lower self-confidence in general when it comes to their skills, in comparison to their Northern European counterparts. I asked Perez about the possible reasons for this personal observation.
"I have worked in international companies with folks from many different backgrounds, and never felt Spaniards were under-skilled. Quite the contrary, my Spanish colleagues have been on the forefront of some of the largest tech challenges and nobody has put into question their abilities. Rather than the skills, I think the main difference is the mindset."
"In Spain, many people dream of having a permanent job for their whole life, working for the public administration, that gives them stability. Many of those working in tech do it for large consultancy companies that are usually stable, with a well defined career path and have plenty of customers from public institutions through banking."
I agree that the Spanish society, in general, is still too skeptical of entrepreneurship and fully-digital products by tech startups. This is at the same time, as they are submerged in the biggest - and very much forced-by-the-pandemic - digital transformation in the country's history. Thankfully today there are numerous success cases created by Spanish tech founders to read about, to learn from, and be inspired by, completely changing the perception of what a dream career is and also boosting the over-all self-confidence in the local tech community.
With higher self-confidence comes higher ambitions, something that Juan Urdiales, CEO, Jobandtalent commented on in the previously mentioned session at South Summit 2021:
"I think there's a big change in ambitions, especially with the new founders in Spain. Years ago, we were starting companies to be sold for €20m, €50m, €100m. Now founders are creating companies and aiming to sell for at least €1billion."
"We're probably 20 years behind the US and 10 years behind the UK, but it's happening. The numbers are very similar to what those countries had some years ago." My guess is that these higher price tags on Spanish tech startup exits, will also very soon translate to higher salary demands from the local talent. This leads us to the next point.
There is a surge of International corporates opening tech hubs in Spain
For an international company with its HQ in the US, the UK and overall in Northern Europe, the main interest in looking for tech talent in Southern Europe and Eastern Europe has historically been the lower labor costs. I am just telling it like it is.
The mentioned Google tech center in Malaga is just one of many American tech corporates having seen the value of establishing larger development hubs in Spain. They are known to offer very competitive (i.e. much higher) salaries in comparison to the Spanish employer.
Today though, there is clear evidence that the higher demand for global tech talent is finally pushing up local salaries in Spain as well. So while the factor of paying lower tech salaries for sure supports the argument of choosing Spain that is not the main reason anymore.
An interview (Oct, 2021) with local expert David Bonilla in Spanish La Información, claims that for the newly graduated "tech junior", Spanish Fashion giant Inditex now offers €30,000 in entry salary, plus a series of incentives.
Although the American multinationals were quicker to realize the opportunity of establishing a Spanish tech base, many European corporates are now catching up and doing the same. One example (May, 2021) is the Swedish Fintech unicorn Klarna. In their announcement, CEO Sebastian Siemiatkowski made sure to emphasize the available skill sets:
"(...) we need the best engineers to deliver a seamless product experience for our customers. That’s why we’re coming to Madrid, one of Europe’s emerging tech centers.”
In 2022, I sense that Spanish tech talent will stand taller and more confident, as they welcome more of their international peers to work from Spanish ground to live and thrive - and to grow the lucky company that has managed to sign them!
EDIT Jan 15 2022:
Before the year 2021 ended, the long-awaited "startup law" reached an important milestone as Spain’s government agreed on the details of the draft. Next step is for Parliament to approve the law which is said to happen at the earliest "first half of 2022".
TechCrunch wrote an overview of what can be expected, overall "important measures to cut red tape and remove bureaucratic obstacles for founding and investing in startups in Spain."
Some of the concrete examples given:
Raising the tax exemption on stock option income from €12,000 to €50,000 per year.
Delaying taxation of stock options until the date of settlement — either when the stocks are sold or if the company goes public.
Streamlining the procedures for setting up a company into a single step that can be completed online, without needing to pay a notary or registry expenses.
Once the law becomes effective in 2022, it is likely to further boost the interest of investors and founders from other parts of the world to set up their base camp in Spain.
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