Flexible working has become the most effective way for employers to attract and retain tech talent, new research suggests, overtaking pay as businesses compete for workers with advanced digital skills.
The growing demand for expertise in areas such as artificial intelligence, data analytics and coding is reshaping hiring strategies, with employers increasingly prioritising flexibility over salary to secure candidates.
At the same time, technology skills are accelerating career progression, with younger workers moving into leadership roles earlier than traditional timelines.
The research, conducted by office and coworking provider International Workplace Group, suggests that employers are facing intensifying competition for talent as digital transformation reshapes the workforce.
More than two thirds of business leaders said attracting and retaining tech talent had become more competitive, while half reported a shortage of candidates with the right skills.
Flexibility overtakes pay in recruitment strategies
Hybrid working is now the most commonly used strategy to compete for tech talent, cited by 37 percent of organisations, compared with 35 percent that prioritise higher pay.
More than three quarters of business leaders said organisations offering hybrid working had a clear recruitment advantage, while nearly three quarters said flexible arrangements were important for attracting candidates.
Younger leaders were particularly focused on flexibility, with four in five from Generation Z and nearly as many millennials saying it was a key factor in recruitment.
Retention is also being shaped by these expectations. More than two thirds of leaders said competitive salaries alone were no longer enough to keep top talent, while workers under 30 ranked work-life balance and flexibility ahead of financial compensation.
Mark Dixon, founder and chief executive of International Workplace Group, said companies that failed to adapt risked falling behind in the competition for talent.
“The message from leaders — and particularly from younger generations — is clear: companies that do not embed hybrid working into their culture risk losing out in the race for tech talent and accessing the skills they need to remain competitive.”
AI skills drive faster career progression
Advanced technology skills are increasingly central to career development, with more than four in five business leaders saying they were crucial for promotion into leadership roles.
A significant proportion also said these skills were now valued as highly as, or more highly than, traditional university degrees, reflecting a broader shift in how employers assess talent.
This is contributing to faster progression for younger professionals. Nearly a quarter of organisations said they were appointing tech professionals under 30 into leadership roles earlier than expected, rising sharply among businesses led by younger executives.
Employers are also reshaping leadership teams to reflect these priorities, with many planning to increase the presence of technology and AI expertise at senior levels.
The influence of younger workers is evident in how organisations are adapting. Previous research has shown that many Generation Z employees are actively supporting senior colleagues with AI upskilling, with business leaders reporting improvements in productivity and performance as a result.
The data suggests that as competition for digital skills intensifies, organisations that offer flexible working and prioritise technology expertise will be better placed to attract and retain the next generation of leaders.
The research was carried out among more than 1,000 business leaders in the UK and US in January 2026.
William Furney is a Managing Editor at Black and White Trading Ltd based in Kingston upon Hull, UK. He is a prolific author and contributor at Workplace Wellbeing Professional, with over 127 published posts covering HR, employee engagement, and workplace wellbeing topics. His writing focuses on contemporary employment issues including pension schemes, employee health, financial struggles affecting workers, and broader workplace trends.
- William Furney
- William Furney
- William Furney
- William Furney
