What do tech scandals mean for SMEs?

Fake Dictionary Dictionary definition of the word scandal.

From data breaches to gender biases, the tech industry has seen scandal after scandal make news headlines across the world in just the last year.

In light of this, we surveyed 500 Australian tech workers to see how the slew of recent scandals in their industry has affected their attitudes towards working in the sector.

Interestingly, we found that those who worked in SMEs were particularly averse to controversy. When asked if they would be more interested to work at a company that had experienced a scandal, only eight per cent of respondents working for an SME agreed, as opposed to a third (33 per cent) of respondents who worked for larger organisations.

What does this mean for technology-focused small businesses?

Attracting new talent

Small businesses will already know the difficulty of trying to attract and retain tech talent in today’s highly competitive environment. So when businesses experience controversy, the challenging task of recruiting tech talent becomes near impossible. Nearly half (44 per cent) of the tech talent we surveyed said they’d be less interested in applying for a job at a company that had faced public scandal.

However, with knowledge of what “puts off” tech talent, small business can effectively adjust their recruitment process to attract great candidates. Highlight the fundamental elements that make your business an ideal place to work. Whether you have an equal pay policy or a strong values-led culture, know what your company’s selling point is when communicating to prospective employees. If a competitor or big player was recently affected by controversy, emphasise policies that makes your business different.

The biggest turn offs for tech workers

Controversies that have the greatest impact in driving employees away are gender-based, with 56 per cent of respondents stating they would likely leave if their company faced a scandal relating to sexual harassment, pay disparities or bias in hiring.

Tech workers were also more likely to be turned off from companies that experienced controversy around the technology, such as incidences of data breaches and product failures. 44 per cent of respondents stated they would likely resign if this were to occur at their workplace.

Retaining staff in tumultuous times

The good news for SMEs is that controversy does not necessarily mean staff will be dropping off in droves. Our survey found that the way leaders choose to communicate plays a huge role in informing staff’s opinion about the reputation of the company and industry they work for. While 21 per cent of respondents said they would leave their company if it were to be involved in any type of public scandal, 83 per cent of respondents agreed that they’d be more likely to stay if their company was transparent about the scandal and their attempts to rectify the issue.

Response time when dealing with a public scandal is also critical to a business’ success in retaining staff, with almost nine in 10 (87 per cent) of tech workers agreeing that if their company were to respond to a scandal quickly through fixing errors and communicating internally and externally, they’d be more likely to stick with the business. Therefore, small-business owners going through a crisis need to be active in ensuring that they deal with the issue quickly, and are transparent in their messages to staff and customers.

SMEs have the ability to be nimble in the face of crises and can quickly implement change and new policies. They are in a unique position to learn from the mistakes of others, as well as recover quickly from a public scandal, so long as leaders remain transparent and communicate effectively and efficiently.

Ricky Fritsch, Managing Director, Indeed Australia