Nearly two years ago in June 2014 Chancellor George Osborne gave a speech outlining his “Northern Powerhouse” initiative: an attempt by the government to encourage the North to live up to its potential.

Since then, James Wharton MP of Stockton South has been appointed to lead the project, money has been pledged, devolutionary powers offered and a great deal of planning and talking done. We are still in ‘phase one’ of what could be a twenty to thirty-year initiative.

Andrei Maewski, co-founder & COO of GlobalHRU © GlobalHRU
Andrei Maewski, co-founder & COO of GlobalHRU © GlobalHRU

It was only two years ago when a Guardian journalist penned a controversial article claiming the North East was “Britain’s Detroit. That post-industrial image of neglect and despair is still one that lingers over the region, despite the fact that industrial wasteland has largely been transformed into retail parks, offices, science centres, apartments and academic facilities.

Beyond the rhetoric

And yet, the region still needs help to achieve its potential. The Northern Powerhouse is supposed to do that. The private sector was initially skeptical, but opinion is turning. Potential investors, including those from China, are keen to see a clear development plan before investing more in the region.

At a recent conference, former CBI chief John Cridland, now the chair of Transport for the North (a government-funded working group designing a new transport strategy for the region)  said this is a “new lens on an old problem … an enabler of rising living standards and aspirations for the people of the North … every person generating £5000 more in GVA.”

Subsequent budget statements have put funds into creating improved transport links, including work on major roads and the introduction of an Oyster-style ticketing system for buses and trains.

Transport is vital to improving the Gross Value Added (GVA) this region generates; connectivity must be physical and digital.

The digital advantage

The digital tech sector is currently booming in the North. Encompassing a region from Newcastle to Sheffield, Hull to Liverpool, over 200,000 people are employed in digital jobs. A Tech City report recently found that the sector employs 1.56 million people nationwide, generating a combined turnover of £161 billion, with a GVA of £87bn. Average salaries are £45,108.

London generates the lion’s share, but the North has been quietly building tech hubs for decades. Newcastle and Manchester are the two leading cities in this sector.

Why do digital tech companies set up shop in the North?

One reason according to Paul Rawlings, co-founder of Sheffield-based startup Deliverd, is that the “cost of beer is cheaper.” Not just beer; compared to London, living costs are 40 percent cheaper than in the capital.

Rent, mortgages, food, transport and entertainment are all more affordable, making the North ideal for the thriving startup and digital community that has made a home in this region.

And yet, as Paul Lancaster, soon-to-depart Community Manager of Tech North said in a BuzzFeed article: “Too many people, particularly young people, still believe that they have to move outside the region — London being the obvious example — to find ‘a good job’ and forge a career.”

Can the 'Northern Powerhouse' reverse this trend?

No region or city can retain people who want to leave, but the Northern Powerhouse can make a valiant attempt to support private sector investment with public money. Infrastructure and education will create and enable more opportunities.

For the tech sector to thrive, the next generation of school leavers and university graduates must be encouraged to consider local career progression, instead of moving away. Companies such as EPAM, a global technology solutions firm, are building an employer brand that embraces challenging projects and opportunities of growth backed by greater workplace freedoms and increased employee mobility.

Our experience at GlobalHRU has taught us that recruiting talent becomes easier when workplace freedoms and responsibilities increase in line with pay and benefits because current employees become your best brand advocates. When employer engagement comes from having genuinely happy staff, you never run out of new job applicants.

GlobalHRU organises 'unconferences' for HR managers, recruiters, and sourcers. Their next event is #hruManchester - Recruiting Creatives: March 17, 2016.

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