Tech talent shortages are nothing new. The global tech industry has been lamenting a lack of talent for a long time and the imbalance between supply and demand has led to IT professionals enjoying quite stellar salary packages. But the talent squeeze has
been tightening in recent years and is set to get much worse in the coming decade if industry forecasts are to be believed.
The so-called ‘great resignation’ brought on, in part, by the Covid-19 pandemic has exacerbated the situation. According to a survey carried out last summer by
TalentLMS and Workable, 72% of tech employees in the US were considering leaving their jobs in the next year. Some 40% of them cited limited progression opportunities as a key
reason.
Other common causes included rigid working hours, a lack of remote working options, and a lack of appreciation on the part of the employer. That last point was reflected in the finding that 85% of respondents felt their company focused more on recruiting
new talent than investing in existing staff. Burnout came into play as well, with 58% citing it as a factor.
In August 2021, educational organisation Udacity commissioned Ipsos to carry out research into the mismatch between available tech talent and the needs of fast-growing businesses. Over 2,000 managers and more than 4,000 employees across the United States,
United Kingdom, France and Germany were surveyed for the
Talent Transformation Global Impact Report.
The report finds that a glaring gap in job-ready digital talent is causing digital transformation efforts to stall with businesses becoming frustrated because they don't have a way to access the talent they so desperately need. Rampant demand means it's
difficult to hire and retention is low, the report reveals.
The research shows that nearly 60% of employers say that not having enough skilled employees has a major or moderate impact on their business. French and German employers are slightly more likely to say so than those in the US and UK. In addition, 50% of
employers report that digital transformation initiatives are held back due to lack of employee adoption or engagement.
Talent shortage
These results are borne out by another survey conducted by the
World Economic Forum which found that 27% of the small companies and 29% of the large ones acknowledged that they do not have the necessary talent for digital transformation. Even though the pandemic has accelerated digital technologies, this only further
increased the tech gap.
Looking to the future, a
research report published by Korn Ferry last year forecast a global tech talent shortage of 4.3 million workers – 59 times Alphabet’s global workforce – and resulting in an unrealised output of $449.70 billion.
The report points out that technology underpins all other sectors of the global economy, but its advancement could be stalled by serious talent problems. “While the digital revolution often seems unstoppable, it could be about to hit a wall,” it notes.
A good deal of the shortage is based on simple demography. Many European nations have had low birth rates for decades, as has Japan. In the United States, the population bulge produced by the baby boom will have moved into retirement by 2030, while the younger
generations expected to replace them will not have had the training to take many of the high-skilled jobs left behind. And even if they do get the training, there is still likely to be a shortage in numbers.
That deficit could see India become the world’s tech leader by 2030, the Korn Ferry report finds. It claims that the US could lose out on $162 billion worth of revenues annually unless it finds more tech workers. On the other hand, the study suggests that
India could enjoy a surplus of more than 1 million highly skilled tech workers by 2030 placing it in a strong position to become the undisputed global leader.
The question for hard-pressed companies who need tech talent now is how to get it and hold onto it. While some companies have entered into inflationary wage spirals in an effort to attract IT professionals, very many are not in a position to get into wage
auctions, not least because of the knock-on effect they could have on existing staff.
One potential answer lies in the results of the TalentLMS and Workable survey and the reasons why employees are leaving their jobs. Sometimes it’s for salary, but in many instances it’s for things like career progression opportunities, a lack of flexibility,
a need to be appreciated, and wellbeing factors. This offers employers the opportunity to make themselves more attractive than their higher paying competitors.
There certainly appears to be a growing emphasis on the softer side of the benefits package. For example, investment platform provider Moneybox is currently hiring a London based
senior software engineer. Among the benefits on offer are shares, a pension scheme, private medical insurance, a cycle to work scheme, a gympass subscription for access to a variety of gyms and wellbeing apps, enhanced parental pay and leave, and a home
office furniture allowance.
Meanwhile, Atlanta based Kraken Digital Asset Exchange is hiring a
core infrastructure engineer who will work remotely. Benefits may sound limited to the usual pension and health plans but also include flexible working and the quite novel option to be paid in bitcoin which could be very attractive to Gen Zs and Millennials.
There are ways of tackling the tech talent crunch, and they might just boil down to giving people what they really want instead of what employers think they should want.
Are you ready to explore your options in tech’s every-evolving job market? If so, Finextra’s Job Board has thousands of open roles right now, across companies such as Indeed, Klarna, Starling Bank, Shopify,
Xero and many more.