The tech industry has always been a bellwether of progress and with it, the ability of governments, educators and recruiters to keep pace with its changing demands. It’s interesting to remember the days when tech jobs were being decimated. Twenty years ago, Silicon Valley was laying off high tech workers in their thousands. This wasn’t a declining industry. As Wired reported at the time, this was a changing industry, one that had contended with a dotcom boom and bust period and was re-emerging into a decade that would see companies such as Skype, Facebook, Spotify and YouTube launch. The tech industry was not in crisis but in a constant state of flux, re-inventing and demanding new skills to enable innovation.
The best way to think about that is to consider the jobs that didn’t really exist in the early 2000s. Front end developers, UX designers, BI developers, cloud architects, data scientists; all have become specialist areas of work, where skills have evolved rapidly and demanded on-going learning. According to research by Gartner, 29% of the skills that were present in an average job posting in 2018 will be obsolete this year. So, we have a market, where demand for skills is growing and evolving rapidly and seemingly, a smaller pool of relevant candidates with the required skills to do those jobs.
On top of that, the number of companies that are adopting technology and therefore looking to employ technology workers is growing. As the Harvey Nash Digital Leadership Report 2021 reveals, the proportion of companies that are essentially ‘tech companies’ will cross the 50% mark over the next two to three years. These companies will be looking to transform this year, desperately seeking skills to fill those essential transformational roles.
It’s a problem that will hurt organisations financially. Consulting firm Korn Ferry calls it a “$8.5 trillion talent shortage” where by 2030, “more than 85 million jobs could go unfilled because there aren’t enough skilled people to take them.”
The frustration is that it’s not as if we didn’t see it coming. Tech skills gaps have been a constant problem for many years, as the European Union revealed (one of many sources) in a pre-pandemic paper, saying that “Europe faces a shortage of around 756,000 ICT professionals by 2020.” Of course, as we now know, the Covid-19 pandemic distorted the predictions and accelerated demand.
It also made many IT roles remote. As the Ladders Quarterly Remote Work Report reveals, nearly 20% of all professional jobs are now remote, with ‘senior software engineer’ and ‘software engineer’ topping the list as the highest paid remote roles.
This has complicated things a little. While on the one hand remote working opens up the potential for new employees from different regions and even part-time workers, such as parents with children looking to return to work, it is also undermining cultures and employee experiences. No one said that balancing hybrid working models would be easy.
So, what are businesses doing to manage these skills gaps and the complications of keeping employees happy?
According to Jean-Marc Laouchez, president of the Korn Ferry Institute, the savviest organisations are taking on the onus of training talent themselves, increasing their hiring of people straight out of school. These firms are also trying to instil a culture of continuous learning and training.
“Constant learning - driven by both workers and organizations - will be central to the future of work, extending far beyond the traditional definition of learning and development,” he says.
Bev White, CEO Harvey Nash Group claims this is already happening. She cites research from the company’s Digital Leadership Report which shows that over half of digital leaders have increased the amount of cross-training and upskilling for their staff.
“This makes sense,” she says. “Investing in and developing your own people builds engagement, loyalty, and career fulfilment.”
It’s also an attractive proposition for new recruits, along with culture, equity, diversity and even flexible working. As an Insider Pro IT Salary survey found last year, after higher compensation, career development ranked highest in what candidates look for most from an employer. It’s also interesting to note what makes Gen Z and Millennials tick. A Deloitte paper last year claimed that these generations “hold true to their ideals and demand accountability” from employers, as well as brands.
This all makes managing tech recruitment more challenging and if KPMG is to be believed, few are getting it right. In its Top Ten Tech Trends for 2022, KPMG says that a clear technology career path that matches career tracks for corporate functions, such as sales or executive leadership, is lacking and needs addressing.
“Providing growth opportunities, upskilling existing talent and acquiring young talent can help your organization foster outside-the-box thinking and build loyalty that’s resilient to challenges in the marketplace,” it says.
These are longer term views, which isn’t a bad thing. Organisations need to think long term and there are clear signs this is starting to happen more and more. For example, White says that she has seen an increase in businesses pursuing apprenticeships in the UK, with 52% of digital leaders expecting to increase programmes over the next two years.
For solving shorter term skills gaps, money talks, whether that’s full-time, part-time or even contracted roles. According to Adrian Smith, senior director of operations at Randstad UK, the companies that are currently coping well are “the most agile firms,” he says, especially those that “have re-evaluated asking salaries.”
“Goldman Sachs is now offering graduates starting packages of £100,000 a year in the UK,” says Smith. “Magic Circle law firms are paying equally juicy packages. Tech employers will need to get cleverer at framing reward packages if they are to suck up lots of talented people. The best employers are also using remote working to widen their candidate pool. Employers who demand people come into the office are now missing out on candidates.”
Both Smith and White at Harvey Nash also mention a change in how quickly organisations are hiring, with businesses speeding-up their recruitment and approval processes.
“They must,” says White, “because market movements are so fast. It’s a case of holding a final interview within a week of the first interview and making an offer as soon as possible thereafter.”
The typical short-term fix to skills gaps is to look to consultancies to help manage and staff projects. In the UK alone last year, consultancies saw double digit growth, reaching £14 billion in revenues, according to a Management Consultancies Association (MCA) report. Growth in digital technology projects for consultancies is expected to reach 66% this year, a clear sign of digital transformation pressures and a lack of internal resources to manage those change projects.
But even the consultancy sector is not immune to skills gaps, as a Source Global Research report revealed. Nearly two in three consulting firms say they’re short-staffed, with one in five turning down work as a result. Something will sure have to give.
For businesses facing skills shortages the message is clear – move quicker, look wider, rethink recruitment strategies and above all look after your existing employees. Creating a dynamic, diverse, inclusive and equitable culture will go a long way to overcoming the skills hurdles that everyone will have to face up to, in the coming months.