Popular media has often insinuated that artificial intelligence will take over all our jobs one day. However, the data tells a different story: forget AI; there simply aren’t enough skilled people to take on all of the complex jobs available today. A recent study by management consulting company Korn Ferry found that by 2030, the global talent shortage will result in more than 85 million unfilled jobs! If this deficit is not addressed in time, it could lead to $8.5 trillion in unrealized revenues.
The technical worker shortage, in particular, has worsened over the past two years. According to data collated by the employment platform Hired, software engineers received double the interview requests in 2022 as they did in 2021, making the tech hiring market extremely competitive. Additionally, the pressure companies are facing to retain tech talent is exacerbated by the fact that 40% of employees in digital fields are actively looking for another job.
The problem is twofold: there has been a surge in technical jobs, while the supply of appropriately skilled technical workers cannot meet the current demand. Let’s explore the reasons behind this demand-supply gap in tech talent and what employers can do to help workers cultivate the skills they require.
The Surge in Tech Job Demand
With the rapid leaps we have seen in technology within the past decade, it’s no surprise that companies are working towards digitizing their operations. This digital revolution has increased our dependence on data like never before, which has increased the market demand for technical talent.
The COVID-19 pandemic has also accelerated the digitization process for companies. Lockdowns have pushed companies across the world to adapt to remote working and virtual communication with customers. Creating and maintaining digital infrastructure that can support the entire workforce virtually requires several technically skilled workers. IT executives surveyed by Gartner see technical talent shortages as the most significant barrier to the adoption of 64% of emerging technologies.
The demand for technical workers has consequently risen at an unprecedented rate, but unfortunately, technical skill-building among the workforce is not keeping pace. Companies are offering more technical jobs with better pay, so why is the workforce struggling to meet the rising demand in this specific job category?
Why Is There A Shortage of Technical Workers?
The tech industry’s reliance on traditional educational qualifications has narrowed the pool of eligible candidates, especially considering that more of the tech workforce is pursuing non-traditional avenues of education. The pandemic’s impact on formal education has only widened the technical skills gap.
The pandemic has also fueled the workforce’s dissatisfaction with corporate America, as reflected in the Great Resignation in November 2021 that saw the number of people quitting their jobs at a record high.
Gartner’s Global Labor Market Survey (Q3 2021) showed an above-average percentage of active job seekers in IT, increasing the risk of attrition for the tech industry. Maintaining an equitable work-life balance and having good relationships with their colleagues are job attributes that tech workers care the most about.
Tech employees are also interested in consistent growth and challenges in their jobs, with 73% planning to change their jobs within the next 2-3 years. Alongside these goals, it’s also crucial to look at boosting diversity in the workplace. According to a recent study, blacks and Hispanic workers make up 11% and 16% of the workplace yet represent only 7% and 6% of the STEM workforce with a Bachelor’s degree or higher.
All of these factors point to two things: not only is there a technical worker shortage, but it may also be a challenge for firms to retain the tech talent that they already have on board. So what are companies doing to cultivate tech talent, bridge the skill gap, and ensure long-term loyalty and commitment from employees?
Cultivating Tech Talent
Through FloCareer’s data-driven talent assessment tools, our interview experts have noted a growing preference among employers toward non-traditional means of education like boot camps and tech apprenticeships to upskill or reskill employees.
This highlights the need for job descriptions to move away from the archaic mention of minimum years of work experience or specific degrees required. Our talent assessment tools can determine the competence/ effectiveness of candidates in an objective, unbiased manner.
Two platforms designed to train digital professionals that are growing in prominence are Udacity and Learn In. They create dedicated programs in partnership with businesses to help employees develop new skills they can apply to work projects. Such initiatives help companies save on the cost of hiring new talent.
In 2021, oil and gas company Shell hired Udacity to create a ‘citizen data scientist learning program’ meant to train in-house engineers in data science at an accelerated pace. The first cohort of program graduates built a machine learning program to gather data from every oil rig in the world. Analysis of the collected data predicted significant mechanical failures on the rigs. Timely communication of this information to the relevant authorities helped save $2 million in damages on each rig.
Similarly, Learn In is working with banks to create learning cohorts that upskill finance professionals for data science and coding jobs. These new initiatives are reimagining how tech talent is trained to combat the technical worker shortage.
With a majority of HR professionals in support of eliminating the four-year degree requirement for candidates, tech apprenticeships might be the solution to growing the tech workforce. LaunchCode and Bloom Institute of Technology, formerly Lambda School, have been actively training people without college degrees to perform tech jobs. Microsoft Philanthropies has rolled out plans to expand its cybersecurity skilling initiative to 23 additional countries to close the skill gap and overcome the worker shortage in the cybersecurity sphere.
Even as such programs work to overcome the talent shortage to meet the growing demand for tech workers, companies continue to face challenges with hiring processes and costs. Let’s look at new hiring practices companies are using to onboard and retain tech workers.
What’s Next For Tech Employers
In its Decoding Global Talent Series, BCG found that 95% of digital workers surveyed prefer a hybrid work model. In the pandemic, tech workers developed flexible work routines and began to prioritize work-life balance. The flexible working hours that hybrid or remote working models offer are simply unmatched by a full-time office job. The desire for remote work might be contributing to the trend of job growth in smaller cities, away from major tech hubs.
Tech employers need to accommodate this preference for flexiwork in order to recruit and retain stellar tech talent. The remote work trend can also greatly benefit employers struggling to find skilled workers in their area by opening up access to pools of talent around the globe.
Many employers are also turning to technical experts in the global freelance economy to meet their hiring requirements. At FloCareer, we have capitalized on the availability of flexible gig workers and recruited an army of freelance technical experts to conduct interviews for our clients.
Our curation of skilled interviewers ensures that the companies we recruit for get focused skill assessments of the tech talent they want to evaluate, enabling them to make data-driven hiring decisions.
The technical worker shortage is a serious and nuanced problem. The several layers to this demand-supply conundrum warrant several solutions. Companies are coming up with creative ways to adapt using upskilling initiatives and flexible work models.
Even as the technical skill gap is being addressed, this unprecedented tech worker shortage we are facing is changing how traditional tech companies operate and leaving a lasting impact on the future of tech education, training, and hiring.