In this segment of “Office Optional with Larry English,” Larry talks about the war on tech talent and what that means for your organization.
Are you prepared for the coming war? No, I’m not talking about some geopolitical clash, but rather the significant challenge businesses will be dealing with for years to come: The tech talent war.
The Covid-19 pandemic caused an unprecedented wave of tech adoption for businesses across all industries – as companies learned to work remotely and connect with customers virtually, they essentially crammed a decade’s worth of tech adoption and digital transformation into a single whirlwind year.
Now, big organizations with big budgets are driving up wages, paying more for workers – and not just for workers on the coasts, but for qualified candidates anywhere. In other words, companies are up against wage inflation and a competitive field that includes not just their own backyard but the entire world. This makes the talent squeeze especially difficult for medium- and small businesses.
The Pandemic Exploded the Tech Skills Shortage
The shortage of tech talent is not a new problem. Over a decade ago, more than half of CEOs expressed concern over the dearth of talent for digital roles. By 2019, 79 percent had concerns. Covid severely exacerbated the skills gap, and there’s no end in sight.
According to CompTIA’s 2021 Workforce and Learning Trends report, 40 percent of companies hired tech staff during the pandemic, and 66 percent have plans to add more in 2021. Many of the changes brought by the pandemic aren’t going to fade with lowering infection rates, which means companies will need to continue investing in tech and modernized ways of working to survive. Companies everywhere are figuring out how to make hybrid work permanent. And digital channel adoptions such as telehealth and curbside grocery pickup are so overwhelmingly preferred by customers that many firms are putting permanent solutions in place.
At the same time, a mass talent exodus is on the horizon – Microsoft’s 2021 Work Trends Index found that over 40 percent of employees are considering making a job change. People with in-demand tech skills will be able to be picky about their next move. Wages are already increasing substantially; my company is seeing tech salaries inflating for some roles as much as 20 to 30 percent. Companies that fail to deliver the working experience people want – flexibility is overwhelmingly preferred – will suffer severe brain drain.
Companies Must Get Creative – Fast – To Cultivate Tech Talent
The stakes for beefing up the tech talent pipeline are high. A recent Korn Ferry study found that unless we get more high-tech workers, by 2030, the U.S. could miss out on over $160 billion of annual revenues.
Proactive companies are already working on creative solutions. These include:
- Upskilling employees. Forty-two percent of companies say they plan to launch upskilling or reskilling initiatives among current workers. Amazon, for instance, in 2019 announced a major initiative to upskill 100,000 U.S. employees by 2025, focusing on software engineering, cloud, machine learning and IT workers.
- Reimagining training for tech talent. The majority of HR professionals support eliminating the four-year degree requirement for positions. Tech apprenticeships provide one training alternative. Organizations like LaunchCode – which my company partners with – train people without college degrees for tech jobs and connect them to job opportunities. Apprenticeships are already gaining traction in Europe, and will likely do so in the U.S., too, considering the new National Apprenticeship Act, which earmarks $3 billion to expand apprenticeship programs across many industries, including tech.
- Turning to the global freelance economy. Some companies are looking far from home for tech talent, turning to the global freelance economy or looking for full-time workers abroad. This is only a band-aid solution, however, as the talent squeeze is felt everywhere – recent stories have highlighted companies in Australia, the United Kingdom and Singapore looking beyond their shores to meet their demand for tech skills.
- Helping to shape national immigration policy. Google recently submitted an amicus brief to maintain work authorization for the thousands of individuals whose partners have H-1B visas, the status common in the tech sector. Amazon, Apple, IBM, Microsoft, Twitter and other major tech organizations also signed the court filing.
All these solutions, however, take time to implement and start bearing fruit. Companies must act now to put a strategy in place for attracting and maintaining tech talent.
One immediate step they can take is getting creative in their benefits – offering the flexibility of remote work is a no-brainer, given that CodinGame, a developer recruitment platform, found that 95 percent of developers prefer a hybrid working model. Across all industries, ‘remote work’ job listings have increased 457 percent, according to recent LinkedIn data, with the tech sector a leader in job listings. Companies that fail to figure out how to offer this flexibility simply won’t be able to attract the talent they need.
The pandemic transformed nearly every organization into a tech company. Although the competition will be fierce for qualified tech talent, companies can start laying the groundwork now to keep their pipeline full of viable candidates.