With data and technology set to take a lead role in rebuilding a post-pandemic economy, the pressure is on for businesses in all industries to upskill and recruit for a more tech-literate workforce.
More than one in three organisations fast-tracked their digital transformation strategies during lockdown , forced to transition from office-based businesses to virtual companies almost overnight. Since March 2020, businesses everywhere have increased their investment in IT support, cybersecurity, cloud technology and AI as a means of keeping up with increasingly digital ways of working and the global shift toward a hybrid workforce. However, recruiting the talent required to support this digital evolution presents a different challenge.
The tech industry has had a talent deficit for decades, and a fall in college/university enrolments over the last 18 months, plus an accelerated rate of tech adoption, has only exacerbated the problem. The current IT skills crisis has been described as the worst since the Great Recession of 2008. And the problem is not confined to the UK. Data from Korn Ferry suggests the US could lose out on $162 billion worth of annual revenue due to an underpopulated tech workforce, while McKinsey reports 90% of executives across the world are now facing a digital skills gap in their workforces.
The global skills shortage has the potential to threaten not only the growth and prosperity of tech businesses, but those across all industries, as the need to digitise functions and processes becomes a growing necessity. It’s essential that tech businesses are able to maintain, and even accelerate recruitment of talent in order to stay competitive.
An employee-driven job market
The balance of power has shifted to skilled employees. This requires companies to understand the needs and priorities of the talent they’re hoping to attract – as well as understanding why existing employees leave. It means thinking bigger than salary increases alone, which now hold less sway among a post-pandemic workforce.
As part of what’s become known as ‘The Great Resignation’, it’s expected that 52% of tech employees in the US will look for a new job within the next 12 months. They’re seeking stronger leadership and more flexible working opportunities above higher salaries, even though increasing wages is still the go-to approach for many organisations. Meanwhile in the UK, 66% of SMEs are concerned about offering an appealing employee proposition compared with their peers. With fierce competition working against them, it’s essential to stand out from the crowd.
A recruitment strategy based on a clear understanding of the skills you need now, and are likely to need in the future is the first step to ensuring that you’re able to secure and retain essential tech talent . However, it’s no use thinking only in the short-term. Medium and long-term strategies should also be adopted as digital solutions continue to transform the way we work.
Short-term solutions to bridge the tech skills gap
There are immediate steps you can take to make a difference.
- Hire internally. Employees stay 41% longer at companies that have high rates of internal hiring, and it also speeds up the hiring process and reduces the cost per hire.
- Bring in temps, freelancers, consultants and contractors. Offering an immediate resource of specialist knowledge, they’re cheaper than full-time hires. The downside is a lack of understanding of the wider business objectives and culture and no specific loyalty to your business.
- Rethink rewards. Data reveals that candidates start engaging with a company's talent brand eight months before starting a new role with them. Employee incentives that are relevant to your target candidates can differentiate you from competitors.
Instead of pool tables and break-out spaces, consider greater flexibility around working hours and location. Google employees have accepted pay cuts for the privilege of working anywhere.
Employees also respond well to mental health and wellbeing support and discounts on income protection or car insurance. Equally, companies that prioritise sustainability and have a clear ESG strategy will rate more highly than those which don’t.
- Broaden interview criteria. IBM’s New Collar programme hires candidates based on attitude and aptitude rather than credentials and employment history. 15% of those onboarded each year don’t have a degree or traditional IT background.
This is also an invitation to review recruitment policies around inclusion and diversity, for a wider talent pool with a range of valuable experiences.
- Clarify requirements for entry. In a poll by Information Age, it was revealed 68% of students thought they needed STEM qualifications to work in the data and tech sector.
- Improve virtual recruitment. Every online and mobile touchpoint should reflect your business values and enhance the candidate experience. This includes job listings, the application process and all communications relating to interviews and onboarding.
For the medium term…
- Establish offshore teams. Beyond the US and Western Europe, there’s a wealth of world-class, specialist talent. By building teams within tech economies such as Bangalore, companies can scale at speed.
While it’s important to mitigate against the risks of security breaches and manage language barriers, time zones and cultural differences – high levels of innovation plus the price-to-quality ratio and 24/7 workflow can make this an appealing proposition.
- Develop effective retention programmes. Improving employee satisfaction is key to reducing staff turnover. “This ranges from managing workloads, providing a constant flow of training and education, and creating formal talent development programs to allow [staff members] who are newer to the profession to work alongside, or shadow, those with more experience,” says Terry Jost, MD and Global Security and Privacy Segment Leader at global consulting firm Protiviti.
Research from the Hay Group suggests engagement is key to employee satisfaction, finding that companies with a highly engaged workforce outperform the least engaged companies by 54% in employee retention, 89% in customer satisfaction and see four times more revenue growth.
“The best talent, regardless of role or age, want to contribute to something bigger than just the individual client they are hired for or project that they are working on,” says Julianna Richter, Global CEO of Ogilvy PR. “They want to build something new, to chart new paths and are looking for opportunities to create the blueprint, not just follow it.”
- Training and upskilling. Amazon recently committed $700 million to “upskill” more than 100,000 of its employees with new skills by 2025. Its Technical Academy aims to transform non-technical people into software developers in just nine months.
According to Jean-Marc Laouchez, President of the Korn Ferry Institute, the savviest organisations are training talent themselves and bringing school leavers into a culture of continuous professional growth. This, he says, is the future of work, “extending far beyond the traditional definition of learning and development.”
Consider the bigger picture and think long-term
- Employer-university collaboration. EUC allows companies to nurture and invest in the talent of the future. Whether it’s sponsoring hackathons and networking events or co-creating courses more closely aligned with business objectives, these joint ventures help establish innovative new technologies and business concepts, as well as education and training for existing and potential employees.
For example, IBM recently announced a global plan to provide 30 million people of all ages with the skills needed “for the jobs of tomorrow”. It includes a clear roadmap with over 170 new academic and industry partnerships.
Lexmark, Honeywell and Disney chose a different tack. They joined other international organisations in partnering with the AI Academy of North Carolina State University. Hand-picked employees took a 40-week workforce development programme to help them enter the artificial intelligence pipeline.
- Encouraging government action. “As with many economies, the onus falls on companies to train workers, and also to encourage governments to rethink education programmes to generate the talent pipelines the industry will require,” observed Werner Penk, President of Korn Ferry’s Global Technology Market practice.
This has multiple implications in practice.
In Singapore, for example, the government’s SkillsFuture initiative offers multiple access points for upskilling opportunities, while in Malaysia the approach was partnerships with multiple tech giants.
The UK government recently increased the apprenticeship hiring incentive to £3,000 for each new apprentice taken on while the lifetime skills guarantee, worth around £3,400 per person, aims to ensure that all adults have access to a range of free courses, including digital.
Apprenticeships are also proving successful in filling ‘middle-skill’ cybersecurity and computer programming jobs in the US for those who meet the minimum requirement of a two-year degree plus relevant work experience.
Meanwhile, in Australia the government has widened its Priority Migration Skilled Occupation List and is fast-tracking visas to make up for the impact of Covid.
Do you have specific questions about securing tech talent for the future of your business? Get in touch by emailing [email protected]