Surviving the tech talent shortage

Technology has transformed the way businesses operate. It's not just the big companies getting in on the act, with 93% of small business owners using at least one tech platform to keep their company running. As business owners increasingly use technology to streamline their processes, communicate with their customers, and collaborate with their teams, tech workers have become more important than ever.

Businesses in all industries need tech-savvy employees to maintain and implement these systems and keep their companies on the cutting edge, but the current shortage makes finding, recruiting, and retaining them more challenging. We take a closer look at the state of the tech talent shortage and how your business can survive it.

How significant is the tech talent shortage?

Research published in 2023 shows the global economy is facing its greatest talent shortage in 17 years, but no industry has been hit as significantly as the technology sector. The study found the information technology talent shortage is the most substantial, with 78% of employers in this industry facing hiring challenges. The U.S. Bureau of Labor Statistics reported a global shortage of more than 40 million skilled tech workers in 2021. And by 2030, the shortage is expected to grow to 85.2 million workers.

A survey of chief information officers conducted by Gartner in late 2022 found that 86% felt they had more competition for qualified IT candidates, while 73% were worried about retaining their existing tech talent. Their fears aren't unfounded, with just 29% of IT professionals noting they're very likely to stay with their current employer.

Several forces are contributing to the current tech talent shortage, including:

Increased tech spending: Businesses around the world are predicted to spend $5.06 trillion on IT in 2024, or 8% more than last year, increasing the demand for people to manage their growing tech needs.
Rapid evolution: Business tech demands have evolved rapidly, especially after pandemic lockdowns, and employees may struggle to keep pace with the new skills that the latest tech requires.
The Great Resignation: This movement that saw people quitting their jobs at an unprecedented rate was a key component of the tech talent shortage in 2022, and employers are still seeing the effects.
Changes in employee requirements: People are looking for roles that offer more flexibility, opportunities for growth, and work-life balance, and they may move out of the tech sector if they can find these opportunities elsewhere.
Ageism and the aging population: The population and its workforce are aging. Yet, many older employees may not get opportunities in tech as studies show people over 35 are often thought to be disinterested in the sector and slow to develop digital skills.
Lack of racial and gender diversity: About 62% of tech workers are white and 75% are male. This lack of diversity can make people struggle to overcome unconscious bias and explore a wider pool of candidates.

How could the tech talent shortage impact your business?

As virtually all businesses rely on technology to some degree, the tech talent shortage is likely to impact your operations. These are some of the challenges your business may face due to the IT talent shortage:

Reduced capacity to innovate: IT executives believe the tech talent shortage is the greatest barrier preventing their businesses from adopting emerging technologies such as artificial intelligence, robotic automation, and blockchain.
Inability to compete with rivals: Without the ability to adopt cutting-edge tech, businesses may lag behind their competitors.
Lost earning potential: The tech talent shortage could cost American businesses an estimated $162 billion in unrealized revenue.
Increased hiring cost and time: Skilled employees know they're in demand, so they're more likely to change their jobs than any other workers, which leads to increased costs for training and recruitment.
Slowed production: Losing research and development employees can impact product development and reduce the business' capacity to create and enhance items, which can in turn reduce customer satisfaction and loyalty.

“A survey of chief information officers conducted by Gartner in late 2022 found 86% felt they had more competition for qualified IT candidates, while 73% were worried about retaining their existing tech talent.”

Overcoming the tech talent shortage

Forecasters expect the demand for tech talent to exceed supply for many years, so you need to start implementing human resources strategies now to overcome the ongoing challenges:

Upskill your existing team: Training your employees can give them the skills you're looking for and increase their loyalty to the business, as they know you're investing in their potential.
Embrace remote and hybrid models: Remote and hybrid working arrangements give employees flexibility and allow businesses to employ talented tech professionals anywhere in the world.
Enhance your benefits: Encourage your tech talent to stay with the company by rewarding them with the benefits they're looking for, from snacks in the office to higher salaries. Ask your tech team what they value to make sure your offerings are appealing.
Partner with educational institutions: Through these partnerships, you may be able to raise awareness of your business among graduates and secure interns who may become permanent employees in time.
Forecast your future: Tech tools such as data analytics software can help you predict your future tech talent needs and take early steps to prepare for the changes so the business can operate more seamlessly.

Strategies for recruiting top tech talent today

The tech talent shortage makes recruiting the right people for your organization more challenging, but these strategies can give you an edge over your competitors:

Promote your brand: Highlighting your business' culture, values, and other aspects that set it apart can make your organization seem more appealing than your competitors.
Streamline the hiring process: With 36% of people saying they've dropped out of a complex hiring process, you want to streamline what you do and make it as quick and easy on candidates as possible.
Hire more diversely: Strategies such as blind skills challenges and panel interviews can help you overcome unconscious bias and find quality hires you may have overlooked.
Advertise in new channels: Utilize a variety of tools, such as online job boards, tech communities, and social media platforms (including their groups), to reach people who may otherwise be unaware you're hiring.
Implement an employee referral system: Encourage your employees to refer suitable candidates in their network. You can reward referrals that result in successful hires with incentives, such as free lunches or gift vouchers.
Encourage applications from outside the tech sector: Restricting applications to tech professionals limits your pool of candidates. You may do better hiring someone from a related specialty and providing additional training, such as hiring a data or business analyst for a data scientist role.
Ditch the applicant tracking system: ATS may speed up the hiring process, but as 88% of employers feel they miss quality candidates using the software, it may be worth going back to basics and reading all your applications to ensure the right tech hire doesn't get overlooked.

The tech talent shortage makes recruiting and retaining skilled employees with tech skills more challenging, but it's not impossible. Use this period as an opportunity to review your company's HR strategies and implement solutions to help build a strong tech department that can help you succeed through this shortage and beyond.