We have a technology skills mismatch problem and only IT can solve it
The technology hiring (and talent retention) crisis is clearly deepening. The latest KPMG and REC jobs report shows that the fastest decline in permanent vacancies was seen in the IT and computing sector. Additionally, workforces in these sectors have been steadily declining since peaking in 2021, with more than a quarter of a million tech jobs cut last year.
At the same time, an estimated 30 to 70 percent of data, security and development jobs remain unfilled, and by 2025 the global shortage of full-time software developers and cybersecurity professionals is expected to reach eight million. Apparently there are not enough people with the right skills to fill the roles that organizations currently need.
The digital skills mismatch
This is a significant problem as it has the potential to negatively impact productivity and innovation, and could leave IT organizations struggling to compete with their global competitors.
How did this skills mismatch materialize? Firstly, traditional education systems have lagged behind industry demands in teaching the latest digital skills. But because technology is transforming at such a pace, it would have been difficult to avoid this situation.
Head of Technology, KPMG UK.
In the long term, the government must invest even more in STEM education. Initiatives such as T Levels are a good start, but we also need more collaboration between schools, universities and employers to ensure they teach the skills that UK businesses need.
Technologies are developing at an incredible pace; two years ago, generative AI was relatively unknown. Not only does this make it difficult to predict what skills will be needed in the near future, but it can also lead to shifts in demand for capabilities. It would therefore be wise to assume that expenditure on internal training is expected to increase. However, the reality is the opposite: globally, IT training and education already represents less than one percent of total IT expenditure.
How to fast track technology talent
Organizations cannot afford to sit back and wait for the education system to change. Fortunately, there are several actions they can take now to help close their current and future knowledge gaps. First, they need to look for talent early and hire people from schools and colleges to build a robust pipeline of employees. Companies should also reach out to high schools and colleges to find candidates for in-demand positions, such as data engineers, business analysts and programmers, through internships and apprenticeships early in their careers.
Where spending on IT training has fallen, resources should instead be put into a more holistic talent strategy. This should include investments in diverse training, with a focus on identifying and developing future skills, and defining career paths for employees. Furthermore, by placing greater weight on soft skills such as communication and collaboration, people will improve their creative thinking and utilize the expertise of others more effectively. As technology permeates every department, new roles and skills will spread across different functions in organizations. That’s why different parts of the business need to work better together to develop training programs that allow employees to use all their technology and broader business acumen to help drive innovation.
While financial incentives are a key driver for attracting talent, an organization’s values and purpose are also important: 75 percent of job seekers consider an employer’s brand before even applying for a job. If IT leaders can connect technology to purpose, backed by real action, it will have great appeal to existing employees and potential candidates.
Leading digital talent naturally wants to work with the latest technology. Companies that want to attract and retain leaders in their field should therefore look to build or buy the latest technology. Having a clear understanding and ability to communicate about the technology the company uses should give it a real competitive advantage in the battle to attract and retain the best people. It will also help improve the employee experience across the organization as other staff members will benefit from new innovations and ways of working.
Human resources will be integral to accelerating the talent agenda. The challenge for IT leaders will be how to convince HR to look beyond sourcing talent for current projects and convince them that by adopting new recruitment techniques and changing internal training there will be a return on investment in technology talent. This could take years to happen as it will challenge the existing IT talent structure and create new roles, titles and pay categories.
IT organizations as breeding grounds for talent
Despite the high demand for technology professionals, many positions remain unfilled due to a skills mismatch. To change this, IT organizations will have to take on the task of acting as a talent incubator and leading the way in finding and generating the skills needed for the future. Without a radical transformation in the way companies attract and retain digital talent, they will significantly hinder their ability to thrive.
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