The Global IT Talent Shortage: How To Prevent This Growing Crisis From Affecting Your Business?
Meryam Lehoufa - March 17th, 2023
Back in 2015, Microsoft CEO, Satya Nadella, stated that every business will be a software business. Today, digitization has made software the backbone of every company, no matter its size and industry type. As a result, with more businesses embracing digital transformation to streamline business operations, increase revenue, modernize work culture, boost operational efficiency, and remain competitive, the need for qualified software engineers has never been higher. These professionals don’t just design and build software and tools to enable and support digital transformation for businesses, but they also play an integral role in shaping and reshaping the world around us.
This sharp increase in the demand for skilled IT talent is, however, not being met with enough supply. Statistics are indicating a growing number of unfilled positions for software engineers and developers around the world. The global IT talent shortage shows no sign of slowing down and has become a pressing concern for businesses and organizations across different industries.
The state of the global tech talent shortage
To better understand the current and future state of the global tech talent shortage, let’s consider the following statistics:
- According to a new global survey from Gartner, Inc, IT executives consider the talent shortage as the most significant barrier to the adoption of 64% of emerging technologies, ahead of security and implementation costs, compared to just 4% in 2020.
- The U.S. Bureau of Labor Statistics estimates that the global shortage of software engineers might reach 85.2 million by 2030. On average, about 189,200 openings for software engineers, software developers, and related jobs are projected each year over the decade.
- According to the U.S. Bureau of Labor Statistics, Software Developer will be one of the top four in-demand professions over the next 10 years, with almost 200,000 difficult-to-replace openings every year.
- On average, it takes 66 days to fill a tech position.
- 61 percent of HR professionals around the world believe that tech talent shortages would be their biggest challenge in 2023.
This high demand for tech talent has also translated into new expectations and priorities from job seekers that employers and hiring managers are now obligated to adapt to. Businesses are now challenged to cope with this shortage or get left behind.
What’s driving the growing global tech talent shortage?
Statistics are clearly indicating that now is one of the most challenging times to retain and hire IT professionals. So what’s driving the global tech talent shortage?
There are myriad factors that are fueling the ongoing IT talent shortage, some are direct and some are indirect. Some of the key causes behind this global crisis, however, can be identified as given below:
Rising numbers of retiring developers
One of the major reasons for the IT talent shortage is the rising number of retiring older workers. In fact, there will be an estimated 2.3 million fewer workers annually for the next 10 years, across the US and Europe, as increased numbers of baby boomers retire, or plan to retire, and fewer people enter the workforce.
In the IT space, in particular, finding qualified talent to fill these empty positions is a real challenge for companies as the millennial workforce might lack the managerial skills or experience required to fill the vacant positions left by retiring older employees. Another part of the challenge has to do with the steep learning curve of modern technologies. As a result, companies are often left with limited options.
Unequal and limited access to computer science education
Another direct contributing factor to the growing shortage of IT talent is the lack of education in computer science. If we take the US as an example, Computer Science classes or programs are only offered by about 53% of high schools. Moreover, not all coding boot camps provide prospective students with a high-quality education.
Unequal access to computer science education leads some students to enroll in alternative tech courses to gain formal training in the field. Other potential students, however, decide to pursue a different career path.
The pandemic-related “Great Resignation”
The “Great Resignation”, driven by many pandemic-related realizations like the need for more flexible working options, job dissatisfaction, wage stagnation, etc, has also contributed in a big part to the global tech talent shortage. With nearly 98% of senior IT leaders stating that it has created skills gaps in their organization's IT function, the Great Resignation manifested at exceptional levels across different industries and geographies throughout 2021 and was still ongoing in 2022. In the US, 48 million people quit their jobs in 2021. Globally, 20% of workers planned to quit in 2022.
Skills mismatch between academia and industry
Even today, many university computer science departments fail to curate their curriculum according to the practical needs of tech employers. In fact, most computer science departments put more focus on the theoretical aspects rather than the practical ones.
Furthermore, as 95% of the university’s curriculum takes roughly two years to change, schools find it challenging to keep up with the rapidly emerging and evolving technology. This disconnect between the formal education system and industry results in a skills gap and large numbers of unemployable graduates, which further exacerbates the IT talent shortage crisis.
Immigration disruptions
The implementation of stricter immigration policies, which many countries implemented in order to control the spread of the coronavirus within their borders, is another factor that has widened the gap between the supply and demand for tech talent.
Countries like Canada, the United States, Germany, United Arab Emirates, Saudi Arabia, and the United Kingdom depend heavily on immigrant workers to meet production and labor demands. In 2020, immigration rates fell by 90% in the UK due to a combination of COVID and Brexit. Although most countries have now loosened immigration restrictions, returning to pre-pandemic immigration rates could take several years.
The impacts of IT talent shortage on businesses
Now, as your business depends on software for both growth and survival, how would it be affected by the IT talent shortage?
Tech talent scarcity can stifle business development. Not only does the short supply of qualified software engineers and developers halt innovation and cause delays in key projects, but it also has major negative operational and financial consequences.
By 2030, the global tech talent shortage is estimated to cost the world economy approximately $8.45 trillion in unrealized annual revenue. According to reports from Devskiller and iCIMS, it takes 50% longer to hire for tech positions compared to other roles. A slow hiring process costs your business money, time, and productivity.
The acute tech talent shortage also resulted in a significant increase in the average salary of these professionals. In the US, for example, the average salary for a software developer in 2000 was $68,000. In 2022, the median salary was $110,000. Other consequences include affecting your company’s ability to meet your clients' demands, achieve business goals, and remain competitive and profitable in the years ahead. In addition, talent shortage often results in burnout of overworked employees, leading to job dissatisfaction and higher turnover rates.
How to address the current IT talent shortage in the most effective way possible
In today’s digital landscape, your reliance on qualified developers and tech staff will only increase. The good news is that there are effective approaches for recruiting and retaining tech talent that your business can adopt in order to cope with the ongoing tech talent shortage.
The following strategies can help you attract and retain talent in the face of fierce competition as the IT labor market tightens.
Upskill and reskill your tech team
One of the most effective ways to combat the growing tech talent shortage is by shifting your focus inward and investing in upskilling and reskilling your existing tech staff. By identifying skill gaps in your workforce and offering the right training programs to develop those skills, you can ensure that your employees are up to date with the latest trends and emerging technologies, and are equipped with the right skill set to meet your business's current and future needs.
Upskilling and reskilling also support recruitment efforts and are among the top expectations of modern-day employees. Some examples of companies that are investing heavily in providing skills training programs for their employees include Amazon and PwC.
Commit to diversity and inclusion in your workplace
Tech is one of the least diverse sectors. In fact, 68% of business leaders agree that there is a lack of diversity in their tech workforce. The tech industry is still largely dominated by white men (close to 88%), while women and minorities remain largely underrepresented.
Fostering a diverse and inclusive workplace – that is race, belief, and gender agnostic, and where all candidates and employees feel welcome – not only allows you to fill more positions but also helps you earn more commitment and deeper trust from your employees.
Offer competitive compensation and meaningful perks
According to the Gartner Global Labor Market Survey, compensation is the number one driver for IT talent attraction and retention. Besides the base salary and performance bonuses and commissions, a comprehensive compensation package should also include 401(k) plans, paid holidays and sick leave, and full-coverage health insurance.
As the size of the compensation package that your company can offer would depend on its financial resources, you can prioritize allocating competitive compensations to employees in high-risk areas. In addition, providing your tech staff with meaningful and attractive perks like remote work options, flexible schedules, learning stipends, parental benefits, employee stock purchase plans (ESPP), etc, can help you attract and retain talent with the skills and competencies required to keep your business growing.
Hire non-degree holders and self-thought developers
Skills-based hiring is on the rise. Chances are your competitors are already taking a skills-based approach to the hiring process by shifting their focus from degrees to skills. In fact, close to 80% of hiring managers say that they recruit developers without a technical degree, and 24.4% do so regularly.
Research has shown that over 35% of developers consider themselves to be self-taught and the number is growing rapidly, thus reducing or eliminating some hiring requirements like college degrees can be an effective approach to widen and diversify your candidate pool.
Provide your developers with modern, developer-friendly technology tools that facilitate their daily work
When it comes to boosting developer experience (DevEx), equipping your software engineers and developers with the best technology is a game-changer. Enhancing developer productivity, satisfaction, and retention depends mostly on the quality of the technology and tools they are provided with.
Having to work with legacy systems is a developer’s worst nightmare. Developers crave flexibility and ease of use, and that's something legacy systems can’t offer. Your developers need access to modern tools and robust, state-of-the-art technology that makes their daily work easier and more efficient.
A developer-friendly technology is one that is fully customizable and extendable, offers fast coding and cross-platform deployment, can be easily integrated with other platforms and technologies (both existing and emerging ones), and offers all the necessary features that can boost your developers' efficiency, productivity, and satisfaction.
One thing that developers dislike more than legacy systems is missing or incomplete documentation. So make sure that the technology you’re providing your developers with also comes with complete, accurate, and comprehensive documentation that your developers can refer to.
Implement the necessary practices to better retain and engage your existing developers
Tech talent retention has never been more critical given today’s highly volatile marketplace and the increasing cost of employee turnover. Retaining your developers helps you maintain consistency, prevent productivity losses, and save time and money spent on developer acquisition and onboarding.
In addition to what we've covered earlier, consider implementing the following best practices to improve developer retention and engagement:
- Nurture creativity and give your developers the space to be innovative.
- Offer career advancement opportunities and professional development programs.
- Create a healthy, welcoming, and people-centric corporate culture.
- Avoid micromanagement as it stifles creativity, harms productivity, and increases stress levels at work.
- Offer good work-life balance programs to increase job satisfaction.
- Empower your developers by involving them in the decision-making process and acting on their feedback.
- Encourage open and supportive communication in the workplace.
- Remove bottlenecks in workflows and enable your developers to self-serve any tools and resources needed to complete their tasks.
Why Redakt offers the best developer experience compared to any other CMS in the market
We understand that there is a serious global tech talent shortage crisis and that it is only predicted to worsen in the coming years, and that’s one of the reasons why Redakt was built with developers in mind.
Redakt is committed to providing your developers with the best developer experience. Keep on reading to find out why your developers will thank you for choosing Redakt over any other enterprise-grade CMS in the market.
First and foremost, in terms of framework, Redakt is designed specifically to run on Microsoft ASP.NET Core. The latest Redakt CMS libraries target .NET 6 and .NET 7. This makes Redakt one of the few future-proof enterprise-grade CMS in the market today, given that many other content management systems are still targeting the legacy .NET framework.
To ensure maximum productivity and ease of use for your developers, Redakt’s cutting-edge technology allows for the following:
- Flexible and highly productive application development,
- Fast and efficient cross-platform deployments,
- High-performance scalable systems,
- Extensive customization and integration options, and much more.
A shortage of in-house developers is not something to worry about with Redakt CMS. Thanks to its flexible and developer-friendly architecture, Redakt makes it possible to implement a fast, high-performing website with only one developer. As it uses only modern, advanced, and industry-standard technologies and concepts, Redakt makes deployment a breeze. Complicated file copying, scripting, or database management is not something that your developers would have to deal with when using Redakt.
Your developers can choose from a number of the fastest and most highly scalable cloud databases that Redakt supports out of the box, like Azure Cosmos DB, Raven DB, or Amazon Dynamo DB. For a hassle-free setup, Redakt provides code-first content models, clear APIs and architecture patterns, and fast response times. Redakt also comes with comprehensive documentation and a knowledge base that contains clear and exhaustive configuration and implementation guides. All to make your developers' work as easy and efficient as possible.
If you are looking for flexibility, future-proofness, scalability, robustness, unlimited customizability, ease of use, and maximum security, Redakt CMS checks off all the boxes.
Why take our word for it? Book a free demo now and evaluate Redakt’s unrivaled performance yourself.
