Imagine you’re the CEO of a venture-backed startup developing an exciting new lithium-ion battery technology. The analysts are impressed with the storage capability, long life, and relatively low cost of your battery, and competitors are taking notice. The next step in your company’s growth is to scale up and take on the incumbent industry leaders, which requires automation of the manufacturing process. Your existing team of engineers, which worked tirelessly to build your working prototype, is now planning for version 2.0.
Production, however, requires a whole other set of skills. You need manufacturing software engineers, automation systems engineers, experts in supply chain management, and other specialists. You search for candidates, offering a modest salary and healthy stock options, to a resounding chorus of crickets. Sure, you’ve fielded a few applicants. But not the highly skilled professionals you need to take your company to the next level.
Your manufacturing launch projections keep getting pushed back, your venture capital funds are dwindling, and now your company is at risk of going belly up. This hypothetical scenario is all too real for countless companies around the world, as the global technology talent shortage presents substantial risks. We’ll take a look at these risks, what’s causing the talent shortage, and what companies are doing to respond and adapt.
The Tech Talent Shortage: How We Got Here
Multiple studies and surveys (including Gartner’s often-cited 2019 Emerging Risks Survey) confirm that one of the biggest concerns of organizational leaders in virtually all industries is a shortage of qualified tech workers. The causes are many, but generally involve the exponential growth in the adoption of disruptive new technologies by employers in all industries, not just tech companies. The adoption of artificial intelligence (AI), data analytics, and cloud services, for example, is considered key to their very survival in many cases.
This isn’t a new trend but has taken on a new urgency as organizations struggle to keep up across the backdrop of challenging workforce trends, including:
- Low unemployment (3.5% in the United States, according to the most recent data available)
- The increasing rate of retiring workers
- Fewer college students in the talent pipeline (including a downward trend in international students attending U.S. schools)
- Difficulty attracting qualified tech workers who are drawn to high-profile consumer brands such as Google and Facebook
- Explosive growth in non-tech companies hiring tech workers (all companies are now tech companies, we’re often reminded)
Per the law of supply and demand, the cost of hiring the right tech talent continues to skyrocket. It’s less of a problem if you have deep pockets, but tends to hurt startups, smaller organizations (especially nonprofits and government agencies), and non-tech companies the most. If you’re not considered a “hip” company like Google or Apple, then you may not be able to offer candidates that type of prestige. Organizations may turn to temporary consultants and other options out of desperation, but they generally cost much more. To put it simply, you have a tremendous amount of leverage if you’re a worker who’s trained in the latest in-demand technologies.
Unfortunately, most predictions see this crisis getting much worse in the next decade. For instance, consulting firm Korn Ferry predicts a global shortage of 85.2 million skilled workers by the year 2030, representing an $8.452 trillion loss of revenue opportunities worldwide. But others, while not disputing the labor gap entirely, arguing that organizations aren’t addressing the problem the right way, for instance:
- There is an unwillingness to develop talent internally or offer continuous training opportunities
- Employers are using the wrong incentives to lure top talent (younger workers, in particular, seek meaningful work, flexibility, and career development)
- Top talent is out there, but organizations aren’t doing the right things to find candidates
The Tech Talent Shortage Presents Significant Risks
Developing the right talent to fill these jobs (expected to grow by 12 percent between 2018 and 2028, far outpacing other occupations) is a gradual process, unlike the rapid acceleration and adoption of these technologies within organizations. This growing skills gap presents an abundance of risks to organizations that need these capabilities to stay alive and compete. The obvious risk is the lack of key personnel for building and managing an organization’s tech and IT systems.
But the talent shortage only exacerbates existing organizational risks, such as:
- The accelerating pace of data privacy regulations
- Threats posed by malware, hackers, and other nefarious actors
- The substantially increased pace of technological change affecting most industries
- The need to innovate to compete
- Inability to increase production to meet demand
For example, companies that manage sensitive customer data, particularly banks and financial institutions but also ecommerce sites and social networks, are always vulnerable to a data breach. Everything could be firing on all six cylinders, and revenue may be rolling in, but all it takes is a single breach to destroy it all. If you can’t hire the right cyber security talent, that becomes much more of a risk.
Another consideration is that when workers are in high demand, they’re more likely to leave after a short time for higher-paying jobs. These types of disruptions affect the talent pipeline of organizations, making it challenging to maintain organizational know-how or train others. So, for example, if your all-star AI expert has put together a very successful strategy for handling customer service requests but leaves after just one year, it could all go south without the proper maintenance if you’re unable to fill that role quickly.
The same is right with consultants and contractors. Even if they do an outstanding job of filling in the gaps for a given technology need, what happens when their time is up? The risk of failing to maintain these systems is enormous.
How to Address the Risks Associated with the Talent Shortage
A lot of organizations turn to consultants and contractors to fill their tech talent gaps, as we mentioned earlier. Using consultants can be much more effective when you also train internal staff to maintain what they deploy. But while those methods can help in certain situations, they’re not a suitable alternative when you need permanent, in-house talent. Leveraging existing, cloud-based AI systems (the software-as-a-service model) is another way organizations can increase their tech capabilities when staffing options are thin.
Companies also need to review their recruiting and retention efforts to make sure they’re doing everything they can to find (and keep) top talent. High salaries are always attractive, but the right incentives don’t necessarily have to break the bank. For example, offering schedule flexibility or remote work is not just attractive to many workers but may also help you expand your range beyond what is considered an acceptable commuting distance.
But one of the most promising solutions to the tech talent shortage is to offer training. The skills needed to build, deploy, and maintain the latest technologies being embraced by organizations of all sizes aren’t necessarily being taught in college. In fact, now more than ever, lifelong learning is the key to both career success and organizational prosperity. Most tech workers understand this and are eager to learn new skills while working for an employer that invests in their career development is becoming increasingly important.
Fortunately, there are plenty of online opportunities to train your staff in the latest technologies. The best options offer live classroom training in addition to self-paced video tutorials and hands-on projects that help them be career-ready upon completion. And if you provide training opportunities, mentioning that in your job postings will help you attract ambitious, motivated talent.
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Be Proactive: Close the Tech Talent Gap with the Help of Simplilearn
If you’re having a hard time finding the right people to fill your open technology positions, you’re certainly not alone. It’s a global problem that’s expected to get worse. That’s why it’s so important to keep your tech staff up-to-date on the latest technologies that will drive your organization’s future success.
Simplilearn provides a unique Blended Learning approach to training, combining the best of live instructor-led sessions with self-paced materials, for the most in-demand technologies such as AI, machine learning, and business data analytics. Check out our online corporate training programs and learn how Simplilearn can help you close the talent gap.