Cloud Academy Team

The Tech Talent Shortage: Everything You Need to Know

Tech talent shortage

In today’s economy, technology permeates every operational aspect of modern enterprise. Businesses across all industries and specializations depend on it, amplifying the growing need for skilled professionals to construct, maintain, and protect the tech infrastructures that will power tomorrow.

But the issue at hand isn’t the rising demand for tech talent, it’s the alarming lack thereof. This dearth of skilled labor has companies scrambling to retain the tech staff they have, and hard-pressed to find people with the skills they need.

Here’s everything we’re going to cover related to the tech talent shortage:

Tech talent shortage statistics

While big-tech layoffs and hiring freezes give the appearance of a slowdown, the tech industry shows no signs of cooling. With tech job postings 25% higher than they were the previous year, the reality on the ground looks much different for tech leaders in search of skilled talent. 

In fact, a recent survey conducted by McKinsey & Company revealed that more than 44% of high-profile organizations expect the talent shortage to become even more dire in the next five years. 

From software architects to DevOps engineers, and many positions in between, the talent shortage has led to a situation where only 65 positions out of every 100 open job roles get filled. 

What are the most in-demand tech jobs?

The relentless pace of tech advances has intensified the demand for competent workers in almost all sectors. Companies struggle to secure proficient staff but usually come up short. The challenge that most businesses face is finding skilled personnel to accommodate the burgeoning technical roles that are springing up as trends and needs develop.

Here are the top five most in-demand tech jobs in 2023:

1. Artificial Intelligence/Machine Learning Engineer – A.I. engineers are in high demand, with responsibilities ranging from designing and implementing machine learning algorithms to testing and validating A.I. systems. 

2. Cybersecurity Specialist – With an increasing number of cyber attacks in recent years, cybersecurity specialists have become indispensable. They play a key role in securing information systems by monitoring, detecting, investigating, analyzing, and responding to security events. 

3. Software/Application Developer – This is one of the oldest but most in-demand jobs in tech. Developers are responsible for designing, testing, and maintaining software. 

4. Cloud Architect – As more companies move their data to the cloud, there is an urgent need for skilled Cloud Architects to build and maintain cloud infrastructures. 

5. Data Scientist – As data sets grow, companies are looking to data scientists to extract value from these complex sets of data. They uncover hidden trends and patterns so companies can make more informed business decisions. These candidates are increasingly in demand.

Companies are struggling to fill these crucial roles, and most are turning to upskilling and reskilling programs to close skill gaps.  

What’s driving the tech talent shortage?

According to Gartner, businesses see the talent shortage as the biggest barrier to the adoption of nearly 64% of new technologies. This means that in most cases, IT Leaders looking to deploy new tools to boost business outcomes, can’t. 

But what’s causing this shortage?

One of the primary factors behind the tech talent shortage in the U.S. is the issue of training. Hiring managers generally craft job postings that require skills that come far-and-few-in-between, often neglecting the potential of upskilling or reskilling existing employees to fill available tech roles. 

Despite many employees remaining in their roles for long periods, their skills are based on more traditional functions. Therefore, they lack the technical expertise necessary to qualify for newer, more complex roles. This deficiency has caused a void in the industry, leaving tech positions in high demand, and skilled talent scarce in supply.

Furthermore, traditional recruiting and hiring methods may also be a contributing factor. Hiring managers may find it challenging to accurately assess a candidate’s skills in certain tech fields, resulting in underqualified or mismatched hires, leading to an increased cost for re-hiring.

How is the tech talent shortage affecting businesses?

The rise of technology has undoubtedly revolutionized the way businesses operate. However, this increased reliance on tech has also created a talent deficit in the market.

The demand for skilled tech labor is incredibly high, and competition amongst firms to acquire it is fierce. The industry has seen a redistribution of sorts, where smaller companies are scooping up skilled talent made available by recent big-tech layoffs. 

Conversely, increased hiring costs, and a plethora of options have created a struggle for start-ups and smaller companies to retain skilled tech labor, impeding innovation, and contributing to a tech turnover rate that reached 13.5% in 2023. 

Experts predict that in the US tech sector alone, the country could lose up to $162 billion in revenue amidst the current – and projected – tech talent shortage. 

How are tech companies dealing with the talent shortage?

In response to this issue, companies have implemented various strategies to attract and retain talented individuals. One approach is investing in education and training programs to nurture new talent and help legacy employees acquire essential skills.

In addition, some firms have altered their recruitment methods to focus on unconventional candidates, including people who lack a traditional college degree. 

Companies such as Apple and Google have adopted an alternative approach, seeking out self-taught programmers and coding bootcamp graduates, and individuals with high-demand certifications such as those issued by AWS or Azure.

How to solve the tech talent gap?

Training, and promoting a culture of lifelong learning are crucial to bridging the tech talent gap. Companies can facilitate this by investing in employee training and development programs. Encouraging employees to pursue continuing education and certifications through e-learning, workshops, and courses can be instrumental in upgrading skills.

Also, a more extensive recruiting and retention strategy can broaden influence and attract talent. This means organizations must find ways to offer stronger compensation and benefits, more flexible work environments, and clear upward mobility paths.

At the end of the day, company perception is everything, to attract the right talent, companies also need to have a strong brand that resonates with tech professionals. Creating a positive brand perception can attract top talent, create a competitive edge, and lead to higher retention rates.

FAQs

Is there a talent shortage in tech?

Yes. Many leaders identify hitting hiring targets as one of the biggest barriers to growth. In the future, tackling the tech talent shortage will become less about hiring and retaining talent and more about understanding how to creatively mitigate the gap.

Is tech talent still in demand?

While economic concerns continue to impact the labor market, there is still a high demand for specialized tech roles such as data scientists, AI and ML engineers, and cybersecurity professionals.

Which countries have a tech talent shortage?

While the U.S. economy is leading the way – the talent deficit is expected to reach 600,000 by the year 2030 in the financial and business services sectors alone –  it is closely followed by China, Japan, Germany, and the U.K.

Contact us to learn more about how we help companies go beyond training to onboard, upskill, reskill, and retain proven tech talent through our platform.

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