Are Tech CXOs Doing Enough to Bridge the Massive Skills Shortage?

As companies signal their intentions to increase technology investments and headcount to record levels, a massive skills shortage threatens to stymie the dynamic growth of the tech sector, according to a recent report.

The 2021 Harvey Nash Group Digital Leadership Report surveyed 2,100 digital leaders in 87 countries, in collaboration with CIONET and MIT’s Center for Information Systems Research further said that in an attempt to ease the tech talent crunch, more than half of tech CXOs say they are planning to cross-train workers from other parts of the company.

Jason Pyle, president and managing director of Harvey Nash USA. “Digital leaders are committed to increasing headcount and investing in technology talent, while recognizing that building a productive, successful and satisfied workforce takes a new approach to broadening skillsets, increasing mental well being and committing to diversity and inclusion initiatives.”

This year’s report reveals critical factors that continue to impact the growth of the U.S. tech sector, including:

• Record tech investment and headcount – The number of digital leaders in the U.S. planning to boost their technology investment and headcount reached record levels, (30% and 36% respectively).
• Impact of skills crisis on business growth – More than two-thirds (69%) of digital leaders in the U.S. are now unable to keep pace with change because of a dearth of the talent they need.
• Where skills shortages are most acute – Cybersecurity (43%) is the most sought-after tech skill, up by 11% in the last 12 months, followed by DevOps (39%), and big data / analytics (38%).
• The shortage of developers rises the fastest – The shortage of developers (39%) saw the biggest increase compared with previous years. Harvey Nash Group says this shortage correlates with the report’s finding that companies are focusing on creating new products and services, and therefore need developers to do this work.

The report also found that new life priorities, post-pandemic, are complicating digital leaders’ ability to match technology investment goals with the right talent. Eight in 10 digital leaders report that this mindset shift is making retention more difficult than ever; in fact, just four in 10 digital leaders admit they can retain employees in key roles for the tenure they would like. Yet despite these retention challenges, only one in three organizations (29%) have redesigned their employee offers to make them more attractive to staff in the new hybrid working world.

In response to these unprecedented skills shortages, digital leaders are aiming to broaden the skillsets of their tech teams, with over half (54%) planning to cross-train people in other parts of their organization. The number of apprenticeships offered is expected to see a boost this year, as 28% of digital leaders said they would be offering more internships over the year ahead.

Outside of training and using niche consultancies to bridge the gap, almost half (45%) of digital leaders have widened their geographical net to source new talent, as hybrid working becomes more commonplace.

“With businesses planning record levels of digital investment, we could be standing on the verge of a ‘second renaissance’ for technology. Organizations are looking to push their digital transformations further and faster than ever before, putting technology at the very heart of how they operate. This will take them beyond being merely ‘tech-centric’: technology will literally be dispersed throughout the business, everywhere,” said Bev White, CEO, Harvey Nash Group. “But these ambitions are coming under threat from the acute skills shortages that are now worse than ever before. In fact, businesses face a triple whammy. They lack the supply of skilled resources they need; they have not yet evolved a new and effective employee value proposition for the hybrid working world; and the needed skills themselves are changing as technology develops at an accelerated pace. Digital leaders need to rapidly assess their needs and find solutions if their plans are not to be derailed by this potent cocktail of challenges.”

This year’s report revealed what’s working and what’s not when it comes to building a diverse technology workforce. What’s clear is that training, communication and support networks are key and the most successful approach.

This year 21% of the digital leaders surveyed identified as female vs. just 13% in 2020 and the average proportion of females within the technology team is 28%, which shows promise for the leadership of the future. The research found that six in 10 respondents believe their approach to diversity and inclusion is improving the quality of their hires, noting that the most successful strategy for promoting diversity and inclusion is about creating the right culture, not about mandating shortlists or quotas.

Remote working continues to be a double-edged sword. On one hand, it has massively improved work/life balance and productivity, but at the same time, mental wellbeing, staff engagement, collaboration and inclusivity have taken a big hit. Over half (54%) of digital leaders reported a decrease in the mental wellness of their tech teams. To combat this, 27% of U.S. digital leaders have increased their investment in health and well being programs.

Although boards recognize that cleaner, greener technology will improve their carbon footprint, it is placed last in the list of priorities for their technology teams. As a result, only 16% of their digital leaders have reduced the carbon footprint of their own technology to any great extent. The report says that reducing the carbon footprint of power-hungry tech represents both a huge challenge and opportunity for companies and their digital leaders.

The pandemic has forced organizations to re-imagine the way they do business. Creating new products and services has become a top three board priority for the first time since Harvey Nash’s research began 23 years ago. Half (52%) of organizations have major plans for transformation in the next two to three years.

Although cloud is now regarded as a mature technology rather than an ‘emerging’ one, the number of digital leaders with some kind of implementation jumped from 59% in 2020 to 92% today. At the same time, the number of implementations of new technology such as IoT and robotic process automation (RPA) have grown considerably since 2019.

Businesses are emerging from the pandemic with their people in disparate locations, more technology embedded within the cloud and their supply chains diffused. This makes it harder to delineate the ‘boundary’ of an organization and presents a new challenge for all digital leaders.

Another training strategy digital leaders are planning to rely on is internships, with nearly one-third of leaders planning to increase the number of internships they offer in 2022. The difficulties in accessing talent are hurting innovation, with seven in 10 digital leaders saying their company is unable to keep pace with change due to the worker shortage.