Kevin Beasley is the CIO at VAI.
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Nearly two-thirds of IT executives consider talent shortages the most significant barrier to adoption of emerging technologies, according to Gartner—up from only 4% in 2020.
Meanwhile, many organizations have been striving for digital maturity over the past few years as business and IT leaders recentered their strategies around enterprise technologies. While the increased reliance on technology helps organizations collaborate more effectively and boost operational efficiencies, it also drives demand for IT, data, engineering and security expertise that remains in short supply.
With the candle burning at both ends, it’s critical for organizations to invest in their current IT workforce while potentially leveraging strategies like outsourcing to fill the gaps. By developing a talent acquisition strategy that promotes organizational agility, technology leaders can navigate the year ahead to achieve fully equipped teams that bring value and innovation to the business.
Increased Demand For Skilled Workers Meets A Diminishing Talent Pool
The global digital transformation market is forecasted to surpass $1.5 trillion in 2027, up from around $595 billion in 2022. Much of this growth stems from organizations’ continued investment in AI and machine learning (ML) technologies and enterprise software like customer relationship management (CRM) and enterprise resource planning (ERP) systems.
As technology investments increase, the need for skilled technical professionals to implement, maintain and secure the technology soars. The problem? Three-quarters of employers are struggling to find the talent they need—and IT and data roles are the most in demand.
The unemployment rate remained under 4% throughout 2022, proving the technical labor shortage doesn’t spring only from an unwillingness to work. Despite recent layoffs across the tech industry, many of those workers did not fill technology positions and therefore are not helpful for the technology shortage. Also, technology today is substantially more advanced than technology as recent as 10 years ago, and there simply aren’t enough qualified individuals to fill the growing number of technical roles.
It’s a unique scenario. When inflation rises and the economy lags, unemployment rates usually skyrocket. But factors like skills gaps, other desirable career choices available and early retirements are contributing to the shrinking pool of qualified talent.
Four Strategies To Remain Competitive In A Constricted Labor Market
The shortage of skilled labor poses a serious risk to your organization’s ability to innovate. Without the right people to implement and maintain technology solutions, how can your organization function effectively, let alone grow?
Fortunately, you can mitigate the impact of labor shortages by prioritizing flexibility and continuing to invest in current employees. Here’s what that might look like for your organization.
1. Focus on engagement and retention.
As you search for talent, don’t lose sight of your most valuable assets—current employees. Engagement and retention should remain a top priority because turnover amplifies skills gaps and creates additional roles to fill.
Start by ensuring employees have a clear understanding of their career path in the organization. When people feel like they can no longer grow in their careers at their current company, they tend to crave new challenges, opportunities and higher compensation. Keep your workforce engaged by capturing feedback on a regular basis and holding in-person conversations with employees about their careers at the organization.
Questions to ask existing employees might include: “What types of projects do you see yourself working on this year?” or “Are there any tasks that you could help improve?” You should remember: Actions speak louder than words, so consistently follow up on feedback by addressing and acting on employee concerns.
2. Upskill and reskill your current workforce.
Upskilling and reskilling employees not only improves retention but also elevates skills so workers can move up—or laterally—to fill in-demand positions.
Collaborate with employees to identify the skills they’re interested in learning that provide benefit for the company, the training they need to fill knowledge gaps and how acquiring new skills can push their career and business forward. These conversations set the stage for you to provide relevant opportunities and resources—like internal training or stipends for tech boot camps—that will directly benefit employees and the organization.
3. Outsource IT and security functions.
Organizations have relied on third-party software and services for years now. But even though outsourcing isn’t a new trend, it remains an effective way to either reduce overhead or augment existing staff costs and redistribute some of your IT and security workload.
Outsourcing can range from hiring contract workers for a tech solution deployment to employing a third-party cybersecurity firm to manage threat detection and response. To identify the most effective outsourcing strategy for your organization, pinpoint areas of the business in which talent is scarce, but demand is high. Then compare the price of hiring versus outsourcing—which in the existing labor market, you might find, outsourcing is the more cost-effective option or only option.
4. Prioritize flexibility in your hiring practices.
Some employers increased technical salaries and offered more robust benefits (like additional paid time off and the ability to work remotely) in response to inflation and high employee turnover rates. This adaptability is the key to navigating a tight labor market, but offering raises and remote work isn’t always an option.
There are other ways to remain agile, like lowering barriers to entry for certain roles. For instance, if an applicant for an IT role doesn’t quite meet the skills requirements, consider soft skills like curiosity and willingness to learn. If the applicant has at least some of the required knowledge and demonstrates they want to learn, take a chance on them. You can help them hone their technical skills over time.
Human resources or hiring teams have their plates full as pressure to fill technical roles continues to swell. Like most business challenges, the ability to remain agile remains a critical component of recruitment and retention strategies. Whether you rethink your hiring playbook, outsource IT functions you historically managed in-house or take a chance on an applicant you may have overlooked in the past—now is the time to think outside the box.
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