How to Overcome the Tech Talent Shortage in the U.S.
Finding the right professional to fill the right position at a company can be a difficult feat as is, but if we add a talent shortage to the mix, this task can quickly become insurmountable. Tech talent shortage has always been a reason for concern in the industry, especially given the applications technology has in virtually every field and the degree of specialization caused by globalization.
Demand for engineers will only continue to grow, so much so that according to Forbes and the U.S. Bureau of Labor Statistics, between 2019 and 2029, it will experience a 22% growth. By 2026, the U.S. will have an engineer shortage of 1.2 million.
However, the shortage of tech workers in the USA not only relates to software engineers, but to several other IT professionals and this shortage will only worsen over time. So, how did we get here and what can we do to remedy the situation?
The U.S. Tech Talent Shortage: What You Need to Know Today
Talent shortage is becoming a problem for several different industries all over the world, but especially in tech. The reasons for this are mainly:
- An acceleration in the digitization process due to the COVID-19 pandemic
Working from home not only means that workers need faster connections and networks, but that these networks are more vulnerable to attacks.
Companies need to invest on stern and more reliable cloud systems that can be easily scaled, capable of handling the workload of their employees from remote locations. Adopting identity and access management to keep the company data safe in a remote way.
Many also had to adjust their processes and legacy systems and make them more flexible to deal with a higher demand.
This digital acceleration has led to companies having to hire more IT professionals to build software products that meet the time to market and ensure they can effectively compete locally and internationally. This need only increases demand, making the tech talent shortage even more acute.
- Incredibly high salary expectations & high turnover rates
As a consequence of the lack of software developers, the salaries now expected by the professionals make IT the best compensated sector in the industry. According to Glassdoor, software developers in the U.S. have an average salary of $94,419.
A salary like that can considerably set back smaller companies, who often cannot afford to get the talent they need to build their product. These expectations are seldomly lowered by developers and can often lead to companies hiring less skilled or experienced professionals for lower wages.
In fact, recent statistics published by ManpowerGroup indicate that tech professionals are considered among the top 10 most difficult to hire in a company.
Additionally, the tech industry also has the highest attrition index, which ultimately means employers have to pay between 50% and 250% of the salary to replace the professionals they lost.
Another issue that affects turnover rates is the fact that, because companies don’t find the right fit for the vacancy they need to fill, they assign these tasks to other employees, which can lead to an increase in burnout and have a direct impact on turnover rates.
- Most candidates don’t meet job requirements set by companies
Most companies prefer to hire more experienced software developers, which often translates into higher expectations and requirements many candidates simply do not meet, especially when it comes to newer technologies, such as machine learning or IA.
Currently, less than 30% of software architect candidates and less than 40% of DevOps actually meet the requirements set by companies, which means over 50% of companies have to lower their demands in order to avoid tech industry labor shortage, leading to lower quality products and services and ultimately affecting the ability of companies to innovate and adopt new technologies.
- Only 50% of all American schools offer CS courses
Not nurturing the right skills at a young age is one of the reasons that explain the tech talent shortage many countries are experiencing today, including the U.S. According to the 2021 State of Computer Science Education report, only around 50% of high schools in America offer foundational computer science courses, but less than 5% of students across 37 states actually enroll in them.
Additionally, most of these courses are taught in urban schools with higher resources, which are less likely to have students from minorities, putting them at a considerable disadvantage.
When it comes to teachers, only 16% said they had more than 11 years of experience in CS courses and more than 60% of them actually teach other subjects as well. The report also shows that a number of teachers don’t actually have the right credentials to teach CS courses.
Nevertheless, interest in AP computer science has grown over the years. More students are taking the exam (a 13% increase in 2019-20 from the previous year) and the number of individuals from minority groups involved in these courses have consistently increased since 2016.
What Does this Talent Shortage in Tech Mean for the Industry?
Today, the U.S. is without a doubt the tech leader in the world, but this lead could easily be lost if the country doesn’t have the necessary talent to stay on top. In fact by 2030, tech labor shortage in America can lead to losses of up to 163 billion dollars in revenue.
Technology has become an important part of most of the other industries, and if its development is stalled due to talent shortage, it could generate losses in every other sector, as well as in the global economy, where most tech giants dominate the stock market indices. The tech sector makes up over 10% of the US Gross Domestic Product (GDP) and this percentage will only continue to grow.
Not being able to acquire the necessary talent means companies cannot compete with those that have the talent, move faster and adopt technologies that improve their results. In fact, according to a 2021 study by Gartner, businesses consider that not tapping the best talent is the biggest obstacle when it comes to adopting 64% of new technologies. Even when the leader recognizes the need to adopt a new tool, not having the right workers to do so can severely impact the company’s performance and goals.
This not only affects automation technologies: the problem can be found in virtually every sector, from infrastructure to network, security, databases, storage, platform services, etc.
How to Address a Potential Tech Worker Shortage
The sansdemic is nothing more than a “demographic draught”, where a workforce is lacking people. This is exactly what the labor shortage in America, among several other countries, is all about. A tech talent shortage can be addressed in several different ways, including long-term and short- term solutions.
Both the federal and local governments have started working on potential labor shortage solutions, but most of them are long-term and require a series of measures be put in place and enforced throughout extensive periods of time before actually reaping the benefits from them. The reality is American tech companies are already struggling to find the right talent at the time they actually need it.
There is, however, a simpler and effective way in which companies can find talented, skilled IT professionals and start working right away: outsourcing. Today you can tap into international highly skilled talent that meets your requirements to the T and avoid having to go through endless hiring processes.
Outsourcing improves your company’s productivity right away, you can cut significant recruitment and training costs, and you pay for the service you receive.
At Nearsure we provide outsourcing and staffing services, screen candidates for you and make sure they are the right fit. We can help you turn your local, smaller team into a strong, international group of professionals ready to work. You can easily manage your team and grow or reduce it to meet your specific project needs. The power is in your hands.
Get in touch today and boost your productivity in no time!