The Impact of the Global Tech Talent Shortage on Businesses
Newer technologies like Artificial Intelligence, alongside concepts like digitalisation and the ‘new normal’, have transformed the job market. On the one hand, the spark in automation has led to the loss of over 60 million jobs in the USA. On the other, the future tech-driven economy will create 97 million new jobs globally.
But there’s a serious problem — talent shortage.
According to Korn Ferry’s recent report, by 2030, over 85 million jobs could go unfilled because of the acute global talent shortage. And that’s just the beginning.
Why is the world experiencing a tech talent shortage?
Satya Nadella, the CEO of Microsoft, was quoted saying, “All businesses are software businesses.” In 2021, that’s exactly what we’re seeing.
Software is the glue that holds a business together. It is the key driver of innovation and agility for enterprises worldwide. Irrespective of the type of service they provide, these organisations use software on a daily basis to coordinate workflows, support customer queries, manage databases, and even market their solutions.
And because 90% of an average organisation’s operations are supported by software, it is only natural that we are experiencing an unprecedented increase in the demand for skilled tech experts. But the catch here is that the demand has exceeded the supply, leading to one of the largest talent shortages in the history of the world.
Apart from this, other contributing factors to the global talent shortage include:
- The exit or retirement of Gen-X from their existing roles.
- Lack of skilled employees in new and innovative technologies.
- Lack of formal STEM (Science, Technology, Engineering, and Mathematics) education.
Covid-19’s contribution to the global talent shortage
While there has always been a scarcity of tech experts, today, because of the coronavirus pandemic, that gap is larger than ever.
When Covid-19 hit the world in 2020, a lot of businesses were nowhere close to digitalizing their processes. Meanwhile, there was a rapid shift in customer interactions towards online channels. This made companies realise that to sustain their business and stay afloat, they had to go digital — and they had to do it quickly. This also meant that they had to augment their existing workforce with skilled tech resources.
And so, in the span of a mere few months, companies sped up years’ worth of digital transformation and hired large teams to help them do it. In fact, according to a McKinsey Global Survey, many companies advanced their digital customer and supply-chain interactions by three to four years during the Covid-19 crisis.
However, an important part of digital transformation is automation. And while automation will create over 50 million jobs globally in the next few years, it also means that people will have to reskill to perform new tasks.
And that’s what will significantly contribute to talent and skills shortages.
What is the global talent shortage costing businesses?
According to ManpowerGroup, over 36% of global employers are struggling to fill existing job positions — the highest in seven years.
But how is this affecting the company’s bottom line?
The study went on to say that 54% of the respondents believe that the tech talent shortage has a medium to high impact on their bottom line and their ability to meet the needs of their clients. When you translate this in terms of revenue, the numbers are staggering.
For instance, in a survey of over 1,000 business leaders across the UK, it was discovered that roughly €7.6bn is spent every year on inflated salaries, temporary staffing, recruitment fees, and training — a 39% increase from €3.3bn in 2017. Similarly, the US could lose out on €132 billion worth of revenue annually because of skill shortages.
So what options do businesses have?
Can offshore development be an optimal solution?
Read the full article at: https://thescalers.com/the-impact-of-the-global-tech-talent-shortage-on-businesses/
