New Study: Lack of Tech Talent Hurting Businesses

By: Janie Kliever on January 25th, 2017

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New Study: Lack of Tech Talent Hurting Businesses

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Is there or isn’t there a tech talent shortage? There’s plenty of debate on the subject (here’s just a sampling, with Fortune arguing for and TechCrunch arguing against).

Some might describe it as not so much a talent shortage as an overblown side effect of the the tech industry’s barriers to entry and self-imposed recruiting parameters. Others might point out the tech skills gap and cite research like the 2016 Harvey Nash/KPMG CIO Survey, which found that 65 percent of CIOs think a lack of talent will prevent their organization from keeping up with the pace of change.

We wrote about the questions surrounding the tech talent shortage ourselves here at Crossover and suggested how employers in the tech industry might avoid the problem altogether by looking at hiring from a more global perspective.

But wherever you land on the issue, it’s clear that companies are feeling the effects of not being able to source the tech talent they need, and a recent study from Indeed released in December 2016 reveals just how much.

How hard is it to find qualified tech talent?

Indeed surveyed 1,000 hiring managers and recruiters in the U.S. technology industry to gauge their experiences in hiring tech talent. Here are some of the study's most eye-opening findings:

  • Nearly 90% find it challenging to find and hire technical talent, with 36% finding it “very” challenging.
  • Job seeker interest in high-level roles like software architects and product managers doesn’t match employer demand: interest in software architect job postings meets only 29.4% of the employer demand, and DevOps job postings meet only 39.6%. 
Why are technical roles so challenging to fill?

How exactly has tech’s hiring landscape gotten to this point? The results of the Indeed survey suggest a few contributors:

The demand gap

Indeed refers to the survey’s findings about the mismatch between job seeker interest and employer demand as the “demand gap.”

In August 2016, the company released data from its job search engine to illustrate this gap, pointing out that employers experience more hiring difficulties when the positions most in demand are also those with the greatest talent deficit. And that’s just what’s been happening.

Below, you’ll see the top 12 tech roles most in demand:

tech roles most in demand

And here are the 10 tech positions suffering from the greatest talent deficit:

tech roles with greatest talent deficit

You’ll notice that there’s overlap between nine out of the top 10 roles in both categories.

No wonder employers are having a hard time. They’re dealing with a double dose of hiring trouble: fierce competition for important, high-skill roles but also a lack of available talent for those same roles.

Part of this may be due to the fact that there just aren’t enough IT professionals to go around—at least with a limited, location-based approach to hiring talent. A 2015 report from Gartner, an IT-focused research firm, projected that by 2020, there will be 1.4 million computer specialist job openings in the U.S. alone—creating a talent shortage that universities won’t be able to fill with qualified graduates by even 30%.

Misguided hiring parameters

Another reason employers face recruiting challenges is more within their control: how they define a “high-quality” candidate.

Traditionally, the U.S. tech industry, particularly in Silicon Valley, has emphasized educational background as an important hiring parameter, focusing recruiting efforts at elite universities.

This attitude was reflected in the results in one of Indeed’s survey questions, which asked hiring managers and recruiters, “How important is an Ivy League degree when evaluating technical talent?” Nearly a quarter of respondents labeled it as “very important.”

This kind of approach to vetting candidates isn’t helping matters. In fact, it seriously limits employers’ potential talent pool and also contradicts research about what kind of hiring assessments are the best predictor of job performance. (Hint: it isn’t academic records.)  

In high-skill tech positions, it should be candidates’ skills and abilities that matter most, not how they look on paper (or how much their computer science degree cost).

Google’s Senior Vice President of People Operations, Laszlo Bock, supported that conclusion when he described test scores and grade point averages as “worthless as criteria for hiring” in an interview with The New York Times, based on an internal study of tens of thousands of Google interviews.

He went on to describe how the proportion of Google employees without any higher education has increased over time, and why he’s okay with that:

“. . . your ability to perform at [a job] is completely unrelated to how you performed when you were in school, because the skills you required in college are very different. You’re also fundamentally a different person. You learn and grow, you think about things differently.”

Students are “conditioned to succeed” in academic environments, and that success doesn’t necessarily translate to a workplace environment.

Lack of HR staff and resources to locate qualified tech talent

The survey also revealed that some businesses don’t even have the resources they need to identify qualified candidates, much less decide on which hiring parameters are the most effective. When asked to rate the most challenging aspect of hiring tech talent, nearly half (42%) of respondents chose finding HR staff who are qualified to uncover top tech talent.

How are problems with hiring tech talent affecting businesses?

So how is this combination of employer demand, hiring practices that limit the available talent pool, and a lack of resources to identify qualified candidates impacting businesses? Let’s take a look at some of the consequences hiring professionals are concerned about:

High employee turnover

What happens when you can't fill open technical positions? Often, businesses turn to existing employees to do what they can to fill in.

Over a third of Indeed’s survey respondents (36%) said that the inability to make timely hiring decisions has caused burnout in existing employees and negatively affected their businesses.

Inability to meet goals

Over 50% of the HR professionals surveyed admitted to hiring “subpar” candidates that didn’t meet job requirements out of desperation to fill open roles.

This opens up the possibility of creating even more problems: when tech hires aren’t qualified to do their jobs, work quality and speed suffers, goals aren’t met, and those hasty hiring decisions have ramifications organization-wide, as we’ll see in the next section.

Business slowdowns

An analysis of Indeed’s survey data by Network Computing, an InformationWeek publication, found that “Eighty-three percent of those surveyed believe the difficulties in hiring tech talent has hurt their business either from lost revenue, slow product development, sluggish market expansion, or even employee burnout and tension on the IT team.”

Whatever the causes of not being able to source technical talent, a lack of qualified candidates is having a real impact on businesses’ ability to operate at their full potential.

Is there a solution? One last section of the survey offers some suggestions.

The pathway to more effective hiring:
a wider talent pool + skill testing

As discussed earlier, companies that limit their recruiting to the typical profile of a highly qualified tech hire (commonly defined by a computer science degree from an Ivy League university) are missing out on staffing opportunities.

As Indeed points out, valuable technical experience can be gained in a variety of ways. For instance, graduates from coding bootcamps and other technical training schools are on the rise.

Employers might be wary of widening their hiring parameters, afraid that they’ll get more low-quality, low-skill candidates in the mix. But if you’re taking advantage of the opportunity to evaluate tech hires with pre-employment work sample tests, that concern is moot.

Nearly all of the U.S. employers surveyed (92%) said that evaluating the performance of potential tech hires with a code challenge is an important consideration in the hiring process.

This type of skill testing allows employers to open up positions to a wider applicant pool, and then make decisions based on their actual ability to perform the job rather than possibly irrelevant background information like academic records (or lack thereof).

At Crossover, we get that recruiting new tech hires—especially ones that have the right combination of skills to help your business meet its goals—is tough. That’s why we offer employers looking to fill tech positions access to our global pipeline of top 1% tech talent that has been pre-vetted with skill testing and performance evaluations.

Looking to make your next tech hire? Get in touch.