CXO

Report: 40% of employers worldwide face talent shortages, driven by IT

The talent shortage across industries is now at its highest since 2007, driven in part by demand for IT roles, according to research from ManpowerGroup. Now, employers are turning to internal training to fill the gaps.

Employers, start your engines: The race to capture top tech talent is at its toughest level in nearly a decade. Some 40% of employers globally report that they are experiencing difficulty filling jobs—the highest number since 2007, according to ManpowerGroup's 11th-annual Talent Shortage Survey. To fill the gaps, employers are increasingly training current employees on necessary, hard-to-find skills, the survey found.

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The survey of 42,300 employers across 43 countries and territories found that demand for IT skills, specifically, has skyrocketed: IT personnel, including developers, programmers, database administrators, and IT leaders and managers, jumped from the ninth "most difficult to fill" positions to the second on a global scale.

"Our survey reflects a changing landscape, in terms of demand employers are seeing and the concentration we're putting on the IT profession in general," said Chris Layden, managing director of Experis, ManpowerGroup's professional resourcing and project-based solutions brand.

SEE: Can LinkedIn Learning help train your employees?

The only roles that employers reported were harder to fill than IT were in the skilled trades, such as electricians, carpenters, and welders. Coming in after IT were sales representatives, followed by engineers and technicians.

Employers listed the following reasons for why it was hard to fill positions:

  • Lack of available applicants/no applicants (24%)
  • Lack of hard skills/technical competencies (19%)
  • Lack of experience (19%)
  • Looking for more pay than is offered (14%)
  • Lack of soft skills/workplace competencies (11%)

Lack of applicants was the leading reason why employers were facing skills gaps, the survey found. "It's not so much about a shortage of talent, but a shortage of the requisite skills needed to deal with this world of disruption," said Erica Volini, leader of Deloitte's HR Transformation practice. "It's also the fact that there is so much competition out there to get this talent, especially with tech companies."

The rise of internal training

Another key finding of the Talent Shortage Survey was the trend toward internal training: More than half of employers now train and develop existing employees to fill open positions—up from just 20% in 2015.

"When you look at the post-recession period of the last seven years, it's not a surprise—as revenues and profits declined, training budgets took a hit," Layden said. Now, "employers are [training] because they need to. They are starting to see the faster path to upskilling is driving it internally."

And job training is an important factor for job-seekers. For millennials, the youngest generation of workers, the availability of training and development is one of the top criteria they look for when choosing a place to work, Layden said. Free and low-cost online training programs are also beginning to shift the marketplace.

Volini said she is seeing a trend she called "network of teams," or the idea that organizations are shifting from traditional hierarchies to more team-based work, training employees to have different skillsets.

"If you do that well, and develop an internal candidate pool that can move around the organization, you don't lose institutional knowledge, and you get productivity from day one," Volini said. "I'm a firm believer that internal talent is often the best way to fill a position if you can."

However, when companies expand into new products, businesses, or geographic areas, it's often necessary to inject fresh talent as well, she said.

Solutions for employers

Other than training and developing current staff, employers reported a variety of other solutions for finding the right new employees, including recruiting outside the talent pool (36%), exploring alternative sourcing strategies (28%), providing additional benefits and perks to recruits (27%), and paying a higher salary package to candidates (26%).

Another strategy is to differentiate your employee experience from other companies, Volini said. This experience starts from the moment a candidate finds your job posting and looks at your website, Volini said, to the application process and onboarding. Companies must consider what the recruiting experience looks like, and how it conveys your brand and mission, she said.

"Today's generation is more interested in the purpose, values, and mission of your company than the job they're going to do," Volini said. "They want to impact not just the bottom line of the company, but also the community."

Companies should also ensure tech is central to the employee experience, Volini said. "Today's talent wants the same tech experience when they come into the work environment as their home environment," Volini said. "It communicates that bringing in the latest innovations is part of the culture."

In the age of social media, when employees and job candidates can post reviews on sites like Glassdoor and LinkedIn, it's important to ensure those interactions reflect the brand and culture you're trying to create, she added.

To attract talent, Volini said she sees companies looking to innovative reward programs instead of traditional signing bonus-type incentives. For example, one tech company recently decided to offer paid time off for community service, in addition to regular vacation days. "They're tying incentives to the company's mission, and giving people a stake in the company's performance," she said.

"Responding to the talent crisis is inextricably linked to your employment brand, culture, and processes," Volini said. "The best way to deal with it is not to go out and put out more online ads. The starting point is to ask yourself, 'Are we promoting our culture in a way that attracts the top talent in the market?'"

Pay more, train more

There are few strong measures of hiring or employer training practices, so all figures should be taken with a grain of salt, according to Peter Cappelli, a professor of management at The Wharton School and director of Wharton's Center for Human Resources.

"Whether I find it difficult to secure something in a market depends on what I'm looking for and what I want to pay," Cappelli said. "It makes sense to search a bit, so the fact that I can't easily find precisely the car I'd like at the price I want to pay for it is no evidence of a car shortage. The question to ask employers in this case is whether if they paid more, they could find what they want."

The answer is almost always yes, Cappelli said, so it isn't necessarily a shortage—it is just being unrealistic as to what they want and/or the price they want to pay.

"Finding the talent an employer wants is the essence of talent management, which is a business task," Cappelli said. "It's not a public policy issue to provide employers with a workforce. The answer to perceived difficulties in finding talent has been the same for generations: Pay more, train more, or restructure jobs or use technology to become more productive—this is how economies grow."

The 3 big takeaways for TechRepublic readers

  1. Forty percent of employers globally report that they are experiencing difficulty filling jobs—the highest proportion since 2007, according to ManpowerGroup's 11th-annual Talent Shortage Survey.
  2. To fill the skills gaps, more than half of employers said they are training and developing existing employees to fill open positions, up from 20% of employers who said they did so in 2015.
  3. Experts say employers should look to differentiate themselves by offering job candidates a clear picture of the company's culture and purpose, with creative hiring incentives.

Also see

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Image: iStockphoto/cacaroot

About Alison DeNisco Rayome

Alison DeNisco Rayome is a Staff Writer for TechRepublic. She covers CXO, cybersecurity, and the convergence of tech and the workplace.

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