With breathtaking speed, innovation is pushing IT to the forefront of business competition. To compete, large and medium-sized enterprises have made substantial investments in areas like artificial intelligence, automation, blockchain, networked devices and enhanced cybersecurity. The result has been increased pressure on companies to realize ROI from these investments and to bring in talent that can make this happen, quickly. Unfortunately, for most companies, infusing talent for effective digital transformation is a top priority, but is easier said than done. In fact, IT job growth is expected to reach 13% by 2026 — but according to a study, more than 85% of hiring managers and recruiters find it challenging to acquire technical talent.
Even though companies are feeling the heat to realize the ROI from investments in digital transformation initiatives, if they don’t believe that they can attract people who can make the new technologies work, then the risk and uncertainty in pulling the trigger on purchases can be crippling. A Couchbase study found that 83% of IT leaders fear losing their jobs if their digital transformation efforts crash and burn. At the same time, is it riskier to do nothing?
Grappling with this choice creates inertia. The good news is that good workforce and location strategy can break through the inertia and deliver the talent. Better strategy, nevertheless, requires leaders to first understand the trends that breed the risk and uncertainty that prevents companies from reaping the benefits of digital transformation.
Here are a few of these trends:
Immigration Reform
For a while, companies have realized that sending jobs offshore hasn’t lived up to expectations consistently. Between travel costs, worker turnover, training time, time zone differences, cybersecurity risks and cultural differences, offshoring has become an increasingly difficult endeavor without the cost savings to justify it. As companies have experienced the realities of offshoring, they've embraced a workaround: importing workers who bring sought-after skills at a lower cost.
But it looks like that party is ending. The Trump administration is making good on its pledge to scrutinize H1B visa renewals, and legislation to codify these efforts has been introduced to Congress. What CIO wants to invest in training and onboarding an IT professional who might be gone within a few months?
Talent Squeeze
There is a difference between a shortage due to natural scarcity and one due to a correctable dearth of a specific good or service. I believe the current shortage in available tech talent is due to the latter. There are more than enough intelligent and motivated people in America who can do the work, but aren't yet trained. These people include veterans, STEM graduates from the natural sciences, mothers returning to work, fifty-somethings and displaced blue-collar workers. While capable, they don’t have the high-demand skills. As a result, companies would rather chase the existing supply of qualified talent and pay a premium for it. Yet, there is risk in any new hire — and when the new hire comes with a high price, it’s natural to think twice before making the offer.
Talent Misrepresentation
Embellishment of skills is alive and well in the IT world. While there remains a record number of open jobs, employers are extremely selective. Overstating one’s programming or developer skills can result not only in more offers, but also in an increased salary. Nevertheless, when a new employee who said he knows Python shows up to his first scrum with only the most rudimentary knowledge of coding, it can torpedo a project and cause other team members to question their managers’ competence.
Many companies now force candidates through rigorous exercises, making them prove what they put on their resumes. Putting a candidate through the paces may provide peace of mind, but it eats time that team members and managers don’t have. This is also a significant problem with staffing based in India, where it is less common to screen applications and verify prior employment.
Changing IT Landscape
As IT becomes a core business strategy rather than a support function, companies must source talent not with an understanding of the present, but a clear view of the future. However, the future is unpredictable. Customer demands change on a dime. Vendors get acquired and phased out. Regulations come and go. The “next big thing” emerges out of nowhere. Is the team in place today agile enough to change course when new technologies present new opportunities? If not, then what?
Training and Professional Development
As I mentioned, the potential talent is here in abundant supply, but somebody has to nurture it. It doesn’t take long for an intelligent adult with the right aptitude to learn a new coding language. For example, STEM programs are turning out plenty of scientists trying to find their way in academia, which many never do. And they haven’t had anywhere to turn other than coding academies that teach the skills but offer little by way of career development. Unfortunately, many companies suspended their training initiatives during the last bubble, and they aren’t equipped to harvest the potential talent all around them. Instead, they compete for certified software engineers, DevOps professionals and cloud architects from an existing talent pool that is insufficient to scale an enterprise-class workforce.
Companies can bring back training, but they often struggle to mobilize the investment and the resources to sustain professional development after a decade of trying to do more with less. Companies should instead turn to their partners that are building workforce capabilities through training, upskilling and reskilling existing and new talent.
All these challenges require companies to think beyond recruiting and culture. It's certainly important to close deals with candidates and retain talent, but the business imperative is to build for tomorrow through sophisticated workforce and location strategies. Long-term success requires the ability to deploy such teams into business scenarios that companies may not yet imagine, but from which they cannot run. For this reason, workforce strategies that mitigate risk and manage uncertainty don’t merely enable the C-suite to gain the competitive advantage – they are the competitive advantage.
