Workforce mobility and the skills gap are not new developments. Professionals have been relocating for work since the idea of the job was conceived, from Roman legionnaires travelling across the globe to the panners of the California Gold Rush moving to the frontier towns of the American West.
With the advent of the first Industrial Revolution, this has only become more commonplace. But what if that talent had stayed? What would the outcome have been for their towns or cities had they not left?
In the case of the Gold Rush and Industrial Revolution, we can only make educated guesses—but what if the tech talent leaving Boston was to stay, for instance? What impact would this have on your organization? Could you scale more rapidly and resiliently or launch products faster? It’s certainly worth considering.
In this article, we’ll explore the impact of the skills gap, answering why there’s a shortage of suitable talent for high-skilled jobs before we explore how businesses and governments can drive experts into the digital skills pipeline.
Why Is There a Talent Shortage?
According to research from CBRE Group’s Scoring Tech Talent report, between 2015 and 2019, Boston produced almost 50,000 graduates in technology subjects. During the same period, there were 11,000 tech jobs added to the economy—so where did the 39,000 potential software developers, quality analysts, DevOps professionals, and data scientists go?
The answer is likely that they were drawn to Seattle or Silicon Valley by the allure of having a FAANG organization on their resume or to the FinTech hotspots of New York and Toronto. Considering the average salary for a software developer in Seattle is $129,890 compared to Boston’s offering of $114,280, it’s no surprise that the workforce is drawn to these hubs.
Talent shortages can be caused by candidates having gaps in their hard or soft skills, which they have yet to gain through training or academic study. Still, across the board, the result is the same: businesses face disruption as they need help to discover, onboard, and retain the professionals that will drive productivity and quality within their organizations.
What Is the Impact of the Skills Gap?
While the skills gap is biting across the entire economy, some industries are experiencing this shortage more keenly, and where the greatest need to close these gaps is felt. Of all industries, the most likely to respond that they either needed to resolve skills gaps immediately—or that talent shortages would significantly impact business operations within the next five years—were:
- Data and analytics
- IT, mobile, and web design and development
- Executive management
- Human resources
- Sales and marketing
- Product and service design
With 85% of businesses struggling to recruit for IT and network security positions, the impact of not addressing the digital skills gap could be disastrous for organizations and their customers. When firms struggle to discover this critical talent, data breaches become likelier—and the commensurate fines and harm to business reputations can be hard to recover from.
The shift to cloud computing and the surge in artificial intelligence and machine learning technologies across all industries in 2023 threatens to leave behind large numbers of workers, meaning that the pressure on employees with the necessary expertise is increasing.
As a result, these professionals are missing out on learning and development opportunities. They are finding their work-life balance suffering—causing products and services to deteriorate, leading to further staff turnover as remaining employees become burnt out and choose to find new roles or transition into new careers.
The bottom line is that as the skills gap impacts businesses worldwide, revenues and profits will be hurt. Failing to address this talent shortage will harm innovation and quality.
How Can We Get Talent Into the Digital Skills Pipeline?
In 2021, the Baker administration launched the Massachusetts-focused Mass. FinTech Hub, following similar initiatives throughout the life sciences and digital health sectors.
The hope was to drive investment and create industry partnerships, creating a tech-forward ecosystem where organizations could thrive. As a result, the Mass. FinTech Hub has raised $5.9bn in funding, catalyzing the creation and scale-up activities of over 400 financial services firms and connecting with 105 world-leading academic institutions.
By all metrics, it’s been a resounding success, and the demand for talent is high. This economic activity needs talented professionals to empower business activities. So how can we attract and retain these individuals and ensure they have the hard and soft skills vital in today’s tech environment?
There might not be a silver bullet for addressing the digital skills gap in 2023. Instead, the “war for talent” must be fought on many fronts.
Build the Skills of Your Workforce
Attracting already-skilled professionals is a challenge—retaining them is another problem entirely. Often these experts are driven by having their expertise meet their long-term career ambitions. Higher staff turnover is possible if you’re not already offering learning and development opportunities for these valuable individuals.
At the same time, the struggle for talent can be eased by ensuring the learning and development opportunities within your workplace are prepared to address future needs. This allows you to hire for a role's core competencies while enabling you to up-skill your team to enhance efficiency and productivity in their day-to-day tasks.
Apprenticeships and internships can help to teach the hard, technical skills that often require putting what an employee has learned into practice, but what about the soft skills—teamwork, negotiation, and communication—that are integral to organizations?
While these interpersonal skills can be more difficult to master than the in-demand hard skills, many professional bodies are now providing training in leadership, consultative sales, and collaboration which can help companies ensure their staff is prepared to address the issues that arise in their work.
Offer More Competitive Salaries and Benefits
As the digital and highly technical skills necessary for driving efficiency and productivity in the modern business environment become scarcer, those who possess them will expect their expertise to be reflected in their salaries.
Companies looking to retain their highest performers must regularly assess the market to ensure that their remuneration and benefits remain competitive and offer performance and cost-of-living-related uplifts on an annual basis.
With the advent of remote working due to the COVID-19 pandemic, it’s important to search not only for competitive rates in your immediate vicinity but across the entire nation—since you’re now competing with these organizations for talent.
At the same time, businesses will need to ensure that not only are they providing early-career professionals with suitable payment for their knowledge but also the benefits that will encourage long-term loyalty—whether that’s paying for the courses and training that will keep their expertise up to date, or providing healthcare insurance and increasing paid time off.
Embrace A Results-Driven Workplace Culture
Implementing a results-driven workplace culture can often help attract and retain professionals to address your internal skills gap or talent shortage. Businesses that are less focused on presenteeism or enforcing set hours and more concentrated on the quality of their employees’ output are typically happier and more motivated.
This shift needs to be supported by a recruitment drive that looks for the right talent for a role, not just candidates that match the short and long lists of technical requirements. Businesses must hire individuals who motivate themselves, work to stringent deadlines, and deliver consistently.
Measuring performance in such an environment can be difficult, particularly for establishing training needs for new recruits. As a result, organizations can establish SMART—specific, measurable, actionable, relevant, and time-bound—goals which can assess how effectively a deliverable meets a target.
Of course, regular check-ins, 1-2-1s, and coaching are necessary for this way of working, but the benefits for employee well-being and overall workplace productivity can be huge.
Implement Hybrid and Remote Roles
Of all the impacts on the world of work that the COVID-19 pandemic has had, the takeup of hybrid and remote roles across many industries has been the most visible. Flexibility and work-life balance remain a priority for most workers looking for new roles, regardless of their specialization.
Businesses can leverage the demand for remote and hybrid roles to their benefit, with organizations able to take advantage of several productivity and cost savings, such as:
- Larger talent pools, with access to talent in previously-unattainable locations
- Decreased time to hire
- An average saving of $11,000 per year for each remote worker
- Happier employees, who are, in turn, more loyal and productive members of their teams
The case for embracing remote working is ever-strengthening. 92% of employees anticipate working from home at least one day a week, and 80% expect at least three days of remote work. In addition, 59% of workers are more likely to choose roles that offer remote work over those who do not.
Focus on Diversity and Inclusivity
Not only does a focus on diversity, equality, and inclusion improve the perception of your business amongst customers and potential recruits—as well as widen the pool of candidates you can access to address any talent shortage—but it can also have a marked effect on your bottom line.
Indeed, companies in the top quartile of diversity metrics for their industries were found by McKinsey & Company to be 25% more likely to have above-average profitability.
Companies looking to improve their diversity and inclusivity efforts can think creatively about how they can bring new recruits on board. For instance, candidates who report struggling in interviews can switch from the common across-the-table interview technique to a longer assessment or internship period. This can help them to bring neurodiverse individuals on board who might otherwise struggle to highlight their expertise and ability.
Utilize the Services of a Specialist Recruitment Agency
Can a recruitment company help you to find the right people for your organization? In short, yes.
A specialist recruitment agency will work closely with a business to understand its client’s market position within the broader industry and any requirements for a role they are hiring for before they identify, engage, and source candidates. This ensures that candidates put forward for an interview will fit well with their immediate needs and their wider company culture.
Most recruiters will have access to networks of passive, highly-skilled candidates that won’t actively search for roles on job boards or company websites, meaning that working with a staffing agency can expand your reach and help you to acquire the “unicorns” that will drive innovation in your organization.
Supporting You in Addressing the Skills Shortage
At MCS Group, our consultants have over a decade of experience working with businesses to recruit for roles with niche technical requirements. As subject matter experts, we can help to support organizations in their scale-up activities, so whether you’re looking to build an entire team or hire for a specific, director-level role, contact us to learn how we can help you.