A shortage, with no end in sight
With enterprises of all kinds gearing up to implement digital strategies, the search for tech talent is starting to look less like a competition, and more like a war. One recent survey of global CIOs found that 65% felt a shortage of talent was holding their organization back - the highest rate in a decade.
Skills shortage continues
By all accounts this is likely to be a long, drawn-out struggle that will be tough for even the best and brightest companies to win. Management consultant Korn Ferry has warned that the seemingly unstoppable digital revolution may be “about to hit a wall” as the skills shortage in the global tech sector climbs to 4.3 million people by 2030, costing a staggering US$450 billion in lost output.
The shortfall may be especially acute when it comes to certain skills - artificial intelligence, cloud computing and data science are typically high on the list of those in demand - or markets. But this is a broad and genuinely international battle. India is the only major economy projected to enjoy a skilled technology labor surplus in just over a decade’s time.
2030: Global technology, media and telecommunications talent deficit by economy
Companies are adopting a range of tactics in response to these realities: hiking salaries, easing dress codes, even funding weddings or paying off student loans in a bid to boost their appeal to new hires. Some are looking to outsourcing or automation to ease the labor crunch. But outsourcing isn’t a realistic option for every project, and “automation doesn’t reduce the need for talent - it just changes the kind of talent that you need,” says Thoughtworks Chief Talent Officer, Joanna Parke.
Ad-hoc steps to attract and retain talent may provide temporary respite, but, according to Parke, fail to address the fundamental issue. “The typical talent model isn’t sufficient anymore. The supply-demand problem will continue to get worse, and that will force companies to think differently about how talent is acquired and developed.”
Just as they’ve transformed other aspects of their operations, businesses need to develop entirely new approaches to talent fit for an era in which demands are constantly shifting; the boundaries between roles are increasingly porous; and no one person is likely to have all the skills needed to see a project through from start to finish.
Total victory in the talent war may not be possible - but any firm can take decisive steps to make their talent plans more future-proof. And some of these steps may not even require setting foot on the battlefield.
Forget everything you've heard about hiring
One way for companies to gain ground in the talent race is to get to know themselves a little better. In many firms there’s a tendency to source talent based on perceptions of what the market is demanding, rather than the company’s individual needs or business trajectory. This has fueled full-blown hiring crazes for certain roles, as seen in recent years with data scientists or cybersecurity engineers.
Top 5 highest-paying and most recruited tech jobs 2019
“It’s no secret that every year there’s a job title or a few job titles that are particularly hot,” Parke says. “That almost creates the demand for some companies. They hear everybody’s hiring data scientists so all of a sudden, they need data scientists too. Following that hype cycle, hiring a bunch of data scientists and then trying to figure out what to do with them when they arrive, is something we see often.”
But talent is exactly where each enterprise should be charting its own path. “Talent strategy has to start with the overall business strategy,” says Parke. “It requires understanding what your company is trying to achieve in the next couple of years and how you might go about doing that, then working backwards and figuring out the specific skills that are needed to get there. It’s a skills-based, rather than a job-based approach.”
“Your talent strategy has to connect with what you’re offering the market,” agrees Ruth Gorman, Global Talent Development Program Lead at Thoughtworks. “If you’re clear on that, you can identify the capabilities you need as a business to be confident in your ability to deliver.”
For talent strategy to connect to broader business goals it has to be the result of a “collaborative effort” that involves senior stakeholders from across the enterprise, Parke notes, not a plan cooked up by HR alone. Much as technology is now generally recognized as integral to the entire business and not the sole property of IT, talent should be widely understood as a source of competitive advantage, and collective responsibility.
“Talent strategy has to start with the overall business strategy. It requires understanding what your company is trying to achieve in the next couple of years and how you might go about doing that, then working backwards and figuring out the specific skills that are needed to get there. It’s a skills-based, rather than a job-based approach.”
Joanna Parke, Chief Talent Officer, Thoughtworks
Drawing on the input of various functions also ensures that the organization develops a holistic picture of its strengths and weaknesses. As in other areas, accurate data can be a powerful enabler of this process.
“It’s crucial that you tie talent requirements to real opportunities,” says Sameer Soman, Managing Director of Thoughtworks India. “For example, what are your sales and marketing teams looking at, what are they hearing from customers? Converting that knowledge into something a recruitment team can use can’t happen unless you have a data-oriented approach, with good capturing mechanisms and systems.”
Building on data from sources such as recruitment exercises and performance reviews can help the organization assemble a more accurate portfolio of its current skills and capabilities, Soman explains. By comparing this with data from the demand side of the organization on customer behavior and industry trends, the enterprise can identify current and future “capability gaps” where development and hiring energies need to be focused.
Once the firm has a realistic sense of its strengths and skills shortfalls, focus should shift to fostering the competencies that are core to the business internally, and identifying less critical capabilities that can perhaps be ‘bolted on’ through other means.
“Even though there’s a trend towards more insourcing, less outsourcing, larger enterprises are recognizing that they’re not ever going to be able to have all the capabilities they need in-house,” says Parke. “It’s important to distinguish between the core competencies that you really need to have internally - and what you can get away with not being an expert in and can access somewhere else.”
The talent digital demands
The balance of talent each company needs may vary, but as business becomes more digital in nature there are skills and capabilities that are generally in focus. Some are tied to specific technologies, like artificial intelligence and machine learning. To identify these “one of the critical things is looking at companies which are at the forefront of computer and scientific discovery, and pushing the boundaries,” Soman says. “They’ll give you an idea of where future trends are going.”
Yet it would also be a mistake to make technology the only pillar of a talent strategy - for the simple reason that it’s a constantly moving target. “Having a degree in computer science or experience with a particular type of technology - these things are becoming obsolete in a way because the rate of change is so high,” explains Soman.
A better approach is to seek out the ‘soft’ skills that contribute to the enterprise’s capacity for change - which in the current (and future) business landscape is the only real constant.
“Every company now as they bring technology talent in, is recognizing that going out and hiring someone who has the skills that you need today is only going to take you so far,” says Parke. “What happens when the next capability or the next technology comes up? Curiosity and the ability to learn new things is the number one future-proof skill that people can have in this environment.”
Given the increasingly cross-functional nature of technology projects and the degree to which technology has to integrate with the rest of the business, the ability to collaborate and communicate effectively have also become crucial elements of the talent equation.
“If you’re just going to the computer science department to find a diverse range of people, you’re not going to be very successful,” Parke says. “We found that we could hire people from other STEM backgrounds, and even go beyond STEM, to find people who have music or history degrees that picked up programming as a hobby. It’s all based on a foundation of aptitude. If you have a passion for learning then we can handle the rest.”
Extending the search for talent to non-traditional disciplines also means “you’re not continuing to fight over the same not-so-diverse talent pool,” notes Gorman. “It’s an untapped potential opportunity, and all the evidence shows that the more diverse your team, the more creative and effective you are with problem-solving. Even moving from requiring a computer science degree to any degree is a great starting point.”
In fact, Gorman adds, companies may want to go beyond that, to question whether degrees are necessary at all for certain roles - an approach research indicates some firms are already adopting. “If you’re looking for an element of technical skill and craft, degrees are great. But if you’re also looking for collaboration, curiosity and passion, you can get that from many different places. Breaking the traditions of doing things the way you’ve always done them really opens up that diversity of talent. And one thing we’ve found is that it’s really hard to get going, but diversity attracts diversity.”
“The technology landscape has expanded so much that it’s impossible for one person to have all of the skills that are needed to even launch a simple product these days,” Parke explains. “It’s not just about getting better outcomes if you collaborate - it’s a necessity. Obviously technical competency is important, but if you take a technical superstar with very low social skills, versus someone who’s middle of the road technology-wise but has the ability to communicate and collaborate, we believe high-performing teams are going to give you better results than heroic individuals every time.”
The characteristics required in a digital enterprise - collaboration, openness to new ideas, willingness to experiment - also necessitate diversity, not only in terms of gender and ethnicity, but also in disciplines and educational backgrounds.
% of STEM workers with degrees
Of course, the main reason employers place a premium on degrees and certifications is that they’re a solid indicator of a candidate possessing certain skills or suitability for a designated role. Taking these out of the picture and trying to evaluate talent on soft skills like communication and curiosity may seem a less exact science.
Yet according to those who manage talent at Thoughtworks, this can absolutely be done in a systematic way that generates results. It just requires attuning the enterprise to different criteria - such as, Gorman points out, participation in community groups and conferences.
“There are ways that we assess (soft skills) in the interview process,” Parke adds. “As much as possible we try and mimic the way we actually work. When someone comes in for a technical developer interview, we’ll sit down with them and pair program. If we introduce a new concept, or challenge them on the way they made a design decision - how do they respond to that? Can they pick up new things quickly? Are they interested in learning? So you’re looking for those types of behavioral expressions, as well as at the background - do they have a demonstrated track record of a passion for learning, interest in a wide variety of subjects?”
“One of the critical things we look at is open source contributions,” Soman says. “If you’re interested and curious as a technologist, there’s a good chance you’ve taken opportunities to use platforms like GitHub and external sources to collaborate with other developers outside your organization to contribute to new technology spaces.”
Soft skills checklist
Soft skills are sometimes viewed as an immutable by-product of personality and temperament, but just as they can be assessed, they can be ‘taught’ and fostered by the enterprise.
“You can learn to be a collaborator if you’re not used to it,” says Soman. “Looking at collaboration as a habit can help organizations bring out that gene in great software developers. There are a bunch of things you can do; one is plainly and simply saying collaboration is important and then creating environments like lunch and learn sessions that encourage it, which automatically creates peer pressure to participate in a culture of learning. If you learn something interesting from a peer, it becomes your implicit responsibility to do something similar.”
“There are processes and ceremonies that reinforce collaboration and inclusion,” agrees Parke. “Design storming sessions, retrospectives, getting a group together at a whiteboard to problem-solve - these are all things that invite people to share ideas and give them permission to do so. Continued education around unconscious bias and difficult conversations around diversity and inclusivity are also necessary, as there are often things people do that they’re not even aware of that make it uncomfortable for others to share ideas. Those have to be continually called out.”
“Looking at collaboration as a habit can help organizations bring out that gene in great software developers. There are a bunch of things you can do; one is plainly and simply saying collaboration is important and then creating environments like lunch and learn sessions that encourage it."
Sameer Soman, Managing Director, Thoughtworks India
Learning to look inside
In a time of talent scarcity, it’s these efforts to continuously foster and enhance existing internal capabilities that give enterprises a competitive edge. “The number one mistake I see companies making today is feeling like they have to go out and hire (digital) talent,” Parke says. “You can’t just hire your way out of this war.”
There’s a flipside to the emphasis enterprises tend to place on fresh recruits, Parke says. “A lot of companies are missing out on a lot of great people they have internally, and tend to undervalue the knowledge of the business that their existing employees have.”
Undervaluing current employees can be reckless in an environment where “everyone who has digital capabilities is getting inundated by recruiters on a daily basis,” Parke points out. “You have to think of your employees as people you’re constantly re-recruiting. The average time that people are spending at a company is decreasing, attrition overall in the industry is increasing. People think about their careers in a much more fluid way.”
This gives rise to the need to create what Thoughtworks has termed a “cultivation culture.” Instead of one-off programs at defined intervals, opportunities to learn and develop are constant, and training and development a shared duty embedded in daily interactions.
“When we think about how quickly technology moves on and client expectations change, the ability to learn as an organization is one of our differentiators, and that needs to go down to the individual level,” Gorman says. “We’ve put a lot of focus on the collective responsibility to grow each other, to share knowledge, to teach, so as a collective we can be more impactful and pivot as we need to around technology change and client demands.”
“One of our explicit expectations is that everybody cultivates others,” Soman explains. “That means taking a keen interest in your colleagues, what their aspirations are, what their skills and talents are, what they want to do and giving those opportunities to them. And if you’re a senior leader, once you provide that opportunity, to get out of the way.”
What does cultivation culture look like in practice? According to Gorman, who has seen it take root with Thoughtworks teams in India, it’s defined mainly by a clearly articulated focus and small but persistent practices “that make the concept of cultivation part of the vocabulary.”
This means teams coming up with their own “rituals” - such as feedback sessions, self-reflection exercises or regular one-on-one conversations about career development that ensure knowledge-sharing is a constant process. At the same time, team leaders should, through-re-skilling if necessary, be given the mandate and capabilities to deliver effective feedback, and identify and act on opportunities to support the development and learning of their teams.
Gorman says Thoughtworks is looking at how support for cultivation culture might be factored into review processes, but that it doesn’t necessarily require a performance component or strictly defined targets; the intent is to have it develop organically.
“The feedback we’ve had so far is that a lot of people were doing these activities already; they just never appreciated that they were part of something that was valued by the organization,” she explains. “There’s now a really strong alignment around the idea that cultivation is something we should be doing, because the success of being able to deliver to clients and have industry impact is all based on the effectiveness of the team.”
Purpose, not perks
Continuous learning can also be a major contributor to employee retention and engagement. In one recent global poll by LinkedIn, almost three-quarters of employees said they wanted to learn in their spare time at work, and 94% said they would stay at a company longer if it invested in their learning and development. Notably, active learners were also more likely to find a sense of purpose in their work - and purpose is by most accounts a more powerful motivator than pay or perks.
“The number one thing top digital talent wants is a connection not just to the business, but to the end customer, so they can directly see the impact their work has,” says Parke. “Secondly, they’re looking to be part of an organization that has a bright future and purpose. People are really attracted to mission-driven organizations, where they feel like the work they do every day matters. They’re also looking for an environment where they work with other smart people, are given development opportunities, and are challenged to keep their skills current.”
“Stretching people is so crucial, and providing those opportunities for people to learn and do something new on the job motivates them in a big way,” agrees Soman. Thoughtworks’ new hires, for example, are given these opportunities - and presented with problems to solve - at Thoughtworks University, a five-week program that brings them to our offices in China or India for a crash-course in the challenges clients typically face, as well as the chance to develop a network of mentors and peers.
Talent also gravitates towards employers that seek out, and, crucially, are seen to act on the views of their employees, Gorman notes. Companies should therefore create clear channels for employees to express themselves without fear of negative repercussions, and ensure this feedback is reflected in decision-making.
“If you don’t act on (feedback), over time people will stop giving it to you because they don’t see the impact,” she says. “Having the right channels for feedback is one thing, but you also need to be sincere and genuine about what you do with that information.”
Another growing priority for skilled workers is flexible working arrangements. Research by human resources consultancy Mercer into global talent trends shows just over half of employees want their companies to offer more flexible work options, and that 40% feel such options would help them thrive in their jobs. “Flexibility has almost become a requirement for top talent,” says Parke.
Thankfully these demands are easier for employers to meet than ever. As the technologies that support remote working, such as virtual conferencing and remote programming tools, have improved, flexible work structures can be instituted at little or no cost to convenience or productivity. By effectively eroding the distances between physical offices and enabling people to collaborate across locations and time zones, these technologies also extend the labor pool, and enable enterprises to adopt talent strategies that are truly international.
“Companies are starting to hire remote workers just out of necessity due to the talent shortage,” Parke points out. “And the technological advances enabling that are astounding. The ability for someone to be truly plugged in and productive while working remotely has vastly increased.”
“As soon you open a new possible location, your time considerations change significantly,” says Soman. “There’s more and more flexibility in the hours of the day you work. Leaving the definition of what productive work hours are down to each employee rather than the company deciding is the best thing to do, but that requires better collaboration tools and techniques. And investment in those is as crucial as allowing people to pull up at whichever location they want to.”
Does work have a future?
The war for digital talent is only likely to intensify in the years and decades ahead. “It’s a one-way street,” says Soman. “More companies are becoming ‘tech at core.’ 10 or 15 years back, the opportunities were at software organizations. More recently, it’s been Silicon Valley. If you fast forward a few years, almost every organization that you know, whether a bank or consumer goods company, is going to need the same type of digital talent.”
However, there are positive aspects to this trend. “My perspective is the talent market will respond,” Soman says. “I see a lot of positive movement, from online learning to the democratization of technology knowledge. You no longer have to go to a college to get the best technology understanding. It’s a great time for digital talent.”
Parke believes more employers will step up to cultivate the kind of talent they require. “We’re going to see a huge increase in companies taking on the responsibilities of creating talent. We can no longer rely on governments or traditional institutions to produce the skills and answer all the needs we have. Even the cost of post-secondary education is dramatically increasing in many places, which cuts out a big segment of the population that can’t afford access.”
Successful companies will therefore be busy “redefining the profile of what they see as digital talent, and thinking about it in a much more expansive way. They’re going to start developing more programs to reskill current employees, or upskill people coming from roles that have been automated or eliminated.”
For Gorman, a defining future trend will be flexible working gaining momentum to the point that it challenges the nature of work itself.
“There are some organizations that are still not aware how big a thing remote and flexible working is becoming,” she says. “I had a conversation with a relatively new graduate-level employee whose desire was to work 12 months in the technology role that he had, and then 12 months in another country working for a charity - that’s the lifestyle he envisages. The concept of work itself is changing; it’s almost like work and life are merging closer together.”
“We should be asking whether in 5 or 10 years people will even want to be permanent employees anymore. There’s likely to be some radical change and disruption in that space, and I don’t think many organizations are fully prepared for what it might look like.”
Ruth Gorman, Global Talent Development Program Lead, Thoughtworks
Success in the battle for digital talent will therefore require enterprises to build and draw on the same strengths that will serve them well in other aspects of digital transformation - the willingness to acknowledge that old models may not continue to apply, and the appetite and agility to respond decisively and effectively to change, even as it accelerates.