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Leadership / Workforce

Tech skills shortages delay two-thirds of digital transformation projects

The tech skills shortage is worse than ever. For CIOs, retraining existing staff and trying to retain the most promising talent could be a solution.

An “unprecedented” lack of tech skills is threatening the progress of digital transformation projects at more than two-thirds of companies around the world polled in a new survey of tech leaders. Sixty-seven per cent of senior technology decision-makers say that a skills shortage is preventing their companies from keeping up with the pace of change, according to the latest Digital Leadership Report from Harvey Nash.

UK tech skills shortage

Tech staff, particularly cybersecurity experts, are in higher demand than ever since Covid-19 struck. (Photo by Alvarez/istock)

The UK tech skills shortage mirrors the global problem: 66% of digital leaders in Britain say that lack of talent is responsible for slower digital transformation in their organisations. The UK’s talent shortage is most acute around cybersecurity (42%), big data and analytics (36%), and technical architecture (33%). Developers are also increasingly in demand and, after HGV drivers and nurses, third in UK roles with the biggest skills shortage.

Although the skills shortage has been a constant theme in the UK tech industry for many years, the situation has become more problematic in recent months, says Jo Graham, CIO at online retailer Boohoo.com.

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“It is unprecedented," she says. "In previous years it's been more around niche or emerging technologies, whereas this time it's absolutely across the board and what I think puts it in the unprecedented category is that it's global."

Graham says that whereas in the past companies would resort to partners and flex into offshore or nearshore resource pools, they are now struggling to find the skills they need in those regions. Another situation she is witnessing more often as a by-product of the skills shortage is businesses counter-offering “like never before” because they also want to fill those vacancies in their own organisations.

The Digital Leadership Report found that eight in ten digital leaders in the UK find job retention among their staff more difficult as post-pandemic life priorities shift. In addition, four in ten tech executives say they cannot retain key talent as long as they would like because staff are being offered higher salaries elsewhere.

We’re seeing ridiculous salary offers, doubling of salaries for developers based on moving to different industries.
Jo Graham, boohoo.com

“We’re seeing ridiculous salary offers, doubling of salaries for developers based on moving to different industries and even first-line engineering staff having their salaries doubled, so it's across the board,” said Graham. “The thing that worries me is what happens in a year or so's time when the market goes back to normal with all of this wage inflation. I think it's going to get quite interesting.”

Focus on retaining and developing existing talent

Amidst this skills crisis, IT leaders should tap into the opportunities that the pandemic has presented to retain talent by being more mindful of people’s needs and priorities, including the possibility to adopt hybrid models of working, and hiring people in different geographies, said Harvey Nash Group CEO Ben White.

“What that means is that now you can look at skills from many different dimensions and you can have people working in your organisation that instead of working from the office, can work in different parts of the country, even in different parts of the world," White says. "I think that will help us in so many ways."

Boohoo.com’s Graham said that her focus to tackle the skills shortage has been on retention and building a steady pipeline of talent through apprenticeships, graduate internships and other early years career focus. Her approach is mimicked by 54% of IT leaders in the UK polled for the report, who said they are planning to cross-train their staff in other parts of their organisations. Apprenticeships are also expected to increase, with 52% of digital executives saying that they will be offering this kind of placement in 2022.

“I can't influence what's going on in the middle in terms of recruiting staff so I'm focusing on the things I can influence, which is retention and early careers,” Graham said, adding that she puts an emphasis on ensuring that junior staff feel welcomed by doing strong inductions and team engagement initiatives such as team lunches and socials. "There’s lots going on and not purely focused on salary because I think the minute you have to to start throwing money at people you've kind of lost the battle," she says.

White agrees: “Just paying more without fixing other things won't keep them [staff] in your business so you've got to make sure that you do more than that," he says.

Cristina Lago

Associate editor

Cristina Lago is associate editor of Tech Monitor.