skills shortage

ARTICLE | April 13, 2023

Addressing IT's skills shortage

Training enough people for crucial and expanding tech roles will require innovative thinking

Most companies understand that digital transformation is the key to navigating today’s business environment. But workers with the IT skills companies need are in short supply—and the situation is only growing more extreme.

Over the next five years, for example, the U.S. will face an exploding demand for tech workers with some 5.9 million new positions added and another 23.5 million existing roles requiring reskilling or upskilling because of automation, according to academic publisher and research company Pearson. Pearson paired with ServiceNow to research the impact of AI on today's force, which roles might be phased out, and how affected workers with transferable skills could prepare themselves for the future job market.

Yet there simply aren't enough skilled workers to fill those future positions. According to data from consultancy Korn Ferry, the "technology, media, and telecommunications" sector will have to reckon with a global skills shortage of 4.3 million workers by the end of this decade. That deficit could reach 1.2 million in the U.S. alone.


Top leadership priorities in 2023

Business leaders are well aware of the uphill battle they’re facing. In a survey carried out last year, market data provider IDC found that C-suite executives ranked getting the right digital talent as the No. 1 challenge to running a successful digital business.

"Most companies weren’t expecting such a boost in need before the pandemic hit,” says Leonardo Freitas, a research manager in IDC's European skills practice. Plus, big changes like the move to cloud computing happened a lot quicker once millions of people started working from home during the pandemic. “That created a massive squeeze in the job market,” Freitas says.

IDC reckons that 90% of all organizations will face skills shortages related to digital transformation by 2025—and risk a whopping $6.5 trillion in costs and lost revenue due to delayed product releases, reduced customer satisfaction, and loss of business.

Luckily, individual businesses can take action now to make sure they come out ahead and take a longer-term view when planning their talent strategy, according to Freitas.

Rather than focusing on ad-hoc training as the need arises for individual projects, companies should embrace digital transformation as a way to insulate their workers from the worst impacts already roiling underprepared businesses and industries. Existing roles will be affected as well, which makes proactive reskilling or upskilling of existing employees an efficient way to address the growing skills gap right now.

Greater automation and augmentation of existing roles could make more than 1 million U.S. workers redundant by 2027, according to Richard George, vice president for workforce apps and analytics at Pearson.

“There's two ways to react to new technologies: you can ignore it, or you can be part of the change,” says George. “Some employees will find that their job won't exist anymore and then it's a business decision whether you want to retain those individuals and find new roles for them.”

There's two ways to react to new technologies: you can ignore it, or you can be part of the change

In the next several years, app developers will be among the most sought-after workers to carry out digital transformation and meet ever-increasing demands on technology, according to Pearson's research. Over the same period, roles across all industries will be in need of retraining and reskilling due to advances in automation. This represents a rich pool of talent in need of new opportunities that companies can tap into, in many cases without even turning to an external search. It’s why big reskilling programs are already underway at companies like SAP, Google, and Amazon Web Services.

In addition to training the next crop of tech experts, IDC's Freitas says companies should not overlook the opportunity to equip their general, non-tech workforce with new skills and tools to grab some of the lower-hanging fruit in their own projects and processes. “If you're able to provide non-IT workers with tools to actually aid in the digital transformation process, that will be a game changer,” he says.

Aside from corporate solutions, governments also can do a lot to address this issue. By promoting policies that help make careers in technology more attractive to students and encouraging technical education, governments can lay the groundwork for a future technologically sophisticated workforce.

Still, experts warn that even with government support, companies will have a lot to do, according to a post by Werner Penk, president of the global technology market practice at consultancy Korn Ferry: “The onus falls on companies to train workers, [but] also to encourage governments to rethink education programs to generate the talent pipelines the industry will require.”

n the end, both approaches will be necessary, especially because businesses cannot afford to wait for public solutions to enlarge the talent pool. Freitas describes what's needed as trying to fix a car while it's in motion. And these days everyone is a mechanic, because businesses of all kinds, in every industry are dependent on it to function.

“The beauty and the curse of IT is that it’s everywhere,” Freitas says. “No one can run away from technology anymore if they want to survive.”


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Yannic Rack

Yannic Rack is a journalist based in Scotland and mostly writes about climate change and sustainability. His work has appeared in Fast Company, Corporate Knights and other publications.

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