Success depends on the quality of talent a business can attract, develop and deploy to its most strategic work. This is especially true for organizations with a focus on technical talent, where the labor market has changed dramatically in recent years and in a few very important ways. Even as recent events continue to unfold, demand for these resources is increasing because they are instrumental in supporting the digital transformation that is helping businesses compete as well as manage through the current crisis. Meanwhile, the skills required for success in these roles are rapidly evolving, and the younger demographic profile of this group brings with it a wide range of different expectations for employers. Through our client work and conversations with technology industry leaders, we’ve outlined below the most pressing talent challenges that technology-centric organizations face today and will struggle to address for years to come.
Challenge: Work requirements are becoming increasingly specialized. In software and enterprise systems, coding practices and development languages evolve rapidly with many organizations now operating on bespoke platforms or integrated systems that are essentially unique to their organization. Just a few decades ago the automobile and its supporting systems were uncomplicated enough to allow a single mechanic to handle all manner of repairs. Today you’re more likely to go to a different vendor for brakes, transmission, oil change, etc. because specialists can address each need more efficiently, more effectively and at a lower cost. We are seeing a similar transition in many professional domains (e.g., software developer, marketer, engineer) with jobs fragmenting into a complex set of tasks. These tasks are performed by a network of roles that individually bring critical skill sets that are rarely, if ever, possessed by one person.
Business Implication: Hiring for these highly specialized skill sets requires greater sophistication in recruiting and matching talent with work but also higher levels of investment – both in terms of time and resources. This shift in working patterns means greater complexity for leaders that must now manage less fungible resources and coordinate efforts across a larger team to ensure efficient execution of tasks. Specialists that have acquired and continuously update their technical skill sets can ask for, and usually receive, higher levels of compensation. This shift increases labor costs and compresses margins for many businesses, highlighting the need for more flexible and agile compensation practices to direct dollars where they are needed most.
Challenge: The pace of change is accelerating and nowhere is this more evident than technology and the skills required to build, run and maintain modern technologies. To remain relevant workers must evolve, keeping their skills up to date, and the technology stack they choose to invest in is one of the most important considerations for any technologist seeking employment. Therefore, the work and experiences you offer a candidate has become a critical dimension in differentiating your value proposition from the competition, because the skills someone develops on the job will determine their market relevance and competitiveness for years to come. This trend is not restricted to technology companies, as digital tools and infrastructure are now pervasive in every industry. Nearly every business depends on some critical enterprise system for operations, or has technology embedded in a product or service offering. Hence, companies are increasingly pointing to learning agility as one of the most sought-after soft skills. Today, accountants, sales professionals, marketers, strategists, operations people, executives, etc. and virtually every employee on your payroll must develop new skills to keep pace with the changes in work.
Business Implication: Skills and experiences are simultaneously becoming more important and less relevant faster than ever before. You can hire expensive talent with specialized skills today and find those skills obsolete within a few years. This can quickly produce a workforce that is unprepared for the tasks you need them to accomplish. As your business strategy and market positioning change, so must your ability to upskill or retrain workers to align with changing needs. More than ever, employees must keep pace with the constant change in skill requirements, or the impact of their contributions will be quickly eroded.
Challenge: Almost every organization employs people across generations. Each generation has learned or developed different expectations around work experience, talent mobility, career paths and the many other aspects of what make up an employee experience. To pull on that thread, an interesting point of comparison is the difference we observe in expectations around career advancement. Baby Boomers and Gen X expect to climb the corporate ladder in a linear fashion, one step at time, taking years to reach the upper rungs. As newer generations build their capabilities, they expect to be rewarded with meaningful career advancement opportunities much sooner than their more experienced counterparts.
A recent survey from InsideOut Development indicated that 75% of Generation Z believe they should be up for promotion after working in their first position for only a year, while 32% believe they should be eligible within the first 6 months. This impatience for early career mobility is further amplified when they don’t have a good sense for their own contributions. This is a more common phenomenon as traditional performance management approaches have declined in popularity and manager capability to provide useful feedback remains a chronic issue. Further, looking within any generation and across the individuals that make up each cohort, they have different needs driven by life stage, personal circumstances, and preference.
Business Implication: To compete for top talent, organizations must now balance an employee’s insistence on more variety, greater mobility and rapid personal development with delivering on the stable and engaging experience that baby boomers want and need. Organizations are finding that a flexible yet compelling employee value proposition (EVP), that is attractive to each generation and can be tailored to meet different individual needs, is becoming a foundational element in attracting and retaining top talent. Luckily and maybe even a bit ironically, technology provides the means.
Is your organization struggling to attract and retain top talent? Let’s chat.