Navigating the technology skills shortage

Robert Beckley, Regional Director, Hays ANZ

In our latest Hays Salary Guide: IT Edition, it was revealed that the current skills shortage is much more prevalent in the technology industry, with 98% of IT employers experiencing a skills shortage compared to employers across all industries at 91%.

There has been salary increases across the board, especially in the technology sector, and employers want to increase permanent headcounts – but top talent is in short supply. This means technology employers are finding it difficult to keep their growth trajectory on target for the year ahead with such a narrow talent pool.

So how do you attract the top tech talent in a market that’s short on tech candidates?

This requires tech companies to think beyond just the dollars for the hours worked. While a competitive salary offering is important for a company, tech job seekers are looking for more. Our research showed that ongoing learning and development, an alignment in values and purpose and benefits that work for an employee’s individual circumstances are all important considerations in the recruitment process.

Below, we consider some of the key findings for the tech industry, and how your organisation can stand out to top tech talent in this skills-short market to ensure long-term success.

Navigating the current tech landscape

Temporary and contractor employees increasing

There is a higher intention to use temporary or contract technology staff in FY22/23, with 44% of employers saying they will increase their use. This is much higher than the average for top talent in other industries, which is 37%.

This finding is mirrored by employees with 59% of tech professionals already considering a contracting career which, again, is higher than the overall average of 44%.

Implement learning into your organisation

While contract workers are an effective solution for short-term staff shortages, it is important to consider long-term strategies to build resilience in the workforce. Upskilling and creating a culture of continuous learning can help fill some skill gaps but considering the short shelf-life of some skills today, especially within the technology sector, a learning program comprised of soft and technical skills that is always on will assist in building a workforce that will be able to keep up with business needs and opportunities. 

We explore this topic more in our article: How to implement a successful learning strategy, but at the core of any learning and development strategy is investing in your tech talent. Not only will this help ensure the continuous uplift in capability internally by improving technical skills and more, it can also play a core pillar in your retention strategy and recruitment process towards your top tech talent – our research demonstrated that the number one benefit employees are looking for in a new role is ongoing learning and development.

Key to a successful learning and development framework for tech companies is not just technical and soft skills, or short- and long-term learning, or formal or informal qualifications, most importantly perhaps is the creation of a culture that allows for new skills to be practiced, and at times failed at, to embed the learning long term.

Look beyond increasing salaries

Tech talent are slightly below the overall when it comes to potentially receiving a pay rise this financial year, with 87% set to receive a pay rise compared to 88% overall. However, for those expecting to receive a pay rise, we found that 18% of tech employers will be increasing salaries by more than 6%. This puts tech companies on the more generous end of the scale, with only 10% of overall employers considering offering more than 6%.

This percentage, even though higher than the overall result, still comes nowhere near the percentage of tech talent saying their individual performance, and demand for their skills in today’s market, deserves an increase of more than 6%. In fact, 58% are expecting more than 6%, and 73% of tech professionals say the skills shortage has made them more confident to ask for a pay rise.

A hiring company will need to find the balance between salary offers, and the full suite of the value exchange on offer when considering attraction strategies.

Mastering change in your organisation

Change is happening at a faster pace than ever before, and this will affect not only your operational strategies, but your workforce shaping capabilities as well. The technology sector is ahead of the pack in undertaking workplace transformations with 39% of tech employers saying they have undertaken a transformation in the past year to take advantage of economic opportunities, as compared to the overall figure of 35%.

High turnover, and how you should view your employees

Staff turnover in the tech industry is well and truly in full effect. In the past year, technology staff turnover increased for 66% of employers, higher than the average turnover rise across all departments of 57%. With high turnover expected for tech talent, retention should be a strategic imperative for your company in this sector.

With the current skills shortages, rising salary expectations and high turnover combined, technology talent now have more say in who they work for than ever before. Businesses looking at recruiting candidates in the tech area will need to pay close attention to their employee value propositions (EVP).

Employees are now one of your VIP customers, and therefore, organisational culture, performance recognition, career progression pathways, purpose alignment and learning and development opportunities are all factors that need to be examined to create an effective EVP for your company. Immediate pressure is driving short-term outlooks to solve for the current skills shortages in the technology industry, but for long term business performance, organisations need to think long term on their human capital strategies and ensure consistent attraction and retention of top technology talent.

Download our Hays Salary Guide: IT Edition

Our Hays Salary Guide: IT Edition is the culmination of insights gathered from more than 4,400 organisations and 4,800 skilled professionals surveyed across Australia and New Zealand. Download your copy to access typical salaries and insights for hundreds of technology job titles.

About this author

Robert Beckley is a Regional Director based in Melbourne. Having worked in the Australian IT recruitment market since 2006, Robert leads the Hays Information Technology business in the ANZ region. Robert has a Master’s degree from the University of Birmingham, and two decades of industry experience.