We have been aware of the IT talent gap for years now. How come it is still an issue? Why haven't we been able to close the gap yet? Are we all not trying hard enough?
The above question was raised by someone in the audience during the Q&A session of a webinar held by the IT Association of Hungary (IVSZ) last week. The topic of the event was the IT talent gap market research they supervised in 2020 and its results.
Though the research focused on Hungary, we found that the results could be applicable in much of the EU, and challenges and solutions would stand globally with few exceptions – especially considering the growing globalisation of the tech talent market (and gap). And that the above question would definitely be valid anywhere in the world.
Obviously, everyone has some idea about why the gap is still growing, like the exponentially accelerating digitalisation of life and work in general must be one key reason. The preliminary results of the IVSZ research gave a good indication about some more surprising contributing trends, too, like the unlikely high occurrence of hiring for a degree in tech, too.
The discussion at the webinar, however, raised a whole list of reasons, giving a much more complete and complex picture of key factors. We found the list quite inspiring and relevant, and decided to dig deeper.
So, let’s see: why is the IT talent gap still growing, despite the fact that it has been there for us to tackle for years now?
1. Going digital beyond IT
Not only tech companies hire IT talent anymore, and not only IT positions are filled with tech people at those companies. Brand new digital roles are created in traditionally business departments and brand new digital departments are created within business units every day, requiring new, mixed skillsets. Like in the case of Digital Business Analysts, Digital Marketing Managers and Digital Sales Specialists – all new roles, created in the last few years.
The pressing need to fill these new tech-heavy positions and the shortage of perfect fits on the talent market sometimes even lead to the compromise of hiring a fully tech person for a business-side job, outside the IT department.
2. COVID-driven digitalisation
As we are all very well aware, the pandemic further accelerated rapid digital transformations. Work and life went online from one day to another, and suddenly long term ambitions about digitalising products and services, communication, processes and solutions turned into urgent priorities.
Forced digitalisation of the otherwise functioning business-as-usual operation also used up considerable resources and scarce relevant skills from previously planned strategic digital innovation projects, only adding to the existing resource needs. Digitalisation meaning not only software development, but also new types of implementation, maintenance, support and cyber security tasks.
3. Inflating prices
This is the most country-specific factor of all on the list. Inflation has been showing a definite growth in Hungary in the past few years, yet it has been steady on a global level and decreasing for example, in the US.
In those countries with a growing inflation, increasing prices raise salaries, too, making it more expensive and challenging to fill anyway high-priced roles, like most IT positions.
4. Growing funding
EU Cohesion Policy was aimed at contributing to “making Europe fit for the digital age”, in particular through the European Regional Development Fund (ERDF) – which also funded the research mentioned in the beginning. The objective was “enhancing access to, and use and quality of information and communication technologies”. The funds totalled around 20 billion Euros between 2014 and 2020, contributing to the creation of major innovation projects and thousands of tech jobs – some of them still waiting to be filled.
Further growth in digital financing was due to increased VC funding in 2020, in spite of previous expectations and a weakened economy, partly due to the pandemic.
5. Talent mobility
Digitalisation of work itself, accelerated by the pandemic, and EU policies all have been contributing to globalisation on the talent market. On one hand this brought companies and talents closer across borders, and opened up new opportunities for filling jobs regardless of location.
But on the other hand it also in resulted migrating local digital talent (at least virtually) to big European and global tech hubs, like the UK and the US, leaving other countries more in the beginning of digital journeys at an even greater disadvantage regarding access to in-demand tech skills.
6. Hiring for a degree
Another trend making tech jobs harder to fill is about favouring uni graduates when hiring for tech roles.
It is not only counter-productive as an extra filter in case of hard-to-fill positions, but also not a guarantee for higher quality, and a kind of discrimination towards a narrow, more fortunate and well-off segment in society, as we already discussed previously.
7. Low diversity
Speaking of discrimination, one of the biggest challenges in the tech talent market remains discrimination based on race, sex, and age.
The problem is only partly related to the positive bias toward university graduates, usually coming from privileged families. Tech careers in general are still considered masculine, and limited to super innovative roles, all requiring young energy and creativity.
While half the world and users of digital products are female, digital tools and processes are almost solely designed by men – and therefore inherently for men. And while majority of tech jobs are still repetitive, limited in scope and easy to pick up by anyone with basic logic skills, we still think about IT professionals like they each should be highly creative and innovation driving digital magicians – and therefore, young and dynamic.
Obviously, there have been important and successful initiatives aiming at narrowing the digital talent gap, like different tech education programs.
Also, we must not forget that although there is still a gap, we should not consider it as a shortage, but rather an opportunity – as one webinar panelist highlighted. An opportunity to grow up to the challenge of not only closing the gap, and fulfilling corporate ambitions of digitalisation, but also giving a chance to people choosing a new, future-proof tech career for themselves, at the same time.
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