Global and U.S. Talent Shortage Report - Statistics & Studies

IT industry trends are seeing the demand for tech talent continuing to rise, while the talent pool numbers are far from keeping pace. The reasons range from a slowdown in birth rates to workers shifting their perspective on what matters to them and leaving their jobs. Regarding demography, Japan and many European nations have had lower than typical birthrates for decades. In the United States, Baby Boomers make up about 25% of the workforce and are expected to be aged out by 2030. As they continue to move out and retire, they leave behind high-skilled jobs that younger generations haven’t yet had the time or training to take over.

According to consulting firm RSM, many middle market companies attribute their hiring challenges to pandemic after-effects, compensation demands, the need for specialized skills, inflation, competition, remote work, and employee career reassessment. The Great Resignation, which was partly the result of many workers rethinking what they wanted in life and at work, resulted in 47 million in the United States voluntarily quitting their jobs in 2021, and the record-breaking numbers in voluntary quitting continue to mount. In 2022, more than 50 million workers voluntarily left their jobs, breaking the 2021 record.

Thanks to the Great Resignation, a term coined in 2021 for this ongoing trend, the United States has an unprecedented talent shortage.

Research from Fourth shows that 87% of U.S. retailers indicate talent shortages as a major challenge for 2023. Korn Ferry’s research also suggests that unless the U.S. finds more high-tech workers, it could lose out on $162 billion due to a shortage of tech talent alone. Manpower reports that the talent shortage in the U.S. falls at 74%, just below the global average of 75%, and companies with 250 or more employees are struggling the most to recruit and retain talent.

Since most talent shortages fall under the technology and IT umbrella, a lack of tech skills is one of the biggest challenges. Globally, according to Manpower, there is a 76% talent shortage in the IT and technology sector.

Gartner research showed that IT executives indicated that a lack of tech skills in 2021 was a barrier to 64% of emerging technologies, compared to only 4% in 2020. Ninety-seven percent of IT departments in middle-market companies indicated that hiring was somewhat, very, or extremely challenging over the past 12 months. Computer Weekly also reports that Hays's research shows 95% of employers seeking tech talent in 2022 encountered a tech skills shortage, and Nash Squared’s research shows nearly 70% of businesses are being held back due to a lack of tech skills.

IT and data skills rank as the top in-demand skill globally. Skills necessary to support emerging technologies and the digital transformation market — including machine learning (ML), artificial intelligence (AI), and enterprise software skills — are in short supply globally and in the United States. Additionally, general IT, security, engineering, and data expertise are all in short supply. These are just a few skills in demand but face a slim candidate pool.

PEW research showed that most workers who quit their jobs in 2021 did so due to low pay, lack of opportunities for advancement, feelings of disrespect at work, childcare issues, not enough flexibility, and poor benefits.

Also, post-COVID, people are rethinking what’s important to them. They aren’t afraid to leave their jobs if what they’re offered doesn’t align with what they want or their sense of purpose. After COVID, nearly two-thirds of U.S. employees are reflecting on their purpose in life, and around 70 percent think work defines their sense of purpose.

Organizations are doing their best to act and overcome the recruiting and retention challenges. Here are three considerations that many companies are adopting.

1. Focus on Employee Needs

Employees are no longer afraid to ask for what they want; if they don’t receive it, they often choose to walk away from their jobs. Work-life balance, flexible working arrangements, paid time off, benefits, and fair compensation help retain employees and keep them happy and healthy.

2. Upskill and Reskill

Upskilling and reskilling employees not only helps fill in talent gaps but also helps with retention. As noted by the Society of Human Resource Management, career development and training opportunities fall among the top factors employees seek from their employers. According to the University of Phoenix’s Annual Career Optimism Index 2022, 65% of workers said they’d stick around if their employer reskilled them, and 68% of workers would remain with their current employer for their entire career if they could count on being upskilled.

3. Work with Staffing Firms

Working with a staffing agency helps businesses fill positions through strategic alliances. IT staffing agencies have connections with active and passive candidates they can contact on a company’s behalf.

At Advantis Global, we work with an extensive range of companies, from Fortune 50s to start-ups, seeking to place permanent and contract skilled tech talent. Our goal is to support candidates in landing their next job, which, for many of our candidates, results in a higher-paying position. We also support candidates with interview coaching to ensure you feel confident when you walk in the door for your interview.

Submit your resume or apply for a job on our website to get connected with a recruiter today.