As most CIOs know today, finding, hiring, and retaining top IT talent is hard. This is not a new problem. There are typically hundreds of thousands of open IT positions in any given year. While these numbers are not much affected by economic downturns, when times are good, it gets harder for employers to find the help they need.
According to the US Bureau of Labor Statistics (BLS), the number of IT jobs is projected to increase by 15% from 2021 to 2031 in the United States alone. In that time period, the BLS anticipates 682,000 net-new IT-related jobs being created. This growth outpaces any other occupation. Moreover, the BLS projects an additional 418,500 jobs to come from growth and replacement needs each year.
With US unemployment at record lows, times are definitely good—for IT workers. This buyer’s market raises a number of issues for companies looking to implement the technologies they need to further their digital transformation and innovation strategies. One such issue is cost. High demand and low unemployment make it very difficult to find people with deep, in-demand technical skills—such as software programmers and IT administrators. When they can be hired, they are very expensive. According to the BLS, the median annual wage in computer/IT occupations was $97,430 in May of 2021—double the median annual wage for all occupations.
Another issue is attrition. IT people are constantly being recruited away from their current positions. According to a recent "best practice report" from Forrester, 2022 set a record, with an average attrition rate of 23% for IT jobs.
“Put simply, there aren’t enough technology professionals to fill all the open technology roles,” reads the report. “Some 52% of tech companies are planning on adding new roles . . . Unfortunately, the pipeline of new tech talent entering the marketplace from academia hasn’t kept up with the rate of role growth.”
The work-from-anywhere trend brought on by the COVID-19 pandemic has exacerbated the poaching problem by allowing companies from anywhere in the world to lure employees away with better pay benefits and more flexible working conditions.
A Skills-Based Approach May Be the Answer
While there is very little companies can do to create more cybersecurity experts, Python programmers, IT administrators, data scientists, or people with any of the other in-demand skills they need, what they can do is adopt a skills-based approach to hiring, according to the Forrester report. (Indeed, the report is titled "A Skills-Based Talent Strategy Is Central to an Adaptive Organization.")
“When you look at a skills-based organization, you're trying to look at the totality of the person's skills and experiences,” said Fiona Mark, a Forrester principal analyst and one of the report’s co-authors. “You're trying to think about . . . matching them to the opportunity rather than fitting them within a stricter role. It's a more adaptive organization.”
Most companies today still take a roles-based approach to hiring that only looks at a candidates’ qualifications directly related to the role they are trying to fill. They do not look broadly across a candidate's collective experience to see if those skills could be adapted to the company’s needs. Conversely, for example, by taking a skills-based approach, one of Forrester's clients discovered that financial-auditing skills transferred well to cybersecurity work.
How to Adopt a Skills-Based Approach to Hiring
To adopt a skills-based approach to hiring, companies can start by revamping how they write job descriptions in the first place, said Mark. Instead of describing a role, hiring managers and recruiters need to think in terms of the work that needs to be done. Only then can you ask what capabilities and skills are needed to complete the work.
“By thinking of your organization as a set of capabilities delivered by people with skills, rather than as a collection of roles, you can meet today’s demands more accurately and evolve to meet future needs,” reads the report.
This approach short-circuits the cycle of using years-old job descriptions that may be out of date to screen current candidates. Rewriting job descriptions greatly expands the skills and qualifications that could be useful to complete the work, said Mark.
For example, if someone has a strong product-management and data-analysis background in another industry such as finance or healthcare, this experience could be adapted—provided the candidate has a technical mindset—to product-manage software.
“It’s less about getting rid of roles [and] more [about] thinking about 'How do I manage the work that's done in the organization?'” said Mark. “You are starting to see this in some organizations. I was looking at some job descriptions where, instead of saying what your requirements are, they start with what you will do.”
Starting with the work versus the job or needed experience attracts a much broader range of candidates who may have otherwise thought themselves unqualified.
Focusing on skills can also ease tech’s diversity problem. For the past 60 years, white males dominated the tech industry. Because of this history, many job descriptions in tech are unwittingly skewed to attract those types of applicants. This built-in bias screens out qualified people of color and women. A great example of this is Amazon's use of artificial intelligence (AI) to review resumes. Because the AI model was trained on 10 years' worth of resumes that were mostly submitted by men, it preferred male over female candidates in their descriptions of their experience. Amazon ultimately scrapped the AI tool.
Another benefit of taking a skills-based approach, according to report, is that it allows you to move from a paper-based process to one that uses demand planning to understand things such as whether to recruit internally, recruit externally, or use partners to fill the need.
It's All About Data
A skills-based approach is very data-centric, said Mark. While it is challenging to put together skills profiles of all employees, it can be done. To get the data you need, work with your head of HR to determine what data you already have, do skills-gap analyses, and run talent-marketplace programs.
While it can be challenging to locate insofar as it is typically scattered throughout a given organization, a lot of relevant data is already available from a variety of internal data sources—including but not limited to:
- Learning management platforms (LMPs), which manage and track employee certifications, coursework, and training)
- Resumes, CVs, and career histories
- Performance reviews
- Skills assessments
- Data from internal interviews
Once you have a handle on the talent that is available, the next step is to look at demand to see what the needs are—and then to match those needs to the available skills. Companies such as Procter & Gamble, Publicis Groupe, and Schneider Electric use opportunity marketplaces to match employees with internal opportunities and their organizations.
“We’re not very good at predicting what we're going to be doing in 18 months anymore,” said Mark. “The whole premise of the skills-based organization is you can move people around to address new and emerging needs.”
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