We all certainly know that business and government leaders have been challenged by a digital skills shortage for years. The scarcity of tech talent has been caused, in part, by the rapid business changes of the Fourth Industrial Revolution, the effects of COVID-19 and the Great Resignation that followed. Now, with the added threat of economic recession, the digital skills gap has only gotten harder to fill. The 2022 Digital Leadership report published by Nash found almost 70 percent of digital leaders globally felt they couldn’t keep up with tech trends due to a lack of skilled labor.
During this Fourth Industrial Revolution, more and more companies have gone from just talking about the need to transform to primarily digital processes and practices to beginning their journey. Unfortunately, many are finding they have not yet created, hired and grown the technical talent they need. These digital transformation challenges were also accelerated by COVID-19 with companies having to learn to sell, serve customers and run their business remotely. And of course, the pandemic also caused many people to reassess their work/life balance and professional priorities.
While it is tempting in a recession for businesses to lock down and focus only on reducing costs to survive, the companies who also keep an eye on where they want to be when the economy recovers will be positioned best to outpace the competition. This requires a process that includes analyzing current and future workforce needs, widening the talent pools you’re exploring and investing in workforce skilling that will address current and future goals.
Understanding and prioritizing your tech talents needs is the essential first step
When budgets are being scrutinized more cautiously, it’s important for businesses to identify what roles and competencies they need to fill today’s gaps and achieve future objectives. As mentioned above, this has already been challenging. One 2022 McKinsey study showed that 87 percent of senior executives say their companies are not adequately prepared to address the digital skills gap.
Many companies know that the roles they have now and those they will soon need require skills that they don’t have, yet they don’t have a plan to access people with those skills. The first thing leaders can do is identify needed job roles. For example, to protect yourself from cyberattacks, you know you need cyber-skilled people in the company, and you should consider what specific roles and how many you’re going to need now and in the future.
Likewise, if you’re moving more of your business to the cloud, you’re going to need a different set of roles such as cloud architect, designer and support. After identifying roles, you can list the needed competencies for each. Beyond simple job descriptions that identify responsibilities, you can fully document the abilities and characteristics of an effective security coder or great cloud architect, for example. This can include necessary technical skills in areas such as cloud computing, AI, data or cybersecurity, as well as power skills including creativity, critical thinking, complex problem solving and change management. Finally, you can assess which of these roles and competencies you have in the company today and where there are gaps to fill.
Exploring wider and deeper talent pools
Many organizations are already looking beyond their own teams to support their transition to predominantly digital business practices. The ever-more pressing need to innovate is accelerating these transformations.
Facing a growing digital skills gap, leaders in both government and private enterprises are increasingly looking at outsourcing to efficiently address their critical needs. They typically look in locations that offer the right combination of geography, availability of the digital skills that are needed and an attractive business environment.
Unfortunately, traditional outsourcing markets are saturated and competition is fierce. As markets have matured, it has become far more expensive and challenging to find talent in many of the IT outsourcing destinations of previous decades. This has led companies around the world to look more widely for new opportunities in regions that can balance costs with the high-quality tech talent they need to serve their customers.
Africa is one such opportunity. With more than 2 million annual degree holders, so many people in Africa today are highly skilled and seeking employment. While many nations are experiencing decreasing birth rates, Africa’s population is set to nearly double in the next 30 years. In Nigeria, the largest country on the continent, 70 percent of the current population is below age 30. Africa has already become a major IT outsourcing hub, with countries such as Nigeria and Rwanda offering the necessary combination of demographics, infrastructure and needed skills to become a key location in the new outsourcing world.
Now is the time to invest in your current and future workforce
It takes more than the typical weeklong workshop to learn the complex, highly technical skills companies need. This is one case where the recession may help. Perhaps when not setting up new locations and booking travel as much, these budget line items can be redirected toward skilling people for the future. Companies may find it easier to invest time and money during a downturn.
This digital upskilling, reskilling or cross-skilling is vital for employees who want to futureproof their careers and employers who want to retain top talent. Research shows people stay with companies longer when they feel they are being invested in, when they are growing and when they see growth potential.
The statistics around the current and future skills gap challenge are staggering. The Bureau of Labor Statistics says the U.S. software engineer shortage will reach 1.2 million by 2026. In terms of cybersecurity alone, there are more than 600,000 jobs open currently, and Cybersecurity Ventures recently predicted that by 2025 there will be 3.5 million cybersecurity jobs open worldwide. This is unsustainable. Many companies don’t just fail to move towards a real solution, they actively create unnecessary barriers to filling technical roles. Today, many companies require technical degrees and several years of experience before they will hire because they do not have the time to invest in skilling their workforce.
With the supply of qualified talent running so low, relying on the old strategy of only hiring highly trained staff who already have all the qualifications you need is far too limiting. The smartest companies are looking for alternative solutions for sourcing tech talent. Trying to stay ahead of the global tech talent shortage, they are choosing to skill people with less technical experience but an eagerness to learn and grow their technical careers. This vastly expands the size of potential talent pools for both current and future roles their businesses need to fill.
Seeing beyond the current economic and talent sourcing challenges
There is no doubt an economic downturn only adds to existing digital skills gap challenges, but a recession can also be a prime time for employees to look to make horizontal moves and learn new skills. This may be an ideal time to rethink your current workforce strategy and more effectively skill your people.
Recessions often prevent employers from thinking long term because they’re completely focused on ensuring they can weather a tough economic market. Ironically, using this time to figure out what digital skills will be necessary for your organization in the future and investing necessary resources in skilling to provide the needed competencies is exactly what can ensure you are better prepared for future economic downturns.
