IT sector talent shortages hindering business performance with negative impacts on project delivery, service launches and finances

Company Updates

Author Alex Gerritsen

October 19, 2023

But existing industry talent is competent in technical and soft skills, while increased training investment could drive commercial success.

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19 October, 2023

Keller West, the specialist global IT search and recruitment consultancy, and part of The SR Group, today launches research which reveals that two-thirds (66%) of senior IT professionals have seen their businesses adversely affected by the shortage of IT talent. The lack of talent is negatively impacting business performance with consequences including:

Projects being delivered late (selected by 39% of IT leaders)
Being unable to launch new products and/or services (36%) or effectively serve priority business requests (31%)
Increased operating costs (30%)
Projects delivered over budget (24%)
Burnout of existing employees (24%)

Keller West and Eureka Box commissioned market research specialists, Sapio Research, to evaluate the talent landscape in Germany’s IT sector and to understand the real-world impact of demand for skills in a commercial environment where competitive edge is increasingly found in technological advance.

Training as a driver of performance, recruitment and retention

The Keller West study indicated that more training and professional development could help businesses to mitigate the impacts of talent shortages. Almost seven in ten senior IT leaders (69%) rate the quality of training available at their organisation as good or excellent. Even amid that context however, 60% of respondents believe that increased investment in the professional development of their department would significantly improve its ability to contribute to commercial success.

Alex Gerritsen, Partner and Head of DACH for Keller West, said:

“The quality of training and availability of support for ongoing professional development is becoming a vital tool in employee recruitment and retention. Employees at all levels are aware that it is essential to keep learning and develop new skills. Besides core training requirements, we’d advise businesses to let staff learn wherever their interests take them. Technology moves so quickly and it’s almost impossible to predict what skills might be needed by the business in 12 months’ time.”

Ineffective hiring processes

The senior IT leaders pointed to the difficulties in recruiting the right personnel for available roles — on average, just over half (55%) of new IT hires are successful (judged as possessing all the technical and soft skills required for the role). Which implies that almost half of hires are ineffective.

Mr. Gerritsen commented on the findings:

“With almost half of IT hires being judged as unsuccessful, this is just as likely to represent a failure in the hiring process as it is to be down to deficiencies in new recruits. Hiring organisations often lack in-depth knowledge about the job market in specific technical roles which causes common mistakes. For instance, organisations often put together a wish list of skills and attributes that it’s impossible to find in one candidate. Or the proposed salary fails to reflect the skills and experience needed — with businesses looking to acquire in-demand expertise on the cheap. Another common error is for the description of roles and responsibilities to be drafted by someone unfamiliar with the specific demands of a role, leading to a lack of alignment from the outset.”

He continued:

“The hiring process stands the best chance of success when internal talent acquisition works hand-in-hand with the hiring manager and external search consultants with deep understanding of the current skills and employment landscape.”

Measures to address the talent gap

As a result of the talent shortage, two-thirds of senior IT leaders (66%) have made changes to their hiring strategy. Of those who have evolved their strategy:

63% have either started to offer or increased the number of apprenticeships
51% have hired and cross-trained from other areas of the business
45% have started offering a visa or right-to-work scheme
While just over a third (37%) have removed the need for a related degree for new candidates

A sector of talented professionals

Despite the challenges presented by a lack of sufficient IT talent, IT leaders are nonetheless positive about the capabilities of current professionals in the sector.

The study asked senior IT professionals to rate new entrants to the workforce (those with less than two years’ experience) on a number of attributes. Responses highlighted high levels of confidence in their abilities and strengths:

70% of respondents viewed the soft skills as strong with 68% saying the same of their technical abilities
Two-thirds (66%) said the new generation of IT workers had a strong work ethic with the same proportion believing that the skills they had learnt in education were relevant for the demands of the workplace

IT leaders were even more complimentary about the skills and positive attitude of mid-level professionals (those with four to eight years’ experience):

81% of senior IT leaders said that mid-level professionals contribute to team performance in a meaningful way
79% stated that they actively pursue new certifications related to their work
78% that mid-level professionals are eager to stay at the forefront of the sector, and are happy to learn new skills and explore new technologies
Exactly three-quarters of respondents said that mid-level professionals embrace change and regularly attend industry events to stay at the forefront of the sector

The figures shed light on the high degree of commitment among mid-level practitioners to ongoing professional development.

And it was not just in the technical domain that the performance of mid-level professionals was highly regarded. Their command of soft skills was viewed as similarly proficient: 82% of senior IT leaders rated the problem solving skills and critical thinking of mid-level professionals as strong, with percentages of 74% for communication skills, and 73% for all of teamwork, creativity, and commercial acumen.

Mr Gerritsen added:

“There has been a lot of doom and gloom around the German economy through the course of 2023, and scepticism about the country’s ability to digitally transform. Contrary to this negativity, our research reveals a German IT sector far more confident about its strengths and abilities in meeting the demands of the future.”

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