For data scientists, Java developers and cloud computing experts, these are the best of times. For the companies looking to hire them? Not so much.

The skills shortage that has been a constant background thrum in information technology industries for decades is now reaching crisis levels, fueled by the digital transformation craze and declining college enrollments during COVID-19.

Harvey Nash Group Ltd. and KPMG LLP surveyed more than 4,000 information technology leaders and concluded that the IT skills crisis is the worst it has been since just before the Great Recession of 2008. Security certification consortium (ISC)² Inc. said the number of open cybersecurity positions just topped 4 million globally for the first time.

Meanwhile, the unemployment rate among U.S. technology professionals was just 2.4% in February compared with 6.6% for the population as a whole, CompTIA Inc. recently reported. And it expects demand for jobs in the field to grow at twice the rate of the overall workforce through 2030.

The shortfall is slowing IT projects at a time when most organizations, some spurred by the new demands of pandemic-induced remote work, are attempting to become more digitally savvy. Chief information officers who responded to a recent survey commissioned by ServiceNow Inc. cited a shortage of skills as their No. 1 impediment to digitizing workflows more aggressively.

The impact of the shortage is rippling into the development of still-emerging technologies as well. IT executives view the talent shortage as the biggest adoption barrier to 64% of new technologies such as nonfungible tokens, quantum machine learning and composable applications and networks, according to a new survey by Gartner Inc. released Sept. 13. That’s up from only 4% last year, and it far exceeds other barriers such as implementation costs and security risk.

But this crisis isn’t like the ones that came before it. COVID has introduced unprecedented new variables. Numerous recent studies have documented what is being called the “Great Resignation,” with Gallup Inc. reporting that 48% of working Americans are actively searching for jobs or watching for opportunities.

A recent study by Qualtrics International Inc. found that 52% of tech employees will look for a new job over the next year, with the need for better leadership topping the list of motivations — even ahead of higher salaries. Eighty-six percent of respondents to a recent Monster Worldwide Inc. poll said they feel their career has stalled during the pandemic. And the U.S. Bureau of Labor Statistics reported that 4 million people quit their jobs in July, the highest monthly total in 20 years.

Among the reasons for all the unrest: disconnection from peers and supervisors, new opportunities in remote work, a yearning for life fulfillment in the wake of the pandemic and a desire to relieve the stress of working an uninterrupted full-time schedule for more than a year.

Changes in attitude

“People are leaving because they feel disempowered by forces beyond their control, and choosing the right employer restores a sense of personal power,” said Shane Metcalf, co-founder and chief culture officer at 15Five Inc., a company that makes software for continuous performance management.

Employers, meanwhile, are more desperate than ever to hire. Interviewstreet Inc., a technology jobs site that does business under the name HackerRank, has seen “huge increases in demand from traditional industries like financial services, retail and automotive because COVID has accelerated their digital transformation agendas,” said Chief Executive Vivek Ravisankar. “It’s crazy the hiring spree they’re on.”

One new wrinkle in this latest crisis is that the current cohort of job-seekers seems to be more motivated by personal growth, work/life balance and cultural fit than in the past. “People are going beyond the paycheck to include the need for flexibility, career development and more understanding of what the company’s mission is about,” said Vishal Gupta, chief information and technology officer at Lexmark International. “We’re seeing both existing and new employees asking more about our mission.”

Remote work options that have been broadly embraced across industries have also factored into the equation. As many tech people have discovered that their jobs can be performed perfectly well without being in an office, interest in remote work has “jumped even above salary” as a criterion in their employment decisions, said Julie McPherson, executive vice president at Booz Allen Hamilton Inc. and leader of the firm’s digital solutions business.

Organizations are adapting. The Harvey Nash/KPMG survey found that 43% of IT leaders expect more than half their staff to remain working predominantly from home in the foreseeable future. The silver lining is that many say remote work has opened up new opportunities to hire people who would’ve been off-limits before.

A workplace transformed

In an effort to understand how technology leaders are adapting to the challenges of hiring and retaining technical employees, SiliconANGLE interviewed more than a dozen chief information officers, human resources professionals, recruiters and technology executives. We found that nearly all are now championing, or at least accepting, that remote work is here for the long term. They’re also investing substantial new resources in retraining initiatives and widening their hiring scope to include people with little or even no technology experience.

Sensing a growing need for potential employees to find more meaning in their jobs, technology leaders also say they’re endeavoring to be more transparent about their organizations, trying to foster greater workplace respect and diversity and spending more time in one-on-one meetings with their people.

The Great Resignation is real, they say, and although few would discuss turnover rates in their organizations, nearly all said they have seen a change in the candidates crossing their doorsteps.

During her seven years as chief talent officer at SAP SE and now as chief people officer at marketing automation startup Klaviyo Inc., Jenny Dearborn has looked across the table at hundreds of prospective employees. Applicants typically spent between two and five years at an employer before moving on, she said, but “we’re seeing people interviewing with us who have only been there three to four months.”

Asked why they are leaving so soon, many say they don’t fit in at their current employer or haven’t developed workplace relationships. “It’s more emotional as opposed to career trajectory,” Dearborn said.

Ed Jennings, CEO of low-code application development vendor QuickBase Inc., saw the same pattern. “People don’t leave for a few bucks,” he said. “They have to believe in what the company is doing.”

QuickBase, which employs 550 people, has responded by refining its mission statement — “unlocking the potential of people to innovate” — and stepping up the pace of top-down communication. There’s a weekly video update from company leaders, a virtual “town hall” meeting every month and messaging that stresses diversity, inclusion and promoting from within.

“It was probably three-quarters of my time for the first several months,” Jennings said. “But I can talk a lot more to people than I used to when I was getting on planes all the time.”

The message appears to be getting through: A full 79% of the employees who responded to a recent survey said they feel safe calling out issues with management, compared with 66% before the pandemic.

Hybrid mandate

The success with which office workers pivoted to home offices in 2020 has prompted many technology leaders to rethink their attitude toward hybrid work arrangements. Tyler Lessard, chief video strategist at business video platform Buildscale Inc., which does business as Vidyard, was an admitted skeptic about remote work arrangements until last year.

Not only has he hired some of his best people remotely during the pandemic, but the company has gone further to adopt a remote-first culture, Lessard said in a video statement. “Committing to remote-first instead of saying we’re headquarters-first and permit remote work ensures that all of your teams are motivated to hire the best people no matter where they happen to be,” he said. “It opens up your talent pool significantly.”

The culture at 107-year-old Booz Allen “was always that people had to be colocated and have the Booz Allen secret sauce injected into them,” McPherson said. “We proved to ourselves we’re super-successful at working remotely. Our attitude has certainly changed.”

Lexmark already had a flexible work culture before 2020, Gupta said, but “we’ve had to become even more flexible,” For instance, in data science, an area where talent can be hard to come by, fully remote employment has become more common.

Gupta said that about 75% of the data scientists his team has hired in the past year aren’t located near the company’s headquarters in Lexington, Kentucky. “That talent is so critical,” he said. “In the past this would not have happened.”

Others reported that widening their hiring aperture has helped ease the skills crunch. “It has opened us up to reaching traditionally unrepresented talent who live in areas outside of our office footprint,” said Hallory Haley, director of technology talent acquisition at Liberty Mutual Insurance Co. “We’ve been able to source, interview and onboard talent virtually with strong satisfaction ratings from candidates, new hires and teams.”

But hybrid work environments have also had some unanticipated ripple effects. One is that people in areas where living costs are low can now compete for good-paying jobs in big cities. Although that might appear at first glance to bring average wages down, the result has been the opposite. High-cost markets are basically setting the standard for everyone else.

“Inevitably you’re chasing some of the same talent and are paying big-city wages in a mid-tier market,” said Eric Olmo, senior vice president of people and spaces at BMC Software Inc. “Eventually, the cumulative effect will be to raise wages across the board.”

As HackerRank’s Ravisankar put it, “People used to benchmark pay rates with the Bay Area being 1.0 and Florida at 0.7. Everything is now a 1.0.”

Ravisankar also sees remote work changing the hiring process. When pairing up developers with prospective employers, his company recommends that hiring managers use a pre-populated set of questions that screen out bias against offsite candidates.

Interviews also incorporate a shared integrated development environment where candidates can show off their code as it compiles and runs rather than scrawling snippets on a whiteboard. “It’s way more collaborative and developer-friendly, he said. “This is totally changing the way hiring is done.”

Talent and ambition

With the skills gap showing no signs of closing, companies are getting creative about whom they hire and where. Many are ditching the traditional emphasis on skills and experience in favor of talent and ambition.

IBM Corp.’s New Collar initiative was a trailblazer in this area. It’s aimed at hiring candidates based on attitude and aptitude rather than credentials and employment history. IBM said 15% of the people it hires each year don’t have a bachelor’s degree or come from a traditional IT background.

Likewise, Amazon.com Inc. recently said it has committed $700 million to “upskill” more than 100,000 of its employees with new professional skills by 2025. Its Amazon Technical Academy aims to turn nontechnical people into software developers in just nine months.

Hiring managers have received the message. “I look for problem-solving versus language-specific skills,” said Haluk Saker, a Booz Allen senior vice president, echoing the opinion of many executives who were interviewed. “My technology stack tomorrow is going to change. I want a learner more than an expert.”

Matt Mehlbrech, vice president of IT at CoorsTek Inc., a maker of technical ceramics, agreed. “I hire first based on attitude, then aptitude and I can get them the experience,” he said.

Diversified software developer Zoho Corp.’s Zoho Schools is free program that to brings prospective employees into the company right out of high school. More than 10% of the company’s professionals are graduates, according to Chief Strategy Officer Vijay Sundaram.

Klaviyo recently completed a successful pilot of “Development Lab,” which provides prospective employees who are short on some technical skills with a two-month intensive training course. The company intentionally chose people from historically disadvantaged backgrounds for its first 10 openings and offered jobs to seven of them. “It tested our hypothesis that more people are capable of doing the work if they’re given more support and training before day zero,” Dearborn said.

Lexmark partnered with North Carolina State University to enroll 18 hand-picked employees in a data science and analytics certificate program for several hours a day after work. Finding people willing to put in that kind of time wasn’t a problem because “they’re investing in themselves,” Gupta said.

“I tell them I can’t give them job security, but I can give them career security,” he said. Gupta expects 80% of the future talent needs for his organization — which comprises global information technology, software development, data science and corporate strategy — will come from retraining and upskilling programs.

Toyota Financial Services launched its “Digital Academy” two years ago and has watched it rapidly grow from one to nine separate institutes covering such disciplines as agility, analytics, financial technology, innovation and risk. The program is open to all employees and consultants.

“Each cohort gets trained together to not only build better learning but also collaboration and camaraderie,” said CIO Vipin Gupta. “That has created a continuous cycle of ‘learn, do, teach, do and learn.’” The academy has hosted thousands of sessions and, because of COVID, shifted to a digital model that’s also available outside the U.S.

Adobe Systems Inc. offers scholarships to its own Digital Academy for people switching careers from nontechnology fields. Students can learn user interface design, web development and data science skills through a partnership with technology training firm General Assembly Space Inc. and can apply for apprenticeships after a three-month program.

Shifting skills

Changing skills needs are also prompting technology leaders to look outside traditional talent pools, both in skills and locations. The San Antonio office at cybersecurity firm Arctic Wolf Networks Inc. team is comprised of 90% veterans and military spouses. CEO Nick Schneider likes hiring former soldiers and athletes because “they’ve played on a team and have a common background,” he said.

Booz Allen’s Saker, whose background is in software development, recalled that early in his career the challenge was “how to make the 1s and 0s work.” Thanks to cloud computing, developer productivity tools and an increasingly empowered user base, he said, “user experience is now very important. Some of my top designers are music or art grads.”

Liberty Mutual’s TechStart is a one-year rotational program that gives participants broad exposure to the insurer’s technology organization along with skills development. Staffers who complete the program are integrated into teams that align to both personal and career interests.

“We hire about 120 TechStarters annually and have seen positive trends in both retention and performance,” Haley said. “Our hires who initially start as TechStart interns have a higher retention rate, reach a manager role faster and tend to have higher performance ratings.”

In another initiative, Liberty Mutual three years ago launched the Data Engineer Academy with a pilot cohort of 16 students enrolled. The hybrid program allows them to learn on their own time and requires only about 10 hours per week. Managers are encouraged to find “protected learning time” for study and also lead some classroom sessions throughout the seven-month term.

The nearly 50 people who have completed have moved into roles in cloud-based software development, integration and application programming interface development, testing, user experience, security and data engineering, among other disciplines, Haley said.

Augury Inc., a maker of software that monitors industrial machinery, is investing heavily in training and mobility programs to turn mechanical engineers into software developers and data scientists. “About 15% to 20% of the jobs we’ve filled are through lateral mobility,” said Keren Rubin, vice president of people operations and a former food engineer. “I’m a huge fan of lateral mobility.”

There is room for improvement at many companies. Pluralsight LLC’s 2021 State of Upskilling report found that 88% of employees said they were satisfied with their organization’s skills development programs, compared with just 56% of individual contributors who expressed the same confidence.

Keep what you’ve got

Hiring and retraining are only part of the picture, of course. With half of the workforce reportedly eyeing the exits and Gallup reporting that 74% of employees say they are “actively disengaged” from their work, technology organizations are also stepping up their retention efforts by boosting internal promotions and cultivating an employee-centric culture.

“Companies have to be people-first by default to attract pretty much all good talent,” said Irene van der Werf, people manager at Omnipresent Group Ltd., a London-based startup that makes human resources software.

“The experience is what a candidate sees and initially bites into and the actual experience either keeps them or it doesn’t,” said Eric Hutto, president and chief operating officer of Unisys Corp. “Employers need to ask themselves what is in their arsenal to operate the company so that it is not transactional but an experience.”

That starts with laying out a growth path, something employers say they’re stressing more strongly in the hiring process. “We’ve always had a focus on looking internally and that’s accelerated, both due to the situation and the size and scale that we’re at,” said Arctic Wolf’s Schneider. The company’s research and development operation has even hired from the ranks of its sales force, he said.

At QuickBase, said CEO Jennings, “being explicit about promoting from within is a huge draw, but it creates a responsibility on us because the No. 1 reason people leave a company is that they’re not growing or learning from their manager.” For that reason, he said, “we spent a ton of time in leadership development because if people are going to be successful in leading teams they have to be coaches, strong managers and leaders.”

At NTT Data Services Corp. weekly “ask me anything” forums with senior executives have been “the most sure-fire way to increase engagement,” said Kim Curley, vice president of workforce readiness consulting. “That means communicating more broadly, potentially earlier than some leaders are used to, and certainly more transparently than many are accustomed to.”

“Transparency” was a thread that ran through discussions with many technology executives. Because employees can become disenfranchised when they don’t understand how they contribute to the organization, leaders have been bending over backward to tell them.

“We spend a lot of time during our monthly all-hands and small-group meetings talking about business conditions and how we fit into that,” said CoorsTek’s Mehlbrech.

A collateral benefit of creating an inclusive culture is candidate referrals. Augury expects to triple its workforce to 300 people this year, with referrals accounting for half of all new hires, Rubin said. “The main reason we get so many referrals is that we talk a lot about being a great company to be a part of,” she said. “Stock options are not as great an enticement as you might think.”

The late-COVID skills crunch has brought out some executives’ softer sides. Citrix Systems Inc. has been on a campaign to use automation to reduce workloads. In the process of implementing more than 80 small applications, “we were able to give back over 6,500 hours per month,” said Bagirathi Narayanan, vice president for digital workplace at the virtualization firm. “We’ve been using our technology to simplify work and then using that to attract people.”

Workforce diversity resonates with young employees in particular. PagerDuty Inc., a digital operations management platform, opened an Atlanta office nearly three years ago “because of its diverse talent pool and city initiatives that align with its cultural values,” said Chief People Officer Joe Militello.

PagerDuty issues internal reports on its workforce diversity and pay equity status. When the company went public two years ago, it set aside 1% of its equity for nonprofits. Its board and leadership team and nearly 50% female and nearly 40% of employees are nonwhite.

In a market where the barriers to job switching are low, Militello said, “it’s a competitive differentiator to us.” Proof that the message resonates, he added, is evident in the fact that 93% of employees participate in volunteering and giving programs.

Other technology leaders stress the nature of the work itself as a motivator. CoorsTek has had “a steady stream of new things to work on,” including robotic process automation, machine learning, smart industrial devices and shop floor automation. “I think that’s excited the organization,” Mehlbrech said, pointing to his department’s 3% attrition rate as evidence.

Toyota Financial Services has adopted agile, scrum and lean manufacturing tactics to restructure software development and operations along the lines of what it calls “digital factories,” said CIO Gupta. It’s also finding ways to apply the kaizen principles of continuous improvement that Toyota made famous in its factories to the IT organization and is diversifying its business to provide its financial services platform for other automakers for the first time.

“We are at the forefront of reshaping the industry,” Gupta said. “Our turnover rate has been very, very low.”

The talent shortage shows no signs of easing anytime soon. The silver lining is that the drive to find and keep people has prompted organizations to make changes that should serve them well for a long time to come.

Photo: Flickr CC