Editorial
What can sometimes seem perverse in the ongoing war for tech talent is that there are plenty of unemployed tech people out there. Right now, across the U.S., tech workers in engineering, digital, analytics and operational IT roles are highly sought after as companies accelerate their digital transformation efforts.
The challenge lies in their reluctance to join your organization. As a recent deep dive into the tech unemployment issue at WIRED shows, despite the fact that the “Big Tech” companies have laid off more than 400,000 people in the past two years and “finding a job in tech is a mess,” there is still demand for tech workers outside of the traditional technology industry. Yet, the shortfall in applicants means they can't provide the support these industries need.
While the US Department of Veterans Affairs may assert that “Silicon Valley isn’t the only place for tech innovation,” the challenge remains evident. Without being able to staff these positions, the journey towards innovation cannot begin. This holds true for the majority of organizations, even those whose primary business isn’t creating computer software or digital applications. They want to embed computer software or digital applications into their core operations. This transformation, as described by McKinsey, involves the rewiring of an organization with the goal of creating value by continuously deploying tech at scale.
If the job market remains as competitive as it is, especially for technology skills, you cannot solely rely on external recruitment. Instead, internal mobility becomes increasingly important. Given the tremendous rate of transformation in most companies, CHROs should think of effective ways to move people to new roles as quickly as possible as new digital transformation opportunities arise.
Why Incur Time Delays And External Hiring Costs?
We have actually forgotten a recent valuable business lesson: at the peak of the pandemic, internal recruitment was the norm, as restricted market conditions forced employers to think laterally. Internal hiring rates rose sharply, spiking in 2020 at 40% of all hires, but seems to have slumped back, with our data showing it has now dropped to only 24% of all hires (it’s usually around 30-32%). In the face of reluctance from that former Meta or Google developer about joining your team, it’s time to think again.
Plus, sourcing external tech talent externally is time-consuming and expensive. There’s also considerable potential for direct savings via reduced hire cycle time. In June our team published time-to-hire trends information that shows it now takes an average of 44 days to appoint people, rising by a full day in Q1 2023.
Considering the higher expenses associated with job posting and onboarding, exploring an internal solution to address your tech talent shortage makes a lot of sense. We found that for technical roles, developing internal hires are often two to three times less expensive than hiring externally. But what should HR prioritize as the next best course of action, especially in terms of retaining valuable new digital skills?
Best practices surrounding internal mobility include the following:
- Going beyond the talent scarcity headline: Tracking hiring times year over year and taking note of trends can help organizations optimize recruitment efforts for key roles in their industry. Use them to establish the answers to key tech skills questions such as, ”where is it better to invest in an external pipeline? “Which roles are easier to find and develop from within our internal talent pool?”
- Get to know what skills you have: Aim for a comprehensive understanding into the real tech skills landscape within your organization and use new real-time skills profiling to better align internal people with skills to where they can have a significant impact.
- Embrace potential: Avoid an excessive focus on resumes and prior experience — instead, be receptive to seeing adjacency and proximity and potential. Numerous organizations find training can turn staff in very different occupations into proficient digital workers, or at least competent enough for current needs. Trust the strivers.
- Convey a “We Want You to Succeed” culture: Organizations that have mastered this approach are those that are abandoning traditional career hierarchies in favor of skills-based career paths. They are making investments in training and coaching to nurture and develop their internal talent instead of continually seeking out high-performers from external sources.
- Create and sustain amazing internal mobility experiences: Securing a new position within the organization should be an equally smooth and exhilarating experience, whether you're already a part of the team or not. Leverage a talent marketplace and encourage managerial openness to always looking at our own people first instead of firing up the automated application screening processes.
Now is the time to get good at finding your talent solutions near at hand and not in an expensive, hyper-competitive job market.
Your budget — and your overall efficiency — will thank you.
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