Nowadays, the tech talent shortage is a chronic challenge to the world. As demand for employees escalates, the labor cost is partly due to the comprehensive training for new software developers and engineers. The global tech talent shortage is caused by several reasons. We highlight the most serious ones and provide decisions on preventing this issue from being a problem.
Software Developer Unemployment Rate: What is the Current Situation?
According to Statista, over 66% of respondents from the Asia-Pacific region considered the shortage of IT talent to be a threat to their company. Overall, 62% of respondents perceived IT talent shortage as a threat. Furthermore, according to Datapeople’s 2022 hiring report, the available labor pool in the tech industry has reduced significantly. The market reported a 25% decrease in applicants while the number of posted jobs nearly doubled over the same period, affecting 69% of enterprises.
According to the IEEE, the unemployment rate for engineering and computer occupations is rising faster than for other professionals. In addition, first-quarter labor statistics reveal a significant increase in jobless rates among engineers.
According to the same resource, the software developer unemployment rate for all engineers jumped from 2,9% to 3,9% from the last quarter of 2022 to the first quarter of this year. The IEEE says the numbers grew faster compared with the increase in unemployment from quarter to quarter for all professional workers — from 3% to 3,7% — over the same timeframe. And perhaps even more problematic, the IEEE says, is the unemployment rate increasing from 1,2% in 2022 to nearly 4%.
The study of Korn Ferry finds that by 2030, there will be a global human talent shortage of more than 85 million people, or roughly equivalent to the population of Germany. Left unchecked, in 2030, that talent shortage could result in about $8.5 trillion in unrealized annual revenues. In addition, by 2030, Russia could lack up to 6 million people, and China could face a shortage of twice as large. The United States could also face a deficit of more than 6 million workers, and its worse in Japan, Indonesia, and Brazil, each of which could have shortages of up to 18 million skilled workers.
US Tech Talent Shortage
Even though the US talent pool is vast and developed, the IT sector has faced a significant tech talent shortage in recent years. Moreover, as labor shortages continue to plague the U.S. economy, wages are beginning to rise for the most in-demand positions. As a result, the tech industry faces one of the most acute tech talent shortage 2022.
According to the Bureau of Labor Statistics, US tech talent shortage will reach 1,2 million by 2026, while 545,000 software developers will have left the market by then. In addition, the severe developer shortage has resulted in a rise in software developer pay, transforming IT into the highest-paid industry.
In computer occupations, the software developer unemployment rate went from 1,9% to 4,2%, and for computer scientists and systems analysts, the change was from 3% to 5,7%. The IEEE reports that computer and information systems managers saw the jobless rate rise from 2,7% to 4%, and engineering managers experienced a lesser increase, from 1% to 1,8%. According to the Manpower group, 46% of US employers reported finding tech talent shortage is their primary concern. Here are the top reasons causing the tech talent shortage across the world.
Tech Talent Shortage 2022: Why it is Hard to Hire Programmers?
The shortage of tech talent can bring a lack of specific skills in IT companies. Even experienced tech recruiting specialists sometimes face the issues of finding and attracting specific tech talents. Companies invest time and money but need to achieve success.
- Lack of Talent
The number of posted jobs nearly doubled last year, but the number of applicants decreased by 25% in the market. Hiring new employees is getting more complex when you require specific skills and experience. Even though there are many programmers, headhunting a good one is still challenging. The highest demand among tech talent is narrow profile specializations like AI architect, data analyst, product manager, and programmer analyst.
- Unfair СV Screening
Unfortunately, there is a stereotype that still exists in many IT companies. Recruiters left behind many great talents without tech education. Indeed, it will be a plus but not a guarantee that you will find great specialists. Another widespread aspect nowadays is the search for a “particular” IT specialist. Many tech owners tend to narrow their candidate pool to such an extent that hardly anyone can fit their unrealistic requirements. Witnessing the tech talent shortage, executives should start paying more attention to candidates’ potential, as most developers can quickly learn additional languages, frameworks, or tools if needed.
- Timeless Interviews
Of course, every company wants to make sure they choose the best candidate by checking their hard and soft skills. But remember that both sides are investing their time. Programmers are not waiting for long as they lose chances to catch the best company with great opportunities. So make the interview stages quick and logical and provide prompt feedback about each candidate.
- Limited Opportunities
Another reason for the global tech talent shortage is low and non competitive salaries and a lack of opportunities. As a result, a lot of tech specialists resorted to quitting. Now, if looking at the software developer unemployment rate by age, the highest mark is among people in their 20s, as post-pandemic aftereffects influenced them the most. About 65% of developers are convinced they deserve better pay, while 35% want more career growth or leadership opportunities.
How HR Bit Can Help to Overcome Tech Talent Shortage?
The tech talent shortage is the biggest concern among tech companies. The tech tasks keep appearing, but then the chances of finding the right IT specialists are lower. Did you know that it takes about 66 days to find the right software engineer for an open position – which is $680 in lost revenue a day per vacancy? Does looks very optimistic.
It is even harder for startups and small companies to attract particular tech talent successfully by offering competitive salaries and opportunities. You can introduce the company’s values, brand, power, goals, and many more. Looks like a vicious cycle. Work with a professional recruitment company to turn the shortage of tech talent into an opportunity. HR Bit is a recruitment company that focuses on your growth – not only closing skill gaps. Our goal is to provide your company with the best tech talent who will be a part of your success. We provide deep and careful talent mapping worldwide and build the whole strategy of the best countries to seek IT specialists. Thanks to our long-term experience in recruitment, we understand all tricks and legal issues of each recruiting market.
Especially if you are craving narrow profile specialists and have a limited budget – it is not a challenge for HR Bit. We know where to find skillful software developers with specific skills and attractive rates.
To Sum Up
Tech talent shortage became a headache for the majority of tech companies. Finding and recruiting specifically skilled software developers is more challenging than ever before. However, if you cooperate with professionals, recruitment agency tech talent shortage will help your business grow. HR Bit is a recruitment company with many successful cases and deep understanding of IT market in different locations.