The 2024 State of Talent in the IT Sector
Irving Wladawsky-Berger | 03 September 2024
A few months ago the Linux Foundation (LF) published the “2024 State of Tech Talent Report,” a comprehensive analysis of talent management practices in the IT sector. The study is based on a web survey conducted by the LF and its partners earlier this year. The survey reached out to individuals responsible for hiring and training IT professionals around the world to better understand the current state of talent acquisition, retention, and management.
The survey analyzed data from 418 respondents carefully chosen to eliminates sample bias and ensure high data quality. Respondents came from companies of different sizes across a variety of vertical industries: 17% worked in organizations with less that 250 employees, 57% worked in organizations from 250 to 4,999 employees, and 26% in organizations with more than 5,000 employees.
Respondents included IT vendors, service provides, nonprofits, academic institutions, and government organizations from around the world: 30% came from organizations headquartered in the US and Canada, 19% from Japan, 18% from Western Europe, 8% from India, 8% from other Asian countries, 4% from Eastern Europe, and 4% from Latin America.
The survey’s 42 questions addressed a variety of technical talent topics. Let me discuss a few of the survey’s key findings.
Upskilling or cross-skilling staff is at the top of the talent agenda across all technology areas for 2024
Cross-skilling (47%) & upskilling (43%) are key strategies for technical talent management. Cross-skilling is the process of diversifying the skills of the existing technical staff that can be applied to different roles or departments in order to enhance the flexibility and resilience of the organization, while upskilling involves providing employees with more advanced skills through additional training and education to meet evolving job requirements.
Organizations employ diverse strategies to address their technological needs. 90% rely on cross-skilling and upskilling their existing staff; 49% hire new IT professionals with experience in the new technology; and 19% hire consultants to support their projects.
98% of organizations consider upskilling an important strategy to address their technical talent, with 36% rating it extremely important and 38% rating it very important. Only 2% said that it was not every important.
94% of organizations consider hiring full or part-time staff an important strategy to address their technical talent, with 17% rating it extremely important and 37% rating it very important. Only 5% said it was not very important.
A significantly higher number of organizations involve only training methods (39%) — both cross-skilling and upskilling, — in their talent agenda compared to those which only involve hiring methods (29%).
The most cited benefits of upskilling emphasize its ability to diversify employee skillsets for redeployment (40%), advance careers (40%), help junior staff expand their capabilities (40%), and being a more cost effective way of increasing technical expertise (35%).
Across 19 technology domains examined in the study, 48% of organizations would prioritize upskilling or cross-skilling existing staff on average over hiring new employees or engaging consultants in 2024.
Cloud (55%), DevOps (51%), Cybersecurity (49%), & AI/ML (43%) stand out as the key technology domains prioritized for upskilling or cross-skilling existing technical staff, with open hardware (40%) ranking at the bottom. For cloud technologies, 54% of respondents prioritized upskilling/cross-skilling, 24% prioritized hiring technical staff, and 22% favored hiring consultants.
The impact of the economy on technical talent management
Despite the news headlines, the majority of IT organizations did not reduce their headcount in 2023. The 2024 Tech Talent Survey showed that only 29% of organizations reported an actual reduction in their technical headcount in 2023, 34% remained unchanged, and 37% increased their headcount. However, compared to the planned changes reported in last year’s 2023 Tech Survey, more organizations implemented reductions than the 20% initially planned for, and fewer increased their headcount than the 50% that planned to do so a year earlier. Both IT vendors and end-user organizations reduced their technical headcount at a similar rate, but 42% of IT vendors increased their headcount compared to 29% of end-user organizations.
Overall, sentiment about the 2024 economy among most organizations is not positive, with 46% expressing similar levels of concern as in 2023, 34% reporting higher concerns, and 15% reporting fewer concerns. In general, the US and Canada have a more positive outlook for 2024 than Europe and Asia-Pacific.
The potential impact of Generative AI (GenAI) on hiring and work roles
“GenAI continues to drive intelligent automation across the workforce, with organizations planning to use it for data analysis and reporting, IT infrastructure monitoring, and software development. While some organizations are reducing headcount due to GenAI, many are planning to maintain or increase their overall technical headcount. While much is uncertain about the actual impacts of GenAI on the workforce, one trend is clear: knowing how to work effectively with GenAI will be a competitive advantage for organizations and IT professionals.”
The impact of GenAI is complex. 18% of organizations reported that GenAI reduced their technical headcount in 2023 and 27% expect that it will reduce their headcount in 2024; 24% plan to increase their technical headcount in 2024 due to GenAI, 29% expect that GenAI will not impact their headcount, and 12% are not sure.
Responding organizations said that their primary applications for GenAI include: data analysis (45%), IT infrastructure monitoring (42%), software development (35%), network management and security (29%), project management (29%), system maintenance (28%), quality assurance (23%), and help-desk services (21%).
Technical recruiting remains a challenge
Recruiting challenges include: the high costs and time consumption of recruiting, which often does not even lead to the right candidate (43%); problems in finding the right candidate with the right skills (38%); verifying technical skills claims (37%); and hiring the wrong candidate (35%).
External hiring is both lengthy and risky. On average, organizations spend more than four months to fill an open position, 10 months to hire and onboard new technical hires, and nearly 40% experience turnover.
Almost 90% of organizations consider relevant hands-on experience on previous employment as the key factor in assessing technical skills, with 71% saying it’s extremely or very important; 87% consider a portfolio of previous IT project accomplishments as a key factor, with 58% saying it’s extremely or very important; 84% consider certification of skills as a key factor with 55% saying it’s extremely or very important; and 80% consider a formal university degree as a key factor with 46% saying that it’s extremely or very important.
The top training challenges include nurturing a continuous learning environment (39%), and translating knowledge into practical applications (36%), — highlighting the effectiveness of performance-based training.
“Taking a step back to the big picture, the major trends we have seen for more than a decade continue, said the 2024 LF Tech Talent Report. “The pace of technological evolution continues to accelerate along with the challenges of identifying, recruiting, retaining, and upskilling IT talent. It appears, however, that organizations are shifting their approach. The hire-at-all-costs perspective is carefully being replaced by an approach focused on identifying smart, talented, IT professionals and providing them with the tools they need to keep themselves — and the organizations they work for — along, if not ahead of, the curve.”
Irving Wladawsky-Berger
About the Author
Dr. Irving Wladawsky-Berger is Visiting Lecturer at MIT’s Sloan School of Management, a Fellow of MIT’s Initiative on the Digital Economy and of MIT Connection Science. He retired from IBM in May of 2007 after a 37-year career with the company, where his primary focus was on innovation and technical strategy. He’s been an Adviser on Digital Strategy at Citigroup, HBO, and MasterCard. He’s been writing a weekly blog, irvingwb.com, since 2005 and was a guest columnist at the Wall Street Journal CIOJournal. Dr. Wladawsky-Berger received an M.S. and a Ph.D. in physics from the University of Chicago.
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