Competition for top digital talent remains fierce

Author Moonshot.news

Published on: 26/04/2023

Even with recent tech industry layoffs, the tech talent shortage shows few signs of abating. A ZipRecruiter survey conducted in October found that 79% of recently laid off tech workers found a job within three months. As the economic landscape continues to shift in the wake of the pandemic, the urgency of harnessing technology to drive change has endured, a report from consultancy McKinsey says. “Digital-talent cultivation has become a top organization-wide priority across industries, and the competition for top talent remains fierce.” 

“Conversations with employers indicate that recruiting top digital talent remains a struggle, with even the highest-performing companies having difficulty hiring workers skilled in high-growth areas like AI”, write McKinsey partner Todd Horst, associate partners Kathryn Kuhn, Stephanie Madner and Charlotte Seiler and senior partner Paul Roche.

Concerning diversity issues, the authors say that it is particularly important to note the distinctions in how different demographic groups value the attributes. 

“In one example, our research found that while career development and compensation are top concerns for women, they care more than men about workplace flexibility.” 

“53% of women, and 44% of men, cited workplace flexibility as a major factor behind their resolve to stay in their jobs.”

They note that previous research has shown that women leaders are significantly more likely than men leaders to leave their jobs because they want more flexibility or seek to work for a company that is more committed to employee well-being and diversity, equity, and inclusion.

“After many years of compensation being considered the paramount factor in attracting digital talent, our research reveals that career development and advancement potential are now on par with compensation as top factors influencing job-related decisions for workers in the digital space.”

The authors say this is true at all four critical decision-making junctures: deciding to stay in a job; leaving a job; planning to leave a job; and accepting a new job. They say this is valid across all five job families surveyed: cloud engineers; data scientists; product managers; SaaS administrators; and software engineers.

McKinsey Global Institute research shows change is a constant in the tech labor market. Tech workers change roles every 2.7 years, while workers in other professions, by comparison, do so every 3.2 years.

“Often, companies are reluctant to invest in career development for digital talent precisely because attrition is so high”, the report says. 

However, the authors argue, by investing in the right kind of career development opportunities, it is possible to stem attrition in a way that is sustainable over the long term (in contrast to merely increasing compensation, which may only temporarily buy employers more time).

“This is especially important for keeping younger workers, who are particularly willing to change jobs and, as expected, care even more about career development than their older colleagues (who are already further along in their careers).”

“Our own data shows that 54% of those aged 18 to 34 rank career development and advancement potential as a top reason for staying in their current job, compared with 40% of those aged 45 and above.”

“For today’s digital talent, career development is not simply about securing tickets to buzzworthy conferences a few times a year. Our findings suggest that digital talent heavily values working at organizations that fully embed learning into every aspect of their culture and encourage employees to invest in their own development and advancement.” 

“By creating compelling opportunities for this group, leading organizations are not just satisfying employees’ demands but also enabling them to be successful in ways that substantially improve individual and organization-wide performance.”