The shortage of tech talent has been an ongoing challenge, even before the pandemic made it more pronounced. Companies undergoing digital transformations were already struggling to find skilled developers. The shift to remote work further widened the gap, as demand for tech professionals continued to outstrip supply. This trend shows no signs of reversing.
Gartner predicts that the demand for specialized tech talent will outpace supply through 2026. As we move into 2025, tech companies face a critical question: how can they navigate the challenges posed by the tech talent shortage?
What is the Reason for the Global Tech Talent Shortage?
The shortage of tech talent is a significant concern, particularly for startups and mid-sized companies. These businesses often compete with tech giants for a limited pool of skilled workers. Even with over 150,000 layoffs occurring in 2024, these companies continue to struggle to fill high-skilled positions, especially in areas such as artificial intelligence (AI), cybersecurity, data analysis, machine learning, and cloud computing.
Why does this shortage persist? It's tempting to attribute it solely to the rapid digitization that the pandemic accelerated. However, this shortage didn't originate with the pandemic; it was already a growing trend beforehand due to several factors, such as:
1. Lengthy Recruitment Process
In many organizations, established processes are required to fill talent gaps. Specifically, hiring tech experts can be a protracted affair, involving multiple steps such as assessments, tests, and various interviews. These processes often require final approval from different executives and hiring managers before extending an offer. This hiring timeline can span weeks or even months. On average, it takes 41 days to fill a job role, with more technical roles taking about 70 days to fill.
Lack of Continuous Training & Upskilling
Many companies lack a comprehensive plan for the professional training and development of their employees. Most employers view this as an expense they may not be willing to undertake. As a result, there is little motivation or planning to upskill employees for the future of tech and work. This neglect could impact the quality of work produced by them. Over 59% of employees state that they receive no training and development for their positions, and 70% of surveyed workers intend to leave their current jobs due to a lack of employee development.
Slow Adoption of Emerging Technologies
While many companies are embracing digital transformation across their operations, some are struggling to keep pace with emerging technologies. In fact, $2.5 trillion was invested in digital transformation initiatives in 2024. From artificial intelligence to machine learning, big data, and cloud services, the technological landscape is rapidly evolving.
Yet, despite the growth of artificial intelligence in recent years, some organizations are still hesitant to integrate AI into their operations. This reluctance can lead to missed opportunities and a diminished competitive edge. As a result, these companies risk losing not just profitability but also software engineers who are skilled in these areas.
Rising Costs
The current economic recession has put employers in a tough spot, caught between increasing the salaries of software developers and tech experts and laying off staff to remain profitable. Training an employee is an additional cost of doing business. However, if salaries are not competitive and don't keep pace with the market, companies may lose their top software developers and struggle to fill talent gaps.
How Tech Talent Shortage Can Affect Businesses
The consequences of a tech talent shortage extend far beyond mere job vacancies; they also include interruptions to business operations and financial performance. So, what exactly do businesses stand to lose from this shortage in tech talent? We highlight some major points here:
- Hindered Innovation and Product Development: To gain a competitive edge in the industry, constant innovation and the development of quality solutions are essential. One of the most immediate impacts of a tech talent shortage is its impact on innovation and product development. A scarcity of skilled tech workers can delay projects, time-to-market, and developmental initiatives.
- Operational Disruptions: When a company lacks the necessary tech specialists, it becomes vulnerable to operational disruptions such as downtimes, technical glitches, cybersecurity threats, and routine updates. This lack of skilled experts can jeopardize both a company's reputation and customer satisfaction.
- Decline in Quality and Efficiency: Poor hires can be costly for an organization. A lack of tech staff can compromise the quality and efficiency of work, leading to dissatisfied customers, errors, and delays. Given this limited talent pool, many companies opt to use software development and outsourcing firms that can provide them with the right tech skills on demand.
- Increased Costs: Skill shortages often drive up the price of in-demand expertise. To attract and retain top tech talent, businesses may find themselves offering higher compensation packages and other perks, thereby inflating operational costs.
- Missed Opportunities for Expansion: Companies seeking to grow rely on technology to enhance speed, quality, and operational scalability, improve customer experiences, and enter new markets, whether in tech or other industries. However, an IT worker shortage can impede these growth plans, preventing businesses from taking advantage of innovative opportunities that come their way.
- Reputational Risks: Companies spend years building a trustworthy reputation. A talent crunch can undo years of effort, with frequent downtimes and security breaches damaging the company's reputation. This is particularly concerning in the age of social media, where such news spreads quickly and can have long-lasting implications for brand trust and credibility.
Read also: 5 Top Tips For Managing A Remote Software Development Teams
How to Overcome Tech Talent Shortage in Your Business
Having assessed the major pitfalls of experiencing a tech talent crunch in your organization, it's important to address this IT talent shortage with practical solutions. Below, you can check some of the things you can do:
Leverage Staff Augmentation
Save time spent on lengthy recruitment processes by leveraging staff augmentation to hire software developers and fill other tech positions. Whether for short-term or long-term projects, staff augmentation can help you secure tech talent within 14 days or fewer, depending on your software outsourcing vendor. Utilizing IT staff augmentation provides you with a pool of global tech talent and pre-vetted candidates, ranging from senior IT leaders to junior developers, based on your business needs.
Staff augmentation helps you stay ahead in the evolving industry and develop quality software solutions quickly, thereby increasing your speed to market and gaining a first-mover advantage. It allows you to access a wealth of knowledge from other software developers in the industry beyond those on your in-house IT team. With staff augmentation, you can choose to expand your in-house team or build a dedicated team focused on your projects.
Additionally, IT staff augmentation can help you gain tech experts capable of transforming your digital products.
Access a Larger Talent Pool
Through either staff augmentation or software outsourcing, your business can tap into a larger talent pool. It's beneficial to explore nearshore services to acquire highly skilled workers for your team. Since the onset of the pandemic, many businesses have transitioned to remote work, making software developers more accessible. For instance, if you partner with Devsu, you gain access to over 40,000 pre-vetted tech talents who can collaborate with your in-house tech team or form a dedicated team from these talents.
Continuous Upskilling & Reskilling
Many employees wish to grow their tech skills while executing their daily responsibilities. Upskilling and reskilling employees enhances retention rates and fosters a sense of belonging, motivating employees to give their best. This could take the form of educational bonuses, ongoing training, and online courses. Investing in your employees' professional development benefits both you as a tech leader and the organization as a whole. In fact, 65% of workers would remain with a company that ensures reskilling opportunities, and 68% would stay with an employer focused on upskilling them.
At Devsu, we take pride in ensuring that all our employees continually evolve and learn the latest tech skills needed for constant growth. We offer educational bonuses and have a continuous learning plan for each employee. In addition, we host weekly programs that include knowledge-sharing sessions, code jams, and many other activities. Currently, we have a 95% employee retention rate.
Prioritize Project-Based Hiring
While traditional hiring focuses on long-term roles, prioritizing project-based hiring can be an effective strategy against the persistent IT talent shortage. This approach allows your software business to rapidly onboard highly skilled tech experts for the specific duration and scope of a project, without the long-term commitment. This model is closely aligned with staff augmentation, letting you scale your team quickly based on project requirements.
Cultivate a Culture of Remote Collaboration
The shortage of tech talent can be mitigated by expanding your hiring pool geographically. The pandemic has made it clear that remote work is not only possible but often advantageous for a software business. By cultivating a culture that embraces remote collaboration, you can seamlessly integrate augmented or outsourced teams into your existing workflows.
Additionally, having the right communication tools and establishing protocols for remote team integration allows for seamless collaboration between your organization and a staff augmentation vendor.
Conclusion
Despite massive tech layoffs and economic recession, many businesses still find it challenging to hire the right tech talent for their teams. IT leaders are constantly seeking effective strategies to fill talent gaps quickly in order to complete projects and increase the speed of software development initiatives.
The ideal solution to the shortage of tech talent is to leverage staff augmentation vendors for building high-quality software solutions and sourcing the right tech employees for teams. From software engineers to UI/UX specialists and machine learning experts, businesses can access a pool of global tech talent by hiring a trusted outsourcing partner.
If you'd like to gain deeper insights, explore true stories of companies that successfully utilized staff augmentation to resolve their tech talent shortages. Learn how this approach not only helped them bridge skill gaps but also discover how it can similarly benefit your organization.
