Hyped technologies create staffing pressures. And as technology gets more complex, it’s harder to understand what skills are needed and identify who has them.
Being on the leading edge of network and information systems technology comes with its challenges, and enterprises say one challenge, in particular, is growing every year. What is it? It’s difficulty hiring and retaining skilled workers.
Enterprises are competing for talent in the job market with vendors, cloud providers, and startups – competition that can often offer not only higher salaries but also better advancement. One cloud expert, in an exit interview with her current financial-sector employer, said “Here, I’m in the top job in my space, and I’ll never have a shot at being a CEO. With [new cloud company], I’ve got unlimited upside.”
That’s not the only issue out there, though. Consider another financial-sector company that hired six cloud developers, only to have the CFO turn down the proposed cloud project because it didn’t meet ROI targets. Or the healthcare company that hired an AI expert then found out the internal audit group wouldn’t approve the application the expert proposed, for compliance reasons. Or the network vendor whose “doctor of operations research” hire turned out to be nothing but a glib talker with a two-year associate degree.
Let’s face it, getting the right people for a tech job has always been a challenge, but it’s gotten a lot harder as technology itself has gotten more complex. Today, it’s a challenge for management to understand what the needed skills are, and deciding who has them is sometimes a complete crapshoot.
Of 298 enterprise professionals who commented on hiring and staff skill sets, 221 were hiring people to work with technologies the company already had in use. That means they had people who knew what to look for, had experience finding candidates, and knew how to retain them. There were few new issues reported in this area. (Read more career news in our index of hiring, skills and certification trends)
Still, enterprises did report that problems in hiring were rising, driven by two forces. The first, cited by 253 of the companies, is the influence of senior management to acquire workers with specific new skills just because management believed those skills would be needed at some point. The second, cited by 157 companies, is the need to acquire new skills just to evaluate and plan modernization projects that CIOs had identified. You can see that the common theme here is new skills.
When an enterprise needs technical skills not available on staff, they face the immediate problem of “How do you recognize a good candidate?” In all, 166 enterprises said they’d encountered this problem in 2023/2024, and 54 said they picked the wrong candidate at least once. In 18 cases, the company felt they were tricked by the candidate, and in all of those instances plus 12 additional cases, the new hire lasted less than 6 months in the job. Only nine companies that had picked the wrong candidate said they eventually got the right person.
Even when enterprises managed to get the right candidate for a job that required new-to-the-company tech skills, they reported that they lost almost 50% these hires within the first year. By comparison, enterprises reported losses of less than 8% on hires for positions that required skills that were already available and in use in-house. When a new-technology-experienced hire left (or was terminated) in the first six months, two-thirds of those cases resulted in a delay of at least six months to the project, and a few resulted in a project failure.
The reason for the higher attrition that enterprises reported is difficult to isolate, given that less than half of departing employees shared a specific reason. But one-third of the departing employees cited the problem of a lack of a career path, half indicated that a better salary was available elsewhere, and roughly the same percentage cited a “lack of technical challenge” or “opportunity for professional development.” Enterprises suspect that, because the hiring was for a technology new to management and HR, the compensation packages were more likely to be unrealistic, and the new hire was concerned their role might not develop into a good career opportunity.
There were also 88 hires associated with projects later rejected/canceled for lack of a strong business case or for compliance reasons. Most (46) of these involved AI or cloud computing, and most were driven by people outside the CIO organization. Some of these issues may be due less to job candidates over-promoting themselves than to the company over-promoting its future technology plans. A total of 209 companies said they lost “quality” candidates because their projects didn’t involve advanced technologies the candidates wanted to add to their professional skill set. Of that number, 188 admitted they sometimes talked about potential future projects that had not really been fully assessed, much less approved, to create a more interesting job description.
Let’s return to the question of qualification of job candidates, which is the issue all enterprises seem to face. How does a company validate the qualifications of a job candidate? All of the 298 enterprises offered the same number one response—validated experience. The best option is a candidate with references that can be checked and that show they know the technologies required and can handle their proposed role in projects; enterprises say this cuts the number of “suboptimal” hires by over 80%. One side effect of this, of course, is that a new-technology hire probably has to be fairly senior, or they’ll either have no prior job to cite, or they won’t be able to give a reference that a prospective employer can check without putting the employee at risk. This is one reason why junior people are reportedly having difficulty finding a job, even though their education may have qualified them in a hot field.
Technology advances always generate a need for new skills. Hype, because it may suggest an advance that’s not real, can create staffing pressure that’s not justified, diverting management and senior personnel resources and interfering with the lives of new hires and the credibility of enterprises as a good place to work. The net of this, as advice from the enterprises who contributed views here, is to be realistic. And when new technology skills are needed, pick a leader first, one with experience in making the business case and organizing technical resources. Then let the leader fill out the rest of the team as needed.
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