10 Hiring Challenges Confronting CIOs
CIOs are seeing the highest level of skills shortage since the Great Recession of 2008-09 and other hiring issues, according to the Harvey Nash/KPMG 2016 CIO Survey. Find out where these challenges exist and to what extent.
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Around the globe, CIOs report facing the highest level of skills shortage since the Great Recession that began in 2008. Large enterprises are struggling to hire data analytics savants, project managers, and enterprise architecture experts. Small companies are in dire need of workers in big data analytics and development.
But that is only part of the hiring issues that CIOs are facing, according to the recently released 2016 Harvey Nash/KPMG CIO Survey. The survey of 3,352 CIOs and technology leaders across 82 countries was conducted from Dec. 12, 2015 to April 10, 2016.
[See 10 Strange Job Interview Questions Big Tech Companies Ask.]
The survey delved into the skills shortage, as well as the regions that are impacted the greatest by it. Additional results from the survey examined whether CIOs believe they are able to grow their IT teams during this shortage, the degree that IT organizations are seeking to diversify their workforce, and the type of employment they are offering, such as full-time permanent, or full-time contract work.
CIOs are having to deal with these hiring issues at a time when their own role as a top technology executive isĀ fundamentally changing to expand beyond the role of technology strategist to ones of revenue generator and business leader.
Despite these challenges, CIOs must find skilled IT workers in a difficult climate. Is your CIO encountering the same difficulties as the 10 hiring issues cited here?
Nearly two-thirds (65%) of CIOs surveyed said they believe the talent shortage will prevent them from keeping pace with technology changes. That is up by 10 percentage points from a year ago.
"I think [the skilled IT labor shortage is] fueled by two things: (1) the economy getting back on track and (2) increasing investment in digital," Bob Miano, CEO of Harvey Nash USAPC, said in an email interview with InformationWeek. "Unlike 10 years ago, many CEOs are asking the question, 'How can we make the most of digital?' In some cases, they are taking direct responsibility for it. Of the two, the latter factor is actually more important. Therefore, even if we enter uncertain times in the future, we expect tech investment at a minimum to remain stable, if not increase."
The Asia-Pacific region faces the largest shortage of workers with technology skills, according to the survey results.
"My sense is that it's simply a function of growth economies," Miano said. "The bigger driver for seeing greater demand for skills in APAC is that these economies are still growing much faster than in the US or Europe. A slowing China economy will still grow at 6% to 7%, which correlates to a growing demand for technical jobs. US growth will be approximately 2% higher this year, while Europe will be even lower. While a greater proportion of the modern US or European workforce is now technical, slower economic growth still means that the total volume of technical jobs being created are relatively lower than APAC."
"Data analytics is the biggest growth area as well as one of the newest areas of skills," said Miano. "Organizations are still in catch-up mode as the amount of data captured and positioned for analysis grows exponentially. The demand for actionable data is huge right now. Technology innovation is creating more data which now needs to be analyzed and transformed and made actionable."
He noted that all skills are not equal. Data analytics and digital and technical architecture skills are in more demand this year compared to previous years, while more generalist skills like project management and business analysis are posting a slight drop in demand.
In drawing the distinction between a small company of 500 or fewer employees and a large enterprise with more than 5,000 employees, there were differences in the top three skills most in-demand.
For large enterprises, big data and analytics were the skills in short supply, followed by project management and enterprise architecture. Small organizations also found the largest skills shortage was in big data and analytics, but either development or programming was next, followed by project management.
"We've found that in small companies, project management is just as alive and kicking as it is in larger ones, but there is a tendency, perhaps even an intentional one, to not give it that formal name. Projects that have a strong agile, innovative, or experimental element can often fall into 'it's a project by any other name' category," Miano observed. "In some areas of the world, the concept of formal project management has fallen out of fashion, as tech teams strive to become quicker and more innovative."
The percentage of CIOs surveyed that say they plan to increase their head count this year over last year remains the same at 44%, and the percentage who say they plan to decrease headcount also stands at 17% compared to last year. Although staffing appears to be holding steady, nearly nine out of 10 CIOs surveyed expressed "some" or "great" concern about retaining their best staff.
"The proportion of CIOs expecting to increase their teams has remained remarkably steady in the last two years," said Miano. "I think what this shows is that despite the ebb and flow of the world economy, investment in technology has been relatively insulated."
CIOs and tech leaders at small companies with fewer than 500 employees, or who worked at organizations with growing IT budgets, when surveyed, said they felt it was easier on average to retain their IT staff, while others said they felt their organization's culture played a big role in attracting and retaining employees.
With fewer layers of management in small businesses, junior staff may often get more responsibility and opportunities to grow their career, Miano said. "Even in big companies, people feel most closely aligned to their immediate teams, which is typically a smaller team. Therefore, if your team of three to five technologists is the group in the organization that is innovating, or is responsible for the all systems that keep the business open, you are going to get more direct access to senior managers and participate in more projects that have a direct impact on the business. When you are in a small team, there is an emotional bond that often binds people together."
When comparing the technology industry to other industries, including pharmaceutical and healthcare, 50% of survey participants who worked at technology companies said they felt their company's culture made it easier to retain workers. Tech companies are known for lavish perks such as free cafeteria food, free massages, and unlimited vacation time, as part of their corporate culture.
Survey respondents who work for governments were not as optimistic in their ability to retain IT workers, with only 24% noting they believed their organization's culture helped to retain workers.
While only a third of survey respondents reported having a formal diversity initiative at their organization, another 23% noted their company plans to put one in place. For enterprises, this type of initiative may greatly help in attracting and retaining women and minorities -- of which both groups make up a small fraction of IT departments.
"There genuinely seems to be an upward trend. In 2012, 7% of the survey's respondents were female. Over time this has ramped up to its current figure of 11%. It is also clear to us the organizations are increasingly focusing on this area," said Miano.
Since the end of the Great Recession in the 2009-2010 timeframe, depending on your location and sector, economies recovered and business owners gained confidence, Miano noted. He added there has been an ongoing shift toward hiring full-time employees, based on corporate profits. "There has been a (very minor) increase in the use of contingent contractors during 2015 and 2016. As long as the wider economy remains stable, expect the labor market to be heavily weighted toward full-time contractors," he said.
CIOs and IT leaders at small companies used contract workers with far more frequency than large companies. For example, 7% of survey respondents who work for companies with 500 or fewer employees reported that 76% to 100% of their workforce is comprised of contingent workers, compared to 2% for large enterprises of 5,000 people or more.
But Miano noted the 7% figure for small companies is an anomaly this year due to increased number of respondents. He also said that it is worth pointing out that 47% of small companies only have 10% or less of their workforce as contingent staff. "Bigger companies are more likely to use contingent labor for their IT project," he noted.
"Last year only 3% of small businesses had more than 75% of their team as contingent staff (in line with 4% of larger businesses who said the same in 2015). This reinforces that the 7% figure for small businesses this year is a bit of an anomaly -- and probably the result of new respondents influencing the result," he said. "That said, our experience (that larger business are often a little more dependent on contingent labor) is likely to be accurate."
CIOs and IT leaders at small companies used contract workers with far more frequency than large companies. For example, 7% of survey respondents who work for companies with 500 or fewer employees reported that 76% to 100% of their workforce is comprised of contingent workers, compared to 2% for large enterprises of 5,000 people or more.
But Miano noted the 7% figure for small companies is an anomaly this year due to increased number of respondents. He also said that it is worth pointing out that 47% of small companies only have 10% or less of their workforce as contingent staff. "Bigger companies are more likely to use contingent labor for their IT project," he noted.
"Last year only 3% of small businesses had more than 75% of their team as contingent staff (in line with 4% of larger businesses who said the same in 2015). This reinforces that the 7% figure for small businesses this year is a bit of an anomaly -- and probably the result of new respondents influencing the result," he said. "That said, our experience (that larger business are often a little more dependent on contingent labor) is likely to be accurate."
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