The IT shortage is escalating and poised to be a risk to organizations worldwide, irrespective of industry vertical. Organizations’ dependency on IT means they face risks across their ecosystem. A scarcity of highly skilled resources has made it hard to drive business priorities and execute commitments, leading to delays and losses.
Critical IT responsibilities like digitization, data security, and compliance are facing delays or being sidelined due to team shortages. Some resorted to upskilling their workforce, while others embraced offshoring. But the IT shortage is so pronounced that despite this finding seasoned talent has become difficult.
Are critical resources more concentrated in one region, are some regions more vulnerable to talent crisis, or is this talent crisis story playing out the same worldwide? Let’s explore and find out.
IT Shortage in North America
The talent landscape is getting competitive; some tech workers have multiple job offers and aren’t necessarily that eager or desperate to commit ASAP. According to Deloitte, 70% of technical workers had multiple job offers when they took their most recent role. So much so, that as per McKinsey, “In North America, about 80 percent of tech workers who had been let go in 2022 found a new position within three months,” reinforcing how companies are vying left and right for exceptional talent.
From banking to healthcare, logistics to FMCG, companies across industries are undergoing digital transformations, augmenting the need for highly skilled tech workers. But the rapid evolution of technology has outpaced the training and upskilling of employees. The University pass-outs aren’t calibrated with real-world project methodologies and lack the necessary expertise to perform work-related tasks.
Tech talent gap is one of the reasons why companies can’t close vacancies sooner. Organizations seek candidates proficient and competent in emerging technologies such as AI and ML but struggle to find one. Lareina Yee, Senior Partner at McKinsey, stated “Tech is facing a wide skills gap, according to an analysis of 4.3 million job postings across 15 tech trends. “ In essence, there is a serious mismatch between available and in-demand skills.
Also, the rise of automation has contributed to some skills becoming extinct. Entry-level roles have become automated – no-code tools have replaced them. As such, freshers are expected to bring more to the table. Some have embraced this – preparing for the new workplace, others have changed career paths – further shrinking the total pool.
IT Shortage in Europe
Europe too isn’t far behind. It too faces a shortfall, and one McKinsey estimate shows “a tech talent gap of 1.4 million to 3.9 million people by 2027 for EU-27 countries.” The European tech industry faces significant challenges due to labor shortages and skills gaps, particularly when it comes to adopting emerging technologies like Gen AI.
As per Deloitte, “European organizations are less active in reskilling workers, educating their workforce, and recruiting technical talent.” The existing skill shortages further compound the limited talent pool problem. IT shortages combined with minimal to no investment in reskilling workers hinder Europe’s ability to leverage the benefits of emerging technologies such as AI.
A broader technology literacy is needed for the new graduates, especially the tech stack that is most prevalent in the IT space. Otherwise, it’ll come down to investing in compulsory training and development which ends up being a costly affair. The new-age digital trends like Gen AI promise increased efficiency, innovation, and competitive advantage – provided you have a workforce that learns it head-on.
IT Shortage in Asia
In Asia-Pacific, 66% of business leaders still view IT shortage as a business threat (Statista, 2022). But compared to other regions, Asia is more proactive in addressing it. Deloitte reports that 40% of companies in the region are actively educating their workforce on AI.
India, in particular, stands out with 2.14M annual STEM graduates and initiatives like the IndiaAI Mission, which aims to scale AI skills across educational levels and regions. In FY2021 alone, 65–70% of India’s digital talent pool came from reskilling programs (NASSCOM).
China, too, is investing heavily in AI education, R&D, and talent acquisition strategies to meet emerging tech needs. While the region still faces challenges like rapid tech changes and reskilling at scale, Asia’s commitment to tech education gives it a leg up in the global talent race.
What can be done?
There’s no one-size-fits-all fix, but some strategies are proving effective:
Skill-Based Hiring:
Hire for capabilities, not just degrees. Focus on actual skills, project experience, and growth potential.
Offshore Hiring:
Offshoring opens access to broader talent pools in regions like India and China. Gartner reports that 58% of companies now hire remote tech workers across borders.
Academic Alignment:
Collaborate with educational institutions to align curricula with market demands. One tech giant’s AI program offers 225+ hours of coursework to U.S. community colleges.
Diversity Focus:
Talent pools are still underutilized. Women make up just 16% of U.S. engineers. Europe could close its talent gap by doubling female tech representation.
Talent Experience:
Look beyond resumes. Prioritize candidates with training, certification, curiosity, and adaptability. Invest in creating environments that support continuous learning.
Wrapping Up
The above write-up underscores the urgency for organizations to address the IT shortage. Going ahead organizations may need to rethink and transform their hiring strategies for planning, attracting, and activating tech talent. Either through upskilling/reskilling or attracting skilled workers from remote regions more immune to talent unavailability – an offshoring model.
If you’re considering going offshore to meet your development goals, Agiliti is your strategic partner. With Agiliti, you get more than offshore developers! Get a fully managed global talent engine that scales with your growth. From sourcing and onboarding to day-to-day management, we handle the talent headache, so you can focus on what really matters: driving your business forward.
