More than 69% of digital leaders report they are unable to keep pace with change due to lack of talent

As companies across the U.S. signal their intentions to increase technology investments (61%) and headcount (60%) to record levels, a massive skills shortage threatens to stymie the seemingly unending growth of the tech sector, according to the 2021 Harvey Nash Group Digital Leadership Report. The Digital Leadership Report, in collaboration with CIONET and contributed to by Massachusetts Institute of Technology CISR, is the world’s largest and longest running survey of senior technology decision makers.

“This year’s report reveals a depth of insights into how digital leaders successfully address critical issues related to attracting and retaining skilled technology talent,” said Jason Pyle, president and managing director of Harvey Nash USA. “Digital leaders are committed to increasing headcount and investing in technology talent, while recognizing that building a productive, successful and satisfied workforce takes a new approach to broadening skillsets, increasing mental wellbeing and committing to diversity and inclusion initiatives.”

This year’s report reveals critical factors that continue to impact the growth of the U.S. tech sector, including:

  • Record tech investment and headcount – The number of digital leaders in the U.S. planning to boost their technology investment and headcount reached record levels, (30% and 36% respectively).
  • Impact of skills crisis on business growth – More than two-thirds (69%) of digital leaders in the U.S. are now unable to keep pace with change because of a dearth of the talent they need.
  • Where skills shortages are most acute – Cybersecurity (43%) is the most sought-after tech skill, up by 11% in the last 12 months, followed by DevOps (39%), and big data / analytics (38%).
  • The shortage of developers rises the fastest – The shortage of developers (39%) saw the biggest increase compared with previous years. Harvey Nash Group says this shortage correlates with the report’s finding that companies are focusing on creating new products and services, and therefore need developers to do this work.

Shifting priorities impact employee retention

The report also found that new life priorities, post-pandemic, are complicating digital leaders’ ability to match technology investment goals with the right talent. Eight in 10 digital leaders report that this mindset shift is making retention more difficult than ever; in fact, just four in 10 digital leaders admit they can retain employees in key roles for the tenure they would like. Yet despite these retention challenges, only one in three organizations (29%) have redesigned their employee offers to make them more attractive to staff in the new hybrid working world.

Bridging the tech skills gap

In response to these unprecedented skills shortages, digital leaders are aiming to broaden the skillsets of their tech teams, with over half (54%) planning to cross-train people in other parts of their organization. The number of apprenticeships offered is expected to see a boost this year, as 28% of digital leaders said they would be offering more internships over the year ahead.

Outside of training and using niche consultancies to bridge the gap, almost half (45%) of digital leaders have widened their geographical net to source new talent, as hybrid working becomes more commonplace.

“With businesses planning record levels of digital investment, we could be standing on the verge of a ‘second renaissance’ for technology. Organizations are looking to push their digital transformations further and faster than ever before, putting technology at the very heart of how they operate. This will take them beyond being merely ‘tech-centric’: technology will literally be dispersed throughout the business, everywhere,” said Bev White, CEO, Harvey Nash Group. “But these ambitions are coming under threat from the acute skills shortages that are now worse than ever before. In fact, businesses face a triple whammy. They lack the supply of skilled resources they need; they have not yet evolved a new and effective employee value proposition for the hybrid working world; and the needed skills themselves are changing as technology develops at an accelerated pace. Digital leaders need to rapidly assess their needs and find solutions if their plans are not to be derailed by this potent cocktail of challenges.”

A new approach to diversity and inclusion improves quality of hire

This year’s report revealed what’s working and what’s not when it comes to building a diverse technology workforce. What’s clear is that training, communication and support networks are key and the most successful approach.

  • This year 21% of the digital leaders surveyed identified as female vs. just 13% in 2020 and the average proportion of females within the technology team is 28%, which shows promise for the leadership of the future.
  • The research found that six in 10 respondents believe their approach to diversity and inclusion is improving the quality of their hires, noting that the most successful strategy for promoting diversity and inclusion is about creating the right culture, not about mandating shortlists or quotas.

Remote working is a double-edged sword

Remote work has massively improved work/life balance and productivity, but at the same time, mental wellbeing, staff engagement, collaboration and inclusivity have taken a big hit.

  • Over half (54%) of digital leaders reported a decrease in the mental wellness of their tech teams.
  • To combat this, 27% of U.S. digital leaders have increased their investment in health and wellbeing programs.

Other key findings from the world’s largest dedicated digital leadership survey include:

  • Sustainability needs more traction – Although U.S. boards recognize that cleaner, greener technology will improve their carbon footprint, it is placed last in the list of priorities for their technology teams. As a result, only 16% of their digital leaders have reduced the carbon footprint of their own technology to any great extent. The report says that reducing the carbon footprint of power-hungry tech represents both a huge challenge and opportunity for companies and their digital leaders.
  • An age of disruption – The pandemic has forced organizations to re-imagine the way they do business. Creating new products and services has become a top three board priority for the first time since Harvey Nash’s research began 23 years ago. Half (52%) of organizations have major plans for transformation in the next two to three years.
  • Cloud leads investments in technology – Although cloud is now regarded as a mature technology rather than an ‘emerging’ one, the number of digital leaders with some kind of implementation jumped from 59% in 2020 to 92% today. At the same time, the number of implementations of new technology such as IoT and robotic process automation (RPA) have grown considerably since 2019.
  • The fuzzy organization – Businesses are emerging from the pandemic with their people in disparate locations, more technology embedded within the cloud and their supply chains diffused. This makes it harder to delineate the ‘boundary’ of an organization and presents a new challenge for all digital leaders.

About the Report

The 2021 Harvey Nash Group Digital Leadership Report is the world’s largest and longest running survey of senior technology decision makers. Launched in 1998 and previously called the CIO Survey, it has been an influential and respected indicator of major trends in technology and digital for over two decades. This year, a survey of more than 2,100 digital leaders took place between July 8th, 2021 and October 11th, 2021, across 87 countries.

You can register for the launch event, which takes place on Tuesday, November 9th at 4pm GMT, here. To request a full copy of the results, please visit www.harveynashgroup.com/DLR.

About Harvey Nash Inc.

Harvey Nash Inc. is a part of Harvey Nash Group, the leading global provider of talent and technology solutions. Our network spans 2,800 colleagues across 16 countries and provides a uniquely broad range of service capabilities, from recruitment and workforce management, to software development and technology solutions. We bring these together to address the unique challenges of our clients both now and in the future. Harvey Nash works with clients, both big and small, to deliver a portfolio of services: IT recruitment, IT outsourcing/offshoring and executive search. To learn more, please visit www.harveynashusa.com. Follow us: www.twitter.com/harveynashusa and www.facebook.com/harveynashusa.

About CIONET

Established in 2005, CIONET is today the largest private network of CIOs internationally. We have established leading communities of practice in 25 countries across Asia, Europe and the Americas. With the active support of our national advisory boards, we have built a flourishing community of 10,000 technology executives. https://www.cionet.com/

About MIT CISR

Founded in 1974 and grounded in the MIT tradition of rigorous field-based research, MIT CISR helps executives meet the challenge of leading dynamic, global, and information-intensive organizations. We provide the CIO and other digital leaders with insights on topics such as business complexity, data monetization and the digital workplace. https://cisr.mit.edu/

Andrea Ryan ClearEdge Marketing aryan@clearedgemarketing.com 740-501-3609

Brenna Barnett Harvey Nash USA brenna.barnett@harveynash.com

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