Even before the COVID-19 pandemic and its economic impacts, a new paradigm in tech talent management had begun to emerge.
By the end of the 2010s, organizations had recognized that their tech teams provided competitive advantages. Rather than serving back-office support functions, IT was leading projects and driving organizational transformations — and some companies were hiring and managing that talent accordingly.
As McKinsey researchers Peter Jacobs, Klemens Hjartar, Eric Lamarre, and Lars Vinter write at Sloan Management Review, those companies had begun to build tech teams that were overwhelmingly staffed with coders, engineers, and makers. Further, the McKinsey team’s research found that maturity and experience in IT created huge advantages because the difference between an expert and a novice is wider in this field than in most others.
Organizations that understood and nurtured that experience were beginning to differentiate themselves. “Once a company has a model in place for assessing the maturity of its engineers, it can start to measure productivity gaps,” they write. “Researchers at one leading organization found that a single expert is as productive as eight novices. In our own experience, we’ve observed productivity multiples as high as 10.”
The economic fallout of the COVID-19 pandemic does not appear to have upended this trend. Rather, it has shifted some of the dynamics in play. Expert tech people are just as valuable as they were before the pandemic; it’s the talent marketplace that has changed.
In this post, we will explore what some of those changes are, and what companies can do now to create tech-driven competitive advantages by hiring, developing, and retaining the very best IT talent.
COVID-19 Economic Fallout Has Shaken Up Tech Recruitment
In the early stages of the COVID-19 pandemic, tech was one of the hardest-hit sectors as austere measures took effect. Startups, whose investors were preparing for lean economic times, began to cut employees.
“Bird, an electric scooter startup, laid off 30 percent of its staff [in late March 2020], while Everlane, an apparel company, cut or furloughed hundreds of workers,” journalist Erin Griffith reports.
In Europe, too, startups across the continent announced plans to lay off and furlough workers, Sifted’s Amy Lewin reports.
Those cuts left thousands of IT professionals without work. Companies with budgets that understand the value of tech talent now face a once-in-a-generation recruiting opportunity. It’s too early to say just how much the COVID-19 pandemic impacted the supply of and demand for that tech talent, but the safe bet is to assume other companies will be recruiting heavily at the same time.
From the perspective of talent competition, the pre-COVID recruiting playbook still applies. Companies must still build strong employer brands and use their data to identify the best matches between available roles and available candidates.
Mercer recommends the following for positioning your employer brand to compete with big tech companies trying to reach this same candidate pool:
- Ask whether your employer brand stands for something that would compel candidates.
- Determine whether your internal and external brands are in alignment.
- Examine your own track record for promoting within, and let candidates know if that’s an organizational strength.
- Take stock of your company’s reputation for investing in employees and technology.
With the foundations of a strong employer brand in place, you can then turn to your data to find the best hires. As Paul Heltzel writes at CIO, human resources professionals have spent the last decade learning how to use AI to predict candidate success, eliminate human biases in the hiring process, and predict employee churn.
It’s time to apply that knowledge — and the technology that facilitates it — to identifying skills gaps on your IT team and recruiting the right people to fill those roles.
Nurturing Talent Should Be Seen as Driving Value
Josh Bersin, an HR analyst and member of Eightfold’s Advisory Board, has been chronicling the real-time changes the COVID-19 pandemic has had on global business, and his insights are worth highlighting in detail.
In February, before the reality of COVID-19 had caught up to everyone, Bersin was emphasizing how talent shortages had put the onus on organizations to create formal programs for training and upskilling workers. “This will keep them, attract them, and make them more productive at work,” Bersin wrote at the time. “My research shows that it can be six-times less expensive to ‘reskill’ than hire externally for many jobs.”
Three months later, mid-pandemic, Bersin noted that coronavirus had forced “an explosively fast business transformation” across the global economy. Who better than expert tech teams to lead these transformations? And in organizations that are still playing catchup to the new business realities that pandemic conditions have imposed, IT teams may need to be trained so their skills can align with organizational needs and objectives.
Skills gaps have become apparent in many companies during the pandemic, and those gaps will only grow wider for companies that are too slow to respond to the business transformations we are all witnessing.
As Ruth Ebeling, Peter Hildebrandt, Filippo Scognamiglio, and Benjamin Rehberg at BCG write, hastily outsourcing those capabilities to contract providers limits a company’s ability to seize the competitive advantages that expert tech people can provide. The mission should be to recruit and develop top talent in house.
Investing in the resources needed for talent development is the first step. The next step, then, is to create a culture of ongoing, self-driven learning by rewarding your tech employees’ curiosities. Jim Whitehurst, former CEO of Red Hat and recently named president of IBM, offers a road map for doing just that in a whitepaper written for HBR.
Here are Whitehurst’s tips for encouraging self-driven learning:
- Foster “a culture of curiosity.”
- Explain why change and growth are imminent needs.
- Give people clear learning goals that align with business objectives.
- Make employees accountable for those goals.
- Give employees all the resources, time, and support they need to achieve them.
- Treat mistakes as lessons learned, not infractions to be punished.
Give Experienced Tech Talent a Reason to Stay
Talented people want agency over their careers. They want to work with the best teams on the best projects, and they want the freedom to pursue those ambitions as they see fit.
Companies need to provide pathways for this kind of in-house growth. Vidisha Mehta at Mercer calls these “career frameworks,” and modeling people’s careers this way can be valuable to everyone involved.
“Responsive and effective frameworks allow employees the opportunity to architect their own journey and experiences,” Mehta writes. “On the other hand, managers have insight into their employees’ aspirations. Conversations can go beyond performance-based topics to identify what experiences and competencies employees need to mobilize and grow.
“At the macro level, career frameworks also provide organizations feedback and insights. They illustrate what the workforce currently looks like and spotlight what capabilities need to be developed.”
At a more granular level, the research from Jacobs, et al. at McKinsey reveals how valuable it can be to promote your top coders into superstar maker roles, and not people who are burdened with checking the work of other people.
“The demands of checking and correcting the work of novices and navigating bureaucratic hurdles imposed by managers — such as progress reviews, status updates, requisitions, and the like — leave top engineers little time for what they do best: writing code and problem-solving,” they write. “… For better productivity, better products, and lower costs, set your engineers free so they can work their craft.”
Finally, make sure there’s real buy-in when committing to this model of talent retention. That commitment includes ongoing investments in technology, training, and whatever other resources your IT team needs.
For companies that can afford to make that commitment, the ROI is there, says Sreeni Kutam, chief human resources officer at ADP. “Investing in employees’ career development can mean big payoffs for organizations. Employees who feel supported and empowered to pursue their career goals are more likely to stay where they can build their skill sets and potentially lead the organization in the future.
“Career development can indeed be the backbone of the company culture.”