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The new way of working is “work anywhere” models for two-thirds of US companies, according to a new study by Forrester. This is creating a shift in supply and demand in the tech job market and an “infrastructure of options where candidates can be placed,” the organization said.
Companies have been realizing that the job market for technologists is tight. “Tech jobs have some of the highest attrition rates and are some of the hardest jobs to fill,” Forster said. However, “the job market for tech workers is tight.
The main thing? “Companies that refuse to acknowledge this transfer of power to the employee bear a large share of the risk and receive little of the reward.”
Workers are leaving expensive cities.
The biggest sticking point for workers is the pandemic, which has fully demonstrated that people can get work done from anywhere. This has led to population declines in major tech hubs like San Francisco, New York City and Boston as people leave these cities for places where their dollars can expand, Forrester said.
Some of the top users are Texas, North Carolina and Florida because employees prioritize work/life balance and compensation over ownership and base pay, the organization said.
“The tech workforce landscape is constantly changing; various economic factors such as the cost of living, work from anywhere and metropolitan areas are contributing to the current workforce headwinds,” Forster said. They need to prioritize the employee experience to deliver and succeed post-pandemic.”
See: The Covid-19 Gender Gap: Why Women Quit and How to Get Back to Work (Free PDF) (Republic of Tech)
It’s a buyer’s market for technological labor.
With the large number of job postings, job seekers today have many options. At the same time, the number of vacancies is putting pressure on companies trying to strengthen their technological capabilities.
“Tech executives who continue to rely on traditional tech talent pools and pipelines will begin to see diminishing returns as the workforce embraces greater geographic mobility and career satisfaction,” said Forster. “It’s important for technology executives to look beyond their current job market to create new opportunities to address shortages and underemployment.”
Location is no longer a factor in determining salary
As the tech workforce becomes more fragmented, so do the recruiting strategies companies use to attract the same talent. This will put unprecedented wage pressure on domestic labor markets, Forrester said.
“Tech executives need to find new common ground with talent pools that align with budget realities and labor pools that reinforce those realities. Finding labor markets that meet spending goals is critical to mitigating the risk of wage inflation and acknowledging where those new labor markets are.”
Labor geography also has an impact on federal and state public policy
As technology workforce strategies continue to evolve post-pandemic, technology executives must consider public policy at both the federal and state levels. Economic development incentives are having a significant impact on the composition of talent migration, Forster said.
“Policies such as ‘Build a Better Regional Challenge’ are designed to encourage innovation and accelerate the development of the technology space in all sectors, taking into account the local technology and innovation infrastructure,” the organization said.
As an example, Forrester cited Iowa as a beneficiary of one of these policies, as the state received a multimillion-dollar grant to bolster its cybersecurity capabilities.
“Regulatory initiatives are good indicators of where the talent will be in the long term,” the company said.
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Change labor strategy strategies
Implementing the right labor strategy is the difference between success and failure in the short and long term, Forster said. As barriers to the labor market have been removed, technology executives must respond appropriately.
“Finding the right talent at the right price requires a distributed approach, just as it does anywhere. The ability to efficiently source talent from anywhere is now essential to IT labor strategies.”
The company has offered some methods to help technology executives and their companies cope.
Adaptation to target talent pools
Assess the composition of your technology workforce and prioritize roles based on where they work. Understand which roles are critical to working in-person, allowing for more flexibility with hybrid working and those who can be completely remote. Each role requires different work styles.
“The more remote a role is, the more flexibility the organization has in recruiting talent. The less remote the role, the less flexibility the organization has in recruiting talent. Understand where the staffing strategy makes a premium salary case for selected roles, and work your way down from there.”
Resist the urge to imitate big tech with deep pockets
Look at your employee experience as a point of difference for candidates when compensation isn’t enough.
As our research shows, EX is growing in importance to the workforce, and can sometimes be the deciding factor between the talent an organization gets and the talent it needs.
Also, “Focus on employee development and engagement initiatives, creating more opportunities to differentiate the organization from the competition so that they perceive the opportunity as a differentiator.”
Use technology as a great equalizer in the ever-increasing job market
Technology executives who embrace technologies that not only mitigate existing workforce risks, but also enhance their workforce strategies will have a significant advantage in the marketplace.
As an example, Forrester cites WalkMe and SkyHive.ai, which “can supplement existing workforces to increase productivity of an overall workforce strategy. Taking advantage of these new capabilities will require a simple readjustment of how talent is acquired and managed.
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