We all know hiring tech talent is hard, and recent tech sector layoffs have not changed this fact. Companies are faced with meeting very aggressive hiring goals — sourcing from a limited pool of candidates and competing against each other to attract and retain top talent. The key to success is in understanding evolving talent needs, broadening the candidate funnel, and optimizing experiences for all.
We recently surveyed over three hundred HR leaders, as well as more than one thousand tech employees to better discern today’s tech hiring challenges.
Despite recent industry layoffs, the tech skills gap continues to widen, making it even more important to understand the evolving needs of tech job seekers.
We found that 65% of tech applicants research all targeted companies before applying, while another 30% research at least some companies. In this environment, it is imperative for tech hiring leads to optimize their employee value proposition, as well as their hiring process.
86% of CIOs surveyed by Gartner in late 2022 said they faced increasing competition for hiring top tech talent, while 71% are concerned about talent attrition. Gartner expects this market intensity to continue through 2026.
In our recent survey of tech employees, we uncovered that a majority of them had found their current positions through proactive self-driven research and application processes. Our study also shows that those who find jobs on their own stay longer in their companies than those who were recruited.
However, when working conditions are not optimal, tech workers don’t hesitate to look elsewhere.
Optimizing the work environment is key to retention, but one can say that retention is also a key contributor to healthy and productive working conditions. When companies are unable to fill open positions, current employees can be expected to fill in the gaps, which creates tension and can lead to further employee turnover.
In our 2016 survey of over one thousand tech hiring managers and recruiters, we sought to better understand how the tech talent shortage was impacting their businesses. Over a third of those respondents (36%) said the lack of timely hiring caused burnout in existing employees and affected their capacity to innovate.
And we can see in 2023 this situation has had specific impacts on the field of HR. According to a 2022 survey by Workvivo, an employee experience app, 97% of HR professionals had felt emotional fatigue in the previous year, while 98% indicated they had felt burned out within the previous six months. And, of registrants at a recent Indeed Leadership Connect Recharge event in 2023, nearly 65% thought that global talent shortages will worsen in the next decade.
Tech talent hiring challenges are hurting innovation
In 2016, employers reported that the inability to timely hire tech talent was impacting their organizations’ ability to innovate.
Our 2022 survey helps to understand how to effectively respond to this continuing challenge.
Tech workers are looking for more company transparency about job roles, benefits, development paths, remote work options, and company culture.
Our research suggests that job seekers tend to avoid applying for positions when they don’t find immediate answers to their questions. It is critical for employers to provide thorough information in job ads and throughout their Web presence.
Hybrid work arrangements are also very important to tech talent. Our research shows that only about one-quarter of tech candidates are looking for fully in-person roles.
Positions that are primarily remote, however, can sometimes be associated with increased employee turnover, at least for certain employee categories. According to the study, hybrid workers going into the office 3-4 days a week are more likely to stay at their company for their next role than those in-office 1-2 days a week (71% for the former vs. 51% for the latter).
On the other hand, certain employee categories can particularly appreciate remote work positions.
Another area of opportunity is in expanding your talent pool.
Our research shows that there are millions of job seekers who can be somewhat “invisible” because of barriers in hiring, which include unconscious bias, high formal education requirements, and job postings with off-putting language.
We have found that less than half of the companies we studied had diversity hiring initiatives. However, even those with such programs weren’t necessarily getting any traction. For example, while Diversity, Equity and Inclusion (DEI) initiatives often target women, employers with such programs aren’t hiring women tech employees at a higher rate than those without them.
Whether or not your company has a formal diversity initiative, Indeed’s research shows that there are straight-forward actions that can be put in place to help improve diversity outreach and increase talent pools:
- Use a skills-and-experience based approach to hiring, while reconsidering requiring specific degrees or levels of training.
- Use gender-neutral job language in job postings.
- Enact fair-chance hiring to reduce discrimination against job seekers with past criminal records.
- Customize benefits to meet the needs of different target groups (e.g., women are more easily enticed by remote jobs than are men).
Fair-chance hiring means considering all qualified candidates regardless of past criminal records. It gives employers an opportunity to find tech talent from a previously untapped hiring pool. In our research, we found that for those in this category who had been rejected from a role, 20% of the time it was because of background requirements.
However, contrary to common misconceptions, the SHRM’s 2021 Getting Talent Back to Work Report states that individuals with criminal records perform as well as or better than other employees according to 85% of HR professionals interviewed. A separate study on call center job performance indicates that fair-chance hires tend to stay longer in their companies than other employees.
Recruit for work experience and skill, not just education
In 2016, we asked hiring managers “How important is an Ivy League degree when evaluating technical talent?” Nearly a quarter (24%) of respondents considered an Ivy League degree as being very important when evaluating technical talent.
At the same time, in this same 2016 survey, recruiters told us they didn’t have the training to simply identify or recruit a qualified tech prospect with over half (53%) of respondents stating they have hired tech talent who did not meet the job description requirements out of immediate need.
One method of bypassing these HR challenges is to promote employee development, which is an essential tool for tech talent hiring and retention. According to the University of Phoenix’s 2023 Career Optimism Index, 70% of employees say that they would be more inclined to stay with their company throughout their career if they had more upskilling opportunities. In the tech sector, employees that have access to upskilling at their current company are 65% more likely to say their next job will be at their current company."
Establishing a solid employee development program increases productivity, encourages referrals, and improves hiring rates. For non-tech companies, it can be even more important to show tech candidates potential roadmaps for their career within the organization.
Optimizing the candidate experience also means working with highly skilled tech recruiters who know your business’ tech roles (must-have vs. nice-to-have skills), as well as team structure and philosophy. They need to be prepared to answer candidates’ tough questions.
Equip recruiters with tools to more effectively attract tech talent
Wellbeing is a key differentiator for recruitment and retention across industries, but it is especially so for the tech sector where significant efforts to improve wellbeing have already been made. For example, 42% of tech industry employees have unlimited paid time off (PTO) compared to 13% of tech workers in the banking industry and 9% in aviation and defense. In addition, employees in tech companies tend to work fewer hours than tech workers in other fields.
For tech workers, employer support is central to work wellbeing. The following factors of support have a significant impact on retention:
- A defined progression plan
- Upskilling or training options
- An empowering manager
- A mentoring program
The importance of wellbeing can also be seen when it is lacking. Close to 40% of job seekers surveyed indicated each of the following as motivating reasons for employees changing companies:
- Lack of work-life balance
- High levels of stress
- Desire to work fully remotely
- Not enough flexibility in hours
In addition to retention, there are numerous other business benefits to focusing on wellbeing. An Indeed sponsored report from Harvard Business Review’s Analytics Services found that companies link employee happiness with competitive advantage. Additionally, in an Oxford report based on 15 million Indeed surveys on the subject, researchers found statistically significant correlations between wellbeing and company valuation.
Despite the numerous advantages of cultivating wellbeing for both tech talent and their employers, many organizations are doing very little. According to the Oxford report, wellbeing is a strategic priority for only 19% of companies studied.
A separate Forrester survey conducted for Indeed indicates that only 27% of respondents experienced high levels of wellbeing at work. This same report indicates that younger generations experience significantly lower levels of wellbeing and adds that they hold their organizations responsible.
- showcase your commitment to wellbeing,
- gain actionable wellbeing insights, and
- make meaningful changes to support better work for all.
Indeed conducted a national U.S. survey with Censuswide of 1009 employers involved in HR and including hiring managers and tech recruiters. Responses were gathered from October 27 to November 1, 2016.
Between October 31 and November 18, 2022, Indeed partnered with SKIM to conduct an online quantitative survey with 316 HR leaders across multiple industries involved in hiring & retaining tech talent for enterprise-sized companies (1,000+ employees).
Additionally, from March 14 to April 5, 2023, Indeed conducted an online quantitative survey of 1,059 U.S. workers aged 18-65 who currently work in a tech role such as software engineer/ developer, tech support or data/IT analyst, or have been laid off from such a role in the past year.