With more and more companies competing for the increasingly rare resource that is digital talents, we want to take a look at what drives talent scarcity in this space and how you can react. Why is it so hard to find the right people? How can they be retained once they have been hired? And what can you do to better understand the market and your company’s position within it?
Hardly anyone is surprised by the fact that top digital talents are comparatively rare and highly sought-after, not only by tech organisations but across all industries. After all, it seems like every company is recruiting them now. But what does this mean in practical terms?
In our study “A Deep Dive into Shallow Talent Pools” that was carried out alongside Mercer | Comptryx, a groundbreaking global pay and metrics solution for technology companies, we made a number of interesting observations that illustrate the challenge at hand for companies looking to recruit top talent with this background. For one, we see that the voluntary turnover rates are up to twice as high for some of the most critical roles compared with the general workforce. Also, the average employee tenure is shorter by a number of years. Both findings indicate that digital talents find it easy to move on to new challenges and are quite willing to do so.
When it comes to recruiting for digital roles, the vast majority (83%) of companies surveyed in Mercer’s European Talent Availability study agree that the competition in the labor market has increased in the past 12 months. 88% agree that it will increase further in the next year. It is not surprising, then, that globally and across Western Europe, almost all industries consider talent availability as the primary factor driving their decisions on job location, ahead of labour cost (World Economic Forum “The Future of Jobs Report” 2018).
The demand for digital talent is definitely growing. Our data shows a continued rise in job postings in London, from 918 postings for data scientists in April 2017 to 2,275 postings in March 2018. As a result of the high demand and strong competition, more and more companies are forced to recruit new hires from other countries to fill the gaps.
Finding and recruiting digital talents is hard – but retaining them as key people within your organization can be just as difficult. We know from surveys such as our Global Talent Trends report and our client work through Mercer’s employee engagement practice (Sirota) that employees will only fully thrive – and subsequently develop loyalty towards their employer– when they are fully engaged. This engagement can be achieved through a variety of means, such as offering tailored reward packages that include benefits like learning and development opportunities, the ability (and time allowance) for employees to complete voluntary and humanitarian work etc. What is consistently seen as being a key driver of employee engagement, however, is purpose – demonstrating, as a company, that it is not only about the numbers, but about aspiring towards a greater good.
These observations hold true for employees across the board, but they become even more prevalent when the employees concerned are as highly in demand and happy to switch jobs as digital talents. As an organization, you simply cannot afford to not engage these employees.
We believe companies that incorporate data analytics into their talent-acquisition strategies have a considerable advantage. Given the observations made above, it is paramount to understand both the internal realities as well as the external challenges of finding and retaining key people.
While employee engagement surveys and supporting measures are well established and have been used by companies for years, objectively assessing internal and external labour pools in terms of the talent needed for the digital age can seem a lot trickier.
Talent availability differs significantly by location – no surprise there. However, it might be a bit surprising that bigger doesn’t automatically mean better. Our study found, for example, that twice as many cloud engineers are available in Berlin compared to London, despite London being bigger and having the larger economy.
In addition to availability, the openness of a city to foreign talent is very important: More than a third of the companies we surveyed reported that at least a quarter of their talent is sourced from overseas. Again, the location can have an impact on a company’s ability to attract the right talents. London, for example, scored comparatively low when it comes to international openness. One reason for this is the Brexit referendum and what happened after in both politics and the media. It is just one of the things companies need to have in mind when defining their talent strategy.
Lastly, using data can also support an organization’s efforts in upskilling their existing talent. Understanding the typical educational and experience profile of a data scientist, cyber or cloud engineer will provide valuable insights that can help identify and assess the internally available talent and map plausible upskilling paths. For example, we found that 43% of data scientists in London had studied physics, while 26% of cyber-security professionals had studied something other than the usual suspects science, technology, maths or engineering (STEM). Findings like these can assist companies in identifying whom within their current workforce could be more easily upskilled to fill the roles most needed for the future.
Understanding the challenges around recruiting digital talent, being aware of how they can be retained, and using data to drive strategic decisions can help companies come out on top of the race for the best talent. Mercer is uniquely positioned to support organisations in understanding their current situation and define what needs to be done regarding the workforce for the future: