This article was first published by Oliver Wyman here.
It is estimated that at the end of 2021, the world had nearly 27 million skilled software developers, a figure that is expected to grow to 45 million by 2030. While that might seem like an impressive number, given global demand it is almost certain to be insufficient. Nearly every analyst report published on the state of the global technology labor market indicates that there is a shortage of technologists to hire against ever increasing demand. Compounding this challenge, many companies’ efforts around purposeful workforce planning and investment in reskilling, such as proactively identifying gaps or redeploying from within, have been limited.
Comprehensive digital transformation is a key strategic goal of many companies, with the objective of improving customer and employee experiences, creating new market opportunities, driving higher revenue, and reducing costs. Yet, the speed at which a company can achieve a digital transformation is limited by not having enough technical talent like software engineers, computer scientists, data scientists, architects, or front-end developers to achieve their digitization goals. As a result of these challenges, leading companies are acting with the goal of optimizing their existing tech talent within their organizations.
Increase the number of tech contributors
A quick look at the structures of leading technology companies shows that they are usually quite lean. A key metric that they monitor is their contributor ratio, calculated by comparing the number of “contributors” who document requirements, design user interfaces, and write code vs. “non-contributors” who support these activities — often management. An optimized product engineering function will often have a contributor to non-contributor ratio of 7:1 or better within its product-engineering function, yet it is not uncommon for a less well optimized company to have a ratio of 5:1 or worse.
Companies can improve the ratio through a range of actions, including rationalization of mid-level management, driving accountability and decision rights lower in the organization to eliminate layers, and moving toward the use of smaller, more focused teams with less overhead. Just measuring the ratio and making it transparent can start the process toward increasing the number of contributors.
Embed training into weekly activities
Technologists who have been working with the same technology for years often struggle to introduce innovation into their platforms and products and may feel left out as peers advance their technology skills and careers. This can result in them either disengaging or looking for a new job.
While many organizations offer employees the opportunity to attend training at a reimbursed cost, it is often the employee’s responsibility to find courses and complete them outside of working hours. As a result, training becomes an infrequent activity for most technologists — unless they feel a sense of insecurity with the direction their organization is headed or are looking to make a job change, and thus need to polish up their CV.
Leading companies instead are building training into their weekly schedule, making it part of the employee value proposition. For example, a major global bank has encouraged employees to spend between two and four hours each week during business hours to attend virtual training on the technologies that it wants its workforce to be more knowledgeable about, including in topics such as public cloud, agile delivery, machine learning, blockchain, and advanced data management.
By making training part of each technologist’s job, companies are reinforcing that they are willing to invest in their people, that they view their talent as future contributors to their aspired future state, and that they want everyone to translate newly learned capabilities into innovative ideas. The result is improvements in employee satisfaction, increased productivity, lower turnover, and increased grass-roots innovation.
Redefine the technologist
The definition of who is a “technologist” is becoming increasingly blurry in many companies. The proliferation of no-code tools that allow complex applications to be created. For example, business-aligned data scientists creating complex analytical solutions based on machine learning, and major public cloud vendors introducing managed services that obscure the complexity of deploying complex capabilities are recent trends that allow non-technology experts to achieve sophisticated outcomes with minimal support from the technologists in their organization.
One of the easiest ways to expand the pool of technologists is to enable those who are not formally part of the IT organization to automate their businesses and processes without requiring much direct involvement from those who write code. When supported as enterprise technology with appropriate risk management controls, these tools can remove a significant workload from your tech teams. This results in increased capacity in core technology teams to deploy on new problems and tackle more complex challenges. It also often results in more satisfied technologists as they get to work on harder problems while effectively breaking silos between the technology function and the overall business.
Adopt a product mindset to reduce friction
In many companies, technology is built in a way that does not fully meet business objectives. This can result from ineffective communication between technology teams and business leadership, misaligned objectives, incorrect assumptions as to how features should work, or lack of business expertise within technology teams. In some cases, lost productivity due to process and team friction can exceed 30% of the total technology capacity (and funding) allocated to the effort.
The advantages of adopting a product mindset and deploying a product development methodology based on agile techniques have become clear since the original agile manifesto was published in 2001. In addition to building better products, taking this approach improves alignment across multi-disciplinary teams, thereby reducing overall friction and improving the output from the process. More effective technology will be built faster, scarce technology capacity will be wasted less, business leaders will report that technology activities match priorities, and teams will feel more empowered.
Change the global talent equation
There is a global pool of leading-edge technologists spread across the world that can be found in many places that aren’t obvious. They include smaller university towns in the US, former manufacturing cities in the northern UK, and communities in Eastern Europe and Central and South America — and of course India, the home of one of the largest communities of technology professionals in the world. Yet many companies either have not implemented a global talent model or have created a two-class model in which employees working in major western cities get privileged opportunities to do the most interesting work while those elsewhere in the world do not.
Companies that want to optimize both their technology capacity and the cost of their IT organizations are seeking talent anywhere they can find it. They are also are doing so in a way that values every technologist against the same standards regardless of where they live, seeing the whole as much greater than the sum of the individual parts. Using global collaboration tools and asynchronous ways of working, teams composed of the best technologists are being mobilized to solve extremely complex business and technical problems at scale. The global pandemic has only reinforced the viability of this model as it reduced the ability for teams to co-locate, proving that amazing outcomes can still be achieved even if face to face means a video call.
Talent Optimization Toolkit
As organizations struggle with the new reality in which technologists are in such high demand that they can ask for and get nearly anything they request, leading organizations are realizing that it is more productive, and cost effective, to apply creativity in figuring out how to get more from the tech teams in your organization. As resource constraints to find new people to hire ebb and flow, it is essential that leaders have a talent optimization toolkit ready to use when needed.
