Welcome to the age of six-figure bonuses and remote work arrangements — for technology employees. The gap between the demand for technology skills and lack of supply is putting pressure on companies to raise wages and retrain existing workers for jobs.
The median annual technology wage is $82,000 per year, about double the national median wage, according to industry association CompTIA. Although job growth slowed in September 2019, tech sector hiring increased by nearly 100,000 jobs through the first three quarters of 2019, the group said.
Top technology job openings were for software and application developers, followed by IT user support specialists, systems engineers and architects, systems analysts and web developers, the group found.
The Wall Street Journal reports that “sought-after IT workers, such as developers and engineers with experience in AI, who take new jobs this year are fetching average annual salaries of $200,000, up from $150,000 a year ago,” citing a staffing firm.
People in high demand can afford to make themselves hard to get. Global consulting and staffing firm Robert Half surveyed of more than 2,800 senior managers in the U.S. and found that generating interest from qualified candidates is the most difficult aspect of the hiring process. The firm suggests offering higher salaries and perks such as sign-on bonuses or telecommuting. Companies can speed up the hiring process and focus on the skills the company really needs. The firm also suggests training employees and ensuring companies have a back-up plan in the meantime.
“Here’s an essential truth about the hiring market that surprises many employers: Your ideal candidate may not exist,” writes Paul McDonald of Robert Half.
Meeting the company’s needs for talent is hard to do, and relying on a strategy of luring talent from other companies may not be enough. Employers are starting to reduce qualifications or look for nontraditional workers, including starting an apprenticeship program or getting rid of a requirement for an advanced degree, according to senior data scientist at the website Glassdoor, Daniel Zhao.
Many companies are turning to retraining plans, especially as new artificial intelligence and machine learning programs become a bigger part of the workplace. Amazon.com, for example, plans to spend $700 million over about six years to retrain a third of its U.S. workforce. This amounts to $7,000 per worker or about $1,200 per year through 2025.
The good news is that the U.S. could be poised to experience a surge of data scientists graduating from college, but probably will continue to hurt for technology professionals with experience, according to the consulting firm Bain & Co.
The most creative companies going forward may be the ones that are most successful in dealing with the shortage of tech talent.