Originally published on Dallas Innovates.
Amid a booming tech surge, U.S. companies grapple with a pressing issue: a tight pool of tech talents. Even an innovation powerhouse like Dallas-Fort Worth can’t escape the crunch. Here’s how companies can navigate to ensure continued growth.
Driven by advancements in technology and digital transformation, the tech industry is experiencing unprecedented growth. However, this growth is accompanied by a significant challenge that nearly 90% of employers are facing—a shortage of tech talent in the US.
Unpacking the Data of the US Tech Talent Shortage
In 2019, there was a 0.1% increase in tech job growth. Only four years later, that number has jumped to 2%. Businesses everywhere are in need of digital expertise, but there aren’t enough experts to go around. Gartner predicts the US will lack 1.8 million tech pros by 2025 due to:
- The rapid expansion of the tech industry.
- The increasing complexity of tech jobs.
- The impending retirement of the baby boomer generation.
North Texas is no exception. This region is home to a thriving tech scene and has become an innovation hub, with companies from all industries embracing technology to stay competitive. As a result, the demand for tech professionals in the area is skyrocketing.
“The tech talent shortage is having a significant impact on businesses in North Texas,” said Nicolas Baca-Storni, Vice President of Commercial and Corporate Development at Inclusion Cloud, a Dallas-based tech services company. “Companies are struggling to find the skilled tech workers they need to grow, innovate, and compete.”
Factors Driving the Tech Talent Shortage
As businesses across the country struggle to find qualified candidates to fill their open positions, they’re seeing:
- Delays in product development.
- Increased operational costs.
- Loss of valuable contracts.
The high demand for skilled tech professionals far exceeds the available supply, leading to intense competition among businesses seeking to secure top talent.
Additionally, the pace of technological advancements and the emergence of new technologies creates a constant need for specialized skills, further exacerbating the shortage.
Economic implications of the tech talent deficit
The IT sector fosters innovation and economic progress. But further advancements are limited by the lack of skilled IT employees, slowing economic growth. The inability to fill critical tech positions curbs the pace of product development, stifles innovation, and hinders businesses’ ability to seize growth opportunities.
The talent deficit also negatively affects the US’s global competitiveness, as businesses face difficulties attracting and retaining top talent in an increasingly interconnected world.
A report by Cloud Academy predicts a talent deficit of 600,000 in the US’s financial and business sectors by 2030, leading to higher recruitment costs.
Additionally, the IMF warns of a potential shortage of over 85 million tech workers globally by then, affecting the worldwide economy.
The scope of the shortage: From entry-level to high-level roles
The tech talent shortage is a growing challenge for businesses of all sizes. It not only affects high-level positions but also mid- and entry-level roles. For example, the demand for talent in the following technologies is outpacing the supply:
- Salesforce: The demand for Salesforce talent is growing as more and more businesses adopt the CRM platform.
- Data science: The demand for data scientists is increasing rapidly as businesses understand the importance of collecting and analyzing data.
- Cybersecurity: The demand for cybersecurity professionals is booming as businesses become more aware of the frequency of cyberattacks.
Dallas: A Rising Star in the Tech Industry
“Dallas is emerging as one of the top 10 tech centers in America,” said Mark Muro, a senior fellow at the Brookings Institution and co-author of a report revealing the devastating impact of the pandemic on tech jobs.
As a thriving tech hub, Dallas has witnessed remarkable growth and transformation, positioning itself as a prominent player in the tech industry. The city has become an attractive destination for innovation and development. Numerous tech companies and startups have established their operations and headquarters there, including:
- Texas Instruments
- Southwest Airlines
- Capital One
Dallas offers a vibrant startup ecosystem, a robust infrastructure, favorable business policies, and access to a diverse pool of tech talent, making it an appealing choice for both established companies and emerging startups.
Economic growth in DFW
DFW’s economy grew by 5.5% in the first quarter of 2023. The region is poised for continued growth in the coming months and years. Additionally, this year:
- Job growth was strong, with 116,000 new jobs added in the first quarter.
- The unemployment rate fell to 2.9%, the lowest level since 1998.
- DFW is becoming increasingly attractive to businesses around the world.
Addressing the Gap to Continue Growth
To maintain its upward trajectory in the tech industry, Dallas must confront the tech talent shortage head-on.
The city’s remarkable growth in tech sectors, ranging from artificial intelligence to cybersecurity, highlights the increasing demand for skilled professionals. Bridging this talent gap is crucial to sustaining the city’s momentum in driving tech innovation, economic prosperity, and job creation.
Filling Vacancies and Building a Diverse Workforce
Software development outsourcing and tech value networks can help tech companies overcome the talent gap by providing access to a pool of skilled workers from around the world. Two main modalities are available:
- Staff augmentation: Hiring a third-party company for specific skills on demand.
- Dedicated teams: Engaging a third-party company for a project-focused team.
Choosing the right modality depends on the company’s needs. Staff augmentation is best for rapid role fulfillment, while dedicated teams excel in project-focused development. These strategies offer multiple advantages, including:
- Access to a global talent pool.
- Cost savings compared to in-house hiring.
- Flexible team scaling.
- Enhanced focus on core business functions.
This can help companies fill critical roles quickly and efficiently, in addition to reducing costs associated with hiring and retaining in-house talent.
Tech Value Networks
As companies strive to undergo digital transformation, they are realizing that the traditional value chain approach is no longer sufficient. In this dynamic IT environment, adaptive and distributed supplier ecosystems are becoming the new norm.
Essentially, Tech Value Networks involve building a portfolio of pre-vetted partners and suppliers that can be accessed on demand.
To maintain a competitive edge, businesses are increasingly recognizing the importance of going deep in technical areas. However, this poses a significant challenge for IT leaders as their current skills sourcing strategies struggle to keep up with demand.
To address this issue, many IT leaders are turning to software development outsourcing as a solution. This approach allows them to find specific skilled programming teams that are in short supply. Outsourcing has emerged as a proactive solution to meet the growing need for specialized talent, enabling businesses to stay ahead in the tech landscape.
Turning Challenges into Opportunities: Outsourcing as a Solution
Amidst the tech talent shortage, outsourcing emerges as a viable and effective strategy to address the growing demand for tech professionals.
Dallas-based companies, like Inclusion Cloud, offer an innovative solution. They connect businesses with a diverse and highly skilled global network of tech experts. This approach enables companies to fill their tech vacancies quickly, without compromising quality or efficiency.
“Inclusion Cloud helps companies find the tech experts they need to stay competitive – quickly and affordably,” Storni said.
With its strong presence in Dallas and extensive industry knowledge, Inclusion Cloud provides tailored solutions to meet the precise tech workforce needs of North Texas businesses. The company specializes in bridging the tech talent gap with its global talent pool.
The tech talent shortage presents opportunities as well as difficulties for many businesses. Dallas is leading the industry’s expansion because of its impressive growth and robust IT ecosystem. By embracing innovative approaches, such as outsourcing and leveraging global talent networks, businesses can overcome the talent shortage and ensure continued growth and success.
Fueling a vibrant tech landscape requires cultivating a diverse and highly skilled workforce, fostering strategic alliances, and championing educational initiatives. These transformative steps will help propel North Texas and other tech hubs toward a thriving, inclusive, and resilient future.
“North Texas has a lot to offer to tech companies,” Storni said. “We have a strong economy, a talented workforce, and a supportive business climate. I’m confident that we can overcome the tech talent shortage and continue to grow as an innovation hub.”