By: Paul Heltzel
We’re seeing a number of shifts this year in hiring as technologies mature, new ones emerge and companies work to cut costs by blending full-time IT staff with contract work.
While some see the gig economy as a flexible new way to work, one that appeals to solo entrepreneurs, others see a general consequence of the Great Recession. Either way, the gig economy is experiencing growing pains. And growing it is: 40 percent of the workforce is expected to be part of it by 2020, according to a report by Intuit.
One thing hasn’t changed this year: Recruiting top talent is still difficult for most firms, and demand greatly outstrips supply. That’s influencing many of the areas we looked at, including compensation and retention.
Whether you’re looking to expand your team or job searching yourself, read on to see which IT hiring practices are trending and which ones are falling out of favor.
Hot: Workplace flexibility
Even for companies that want their staff based at HQ full time, workplace flexibility is on the rise, according to a number of experts and studies that weigh in on what job candidates want.
“Being able to work from home — from a coffee shop, or carving out a day or two as part of a longer vacation — is increasing,” says Jeb Ory, CEO of Washington, D.C.-based Phone2Action. “Technology mobility is here to stay, and companies need a combination of in-office workplaces and flexible remote work options.”
In the tech industry, remote work is essentially an expectation in 2017, says Lynette Estrada, director of global talent acquisition at Nutanix.
“We’ve seen workplace flexibility become a major trend for the tech industry, both in IT and across all job functions,” Estrada says. At her own company, “employees are encouraged to talk to their managers about flexible time, including working at home during the week or leaving early on occasion for external commitments,” Estrada says. The aim is to achieve greater work-life balance, she says — which can help with retention and stems burnout.
Cold: Full-time remote work
While workplace flexibility — including working at satellite offices — are on the rise, fully remote work situations aren’t nearly as common. IBM, Yahoo, Reddit and HP are some of the notable examples of companies that pulled workers back to the office — unless certain workers had a specific need to work remotely full time.
“When it comes to IT hiring, we’re seeing a trend toward building teams of 100 percent on-site, full-time employees,” says Ory. “Software companies are focusing on building out teams to address the varied technical and product needs they have — and a key element to a high-performing team is building trust, which comes most easily from working together, in close proximity, day in, day out.”
Obviously office-based work isn’t a one-size-fits-all solution. Some companies report increased productivity using a fully distributed staff. And turnover, one-off projects, and some specialized, short-term needs will continue to require contractors — some on site but often working remotely — to quickly adopt the best available talent.
“There needs to be a balance,” says Colin Doherty, CEO of Fuze, which makes audio and video cloud-based communication collaboration tools. “In the traditional office environment, leaders had physical evidence of who was engaged and disengaged based on who showed up when, observing what was on people’s screens, and other visual cues,” he says. “The real challenge for companies is less about whether or not employees need to be in the office and more about how you can foster engagement regardless of where they get work done.”
Hot: Blended workforces/flexible staffing
Blended IT groups offer a standard baseline of full-time staff, with the option to add — or dial back — contractors as needed.
According to CompTIA’s 2017 Cyberstates report, teams of full-time IT staff and contractors or temporary workers could undergo a digital transformation in the near future. “New elements are poised to reshape the concept of the blended workforce,” the report says. “Beyond the blending of different types of workers through ‘gig’ platforms, blending may increasingly involve the use of artificial intelligence, bots, virtual assistants, and other types of knowledge-based systems.”
Ed Szofer, CEO of outsourcing software provider SenecaGlobal, says he’s seeing more hybrid models, including a mix of offshoring with IT teams. “This addresses the shortage in technical skills, and provides those companies with a stable and flexible source of world-class technologists.”
Cold: Gig economy hype
Employers and job seekers both report a robust market for contract work. Part of what’s changing, however, appears to be the idea of gig work as a sustainable model. In short, the gig economy is going through an awkward phase.
“The gig economy continues to disrupt the notion of traditional business models and the industry as a whole,” says Daisy Hernandez, global VP of product management at SAP. “More established, larger companies are taking notice as they examine ways to take some of the benefits of the gig economy and experiment or evaluate how to incorporate to new areas of their businesses. However, there are some sobering realities of the challenges and downsides of the gig economy that are also surfacing.”
For all the benefits in ease of hiring, speed and scale, Hernandez also notes drawbacks, like the lack of benefits and career growth, and some less-obvious problems.
“Companies built on the gig economy model also have to deal with the constant revolving door of contractors challenging them with the continual onboarding of new contractors, scheduling logistics, and inconsistency in either availability or quality,” she says. “The jury is still out around the initial hype of whether the gig economy will take over or be applied to all kinds of industries, roles, and jobs.”
Hot: Soft skills
While candidates’ tech chops are assumed in IT, soft skills are even more in demand, according executives, analysts and recruiters.
Soft skills are “the most significant trend in recruiting,” says SenecaGlobal’s Szofer. “Computer science grads and those with certifications — these types of skills are indeed required. However, you must be able to communicate clearly, listen carefully, and be a strong team player — that’s what astute companies are now recruiting for.”
John Pollak, VP of people and talent at Keeper Security, has some advice for hiring managers: “Screen for character and skill,” he says. “It’s especially true at startups where every hire has immense impact. We help people build skills. Character and attitude are difficult to change.”
Cold: Perks you don’t actually want
Because firms are having trouble recruiting and keeping top talent, some throw gimmicky perks to sweeten their job offerings. But it may not help.
“In hot tech markets like Seattle and the Bay Area, the pain is particularly acute so companies are falling victim to short-term thinking,” says Manny Medina, CEO of Seattle-based Outreach, and a former Amazon and Microsoft executive. “They compete by offering crazy packages to attract star players but it’s fraught with peril in the long term. You run into all kinds of issues around leveling and over time it leads to discontent on the team.”
What employees want, noted a number of experts interviewed for this article, is a sense of meaning at work — rather than institutionalized “fun.”
“HR needs to focus on communicating purpose, not just offering perks,” says Keeper Security’s Pollak. “Eighty percent of employees are not in their dream job. So that means, the last 5-10 years of throwing ping pong tables and dry cleaning at employees hasn’t worked.”
Hot: Security jobs
Despite headline-grabbing security attacks, many companies are still woefully unprepared. Still, there are far more openings than security experts.
“We’re definitely seeing more full-time in-house security folks and many as members of the executive team,” says Medina. “Security is a top concern for all companies. Unfortunately, there’s a real scarcity of security folks, so finding one is a challenge.”
TEKsystems’ JasonHayman says this year he’s seeing increased demand for developers who know Python, Ruby and Java — coupled with credentials in information security.
“Testing new applications in real time and being able to integrate security testing into the process speeds up time to market,” Haymansays, “helping organizations who are seeing faster growth react and scale with demand.”
Cold: Actual job security
According to Payscale’s survey of tech industry salaries, some of the best-known tech companies have some of the shortest tenure, including Facebook, Uber and Amazon — all less than 2 years.
That said, they may also be some of the most aggressive in hiring, Payscale notes, which lends itself to job jumping, for better pay and opportunities, rather than attrition.
But across all industries job tenure is down slightly, from 4.6 years to 4.2 years in 2017, says Dan Schawbel, research director of WorkplaceTrends, an HR-focused research firm. “On average, if you start a job, you’ll last there for four years,” Schawbel says. “Which is not very long. Twenty-two percent of employees are planning to change jobs this year.”
In employee surveys, job candidates report that one of the most desirable job benefits is the ability to pursue professional development on company time.
A report by the Execu Search Group shows more than half of the respondents considered the chance for professional development as their No. 1 reason to accept a job. Nearly 60 percent said “access to projects to help keep their skills up-to-date” would help retain employees at their current jobs.
“Employees want to feel the company is investing in them now, but they also want to feel the company is investing in their future,” says Sarah Lahav, CEO of IT service management software maker SysAid. “Offering continuing education or professional courses are very important as they stay with the employee even if the employee leaves the company.”
Cold: Hiring from outside of the company
Positions in security and data science are increasingly difficult to fill, and despite demand the skills gap isn’t going away soon.
According to PricewaterhouseCoopers, “for analytics-enabled roles, employers typically require three to five years of job experience and a college degree. But the pool of people with the education, interest, and experience can be tight relative to demand, so it’s good to think of several strategies that could get you the talent you want. “
Research firm Gartner recommends using competitions like hackathons to uncover talent, and developing versatility in existing hires.
“Versatilists are the equivalent of multifaceted actors in a theatrical repertory company, according to advice from a Gartner report. “They play different roles in multiple productions at once, bringing superior performance to each production regardless of whether they play lead, supporting or backstage roles.”
Hot: Importing talent from Silicon Valley
What the Show is to baseball, Silicon Valley is to IT. But recent trends suggest innovation and tech hubs sprouting around the country are giving the Bay Area a run for its money.
“After adjusting for cost of living in San Francisco, cities like Austin, Melbourne, Seattle, and Toronto are increasingly attractive spots for tech workers to grow their careers,” according to Hired.com’s 2017 State of Global Tech Salaries. “In Austin, the average salary for a software engineer on Hired is $110K. But this is the equivalent to making $198K in San Francisco when you consider the cost of living difference between the two cities.”
Not only does money go farther in places like Austin, tech companies there are more willing to bring in out-of-town candidates than California firms. “Austin-based companies are especially willing to relocate the right talent, with more than 60 percent of job offers going to candidates living outside the Lone Star State. In comparison, only 30 percent of offers from SF Bay Area companies are given to non-local candidates.”
Cold: Finding top talent
Across the country, tech firms — and other industries that rely on IT talent — say they can’t find qualified candidates to quickly fill their needs.
“When in-demand candidates do enter the hiring market, they are often snapped up at lightning speed,” reports the Robert Half 2017 Technology Salary Guide. “The IT professionals they want to recruit may already be interviewing with several other companies — or considering multiple offers.”
“There’s a war for talent,” says WorkplaceTrends’ Schawbel, which factors into rising salaries and companies’ trouble retaining employees. “Those things go together. That’s why salaries are increasing. The talent gap is increasing. Sixty percent of businesses are unable to find skilled candidates.”
Hot: AI-based recruiting
Ask any job seeker and they’ll tell you that it’s easier than ever to apply for multiple positions. With a click (or a tap) your resume and work samples are sent off. But hiring managers and recruiters say they’re swamped with applications and recruiters find the data difficult to differentiate.
“There’s been a definite increase in the number of contingency-based hiring services, as well as an explosion of online services that cross-post job opportunities,” says Ory. “We see many more resumes now and the onus has shifted to the employer to properly vet candidates based on the actual requirements for a job.”
Recruiters are now looking to employ searches that can put candidates in context, applying algorithms and machine learning to help find the right person for the job. Artificial intelligence can help replicate successful placements — or bypass candidates that aren’t a good fit for certain positions, based on previous placements.
In addition to honing in on good candidates, an AI recruiter, for example FirstJob’s Mya, can use natural language understanding to answer candidate questions, provide updates to candidates, and even schedule interviews.
Cold: Slow, outdated hiring experience
Staffing firm Robert Half reports that the thing candidates find most frustrating about job searching — reported by 57 percent of respondents — is the long, post-interview wait to hear if they got the job. If they haven’t heard back after two weeks, about 70 percent of respondents said they lose interest in the position.
Hiring managers feel the pain as well, according to the report. A staff-level IT role takes about 4 and a half weeks to fill and more than 40 percent of tech leaders say that’s too long.
And it’s not just the long radio silence — if they hear back at all — that job candidates find daunting.
“Job seekers reported being exposed to skills testing and assessments in their candidate experience more than any other recruiting technology, but it is also the technology they would least like to see the in the future,” according to WorkplaceTrends’ Future of Recruiting Study.
The upside? About 70 percent of employers plan to invest more in their candidate experience, the study says.
Hot: Increased compensation for talent
Compensation across the board for workers is expected to go up about 3 percent this year, and a bit more than that in 2018, according to the Society for Human Resource Management.
Despite salaries going up, most people are open to new opportunities. About 75 percent of developers are keeping an eye out for their next job, according to Stack Overflow. As IT hiring managers find it hard to fill positions, salaries rise to meet demand.
“The biggest challenge for companies right now from a talent perspective is retention,” says Schawbel. “It gets harder to get people to stay, so you have to have a more competitive salary — and then benefits packages also become more important.”
Cold: Diversity in the workplace
In terms of job opportunities, it’s probably no surprise that Millennials have the edge. Those between 25-30 years old get the most job offers, reports Hired’s 2017 State of Global Tech Salaries. After the age of 45, the average salary and number of job offers decline. After 50, most IT pros see a significant decline in salary in line with their experience.
And what about gender and racial diversity?
Women make up less than a third of the tech workforce, according to the National Center for Women & Information Technology. As for the C suite, only about 20 percent of CIO positions are held by women, as of 2016.
Here’s a snapshot of racial diversity in IT: The most recent U.S. census report on jobs in IT shows just 7 percent of IT workers are African-American compared to 11 percent of the entire workforce.
Hispanic workers were about 7 percent of the IT workforce, despite being 16 percent of the workforce overall. Asian IT workers fare better, about 18 percent, compared to 6 percent of the working population. And about 70 percent of IT workers are white (76 percent of all workers).
“Gender diversity, ethnic diversity and the generational clash are big topics right now in Silicon Valley,” says Schawbel. “We still see a lack of diversity even though the evidence shows that a more diverse workforce creates more productivity and creativity. Companies are extremely slow to change. There’s no published evidence they’re doing much about it.”