The World Is Heading Towards a Severe Talent Shortage

The World Is Heading Towards a Severe Talent Shortage

The unprecedented need for companies to innovate and digitalize faster has made talent a top priority. Studies show that 69% of employers find it difficult to fill job vacancies, with an increased demand in technology and logistics segments. In addition, 76% of the tech talent supply does not possess the required skill sets to fulfill tech job roles.

With the ongoing talent wars, organizations have been scrambling to manage what could be labeled the 'Great Resignation' as well as find the right talent. This is evidenced by the ever-widening gap between talent demand and woefully inadequate supply.

A case in point is the global artificial intelligence (AI)/machine learning (ML) talent gap that companies are grappling with as they adopt platforms and data-driven models. Global management and strategy consulting firm Zinnov's analysis shows that while the global AI/ML talent gap stands at a massive 1.2 million approximately, there are only about 650,000 AI and big data/analytics professionals who are directly employable in these roles.

To bridge this gap, companies will need to explore newer talent strategies, including leveraging global talent hotspots. Zinnov's study titled "Centers of Excellence (COE) Hotspots of the World" is a comprehensive look at the top global destinations with under-tapped talent pools. It explores the factors that make these locations conducive to setting up full software engineering teams and how globalization is a critical lever in winning talent wars.

COE hotspots around the world

An amalgamation of extensive primary and secondary research, the Zinnov study covers 13 countries from across Asia Pacific (APAC), North America, Latin America (LATAM), and Eastern European regions, evaluated across four key dimensions of talent availability, software engineering ecosystem maturity, ease of doing business, and cost analysis. The countries evaluated include India, China, the Philippines, Canada, Brazil, Mexico, Lithuania, Estonia, Poland, Bulgaria, Belarus, Romania, and Czech Republic using data from the US as the baseline.

Building scalable COEs with the capacity to house complete software engineering teams requires organizations to identify the best-fit location. Although all 13 countries evaluated exhibit high potential for setting up software engineering teams, they show different degrees of potential in terms scalability of teams, availability of diverse talent to build complete software engineering teams, affordability, and ecosystem maturity. The maturity of these ecosystems is reflected in the presence of academic institutions to build talent pipelines, service provider companies to leverage local partnerships, startups, and ease of doing business in terms of languages spoken, government regulations, geopolitical stability, IP, and data privacy.

Globalization – A talent game-changer

The pandemic brought the criticality of globalization into razor sharp focus, not only to ensure business continuity, but to future-proof organizations against disruptions. The role of talent in future-proofing organizations, especially now with the proven success of the remote work model, is undeniable. Zinnov's analysis shows that enterprise software companies with globalized engineering R&D locations are valued higher at a 7.1 multiple, compared to companies with domestic ER&D at a 5.4 multiple.

Adding to the fray, the acceleration of global digital engineering spend across industries will result in a convergence of skills, hence putting a premium on skilled talent around the world. This global talent crunch, if not addressed by solving for the source of talent, rather than competing with the same pools, will inevitably lead to a stalemate that will not only hamper business growth but also cripple organizations with scaling challenges.

As organizations chase talent around the world, a distributed multi-hub strategy will become imperative to drive business growth and accelerate innovation. And trends such as increased adoption of business communications platforms, development of cloud-based infrastructure for closer collaboration, and the emergence of new regulations have further emphasized the effectiveness of a multi-hub strategy.

Zinnov CEO Pari Natarajan said, "Talent will be at the core of decision-making for organizations across the globe. As leaders grapple with the increased talent crunch, it will become critical for them to identify new talent hotspots to build Centers of Excellence where full software engineering teams can be housed that can take end-to-end ownership and be scaled at optimal costs. Our experience with our customers in a post-pandemic construct highlights the potential that Eastern European countries possess in terms of high-quality talent; however, this is hampered by scalability challenges due to limited talent pools. India emerged as the best-fit location as it will be home to 1/8th of the world's digital talent by 2030."

"Additional dimensions such as geopolitical stability; ease of doing business; a mature ecosystem of technology startups, universities, and service providers; and strong processes that go well beyond business continuity to create business excellence are what continue to make India the top choice for companies. With a continued focus on human development programs, Asian countries specifically have the potential to outpace other economies in growth, primarily due to the talent advantage," he further added.

Article published by icrunchdata
Image credit by Getty Images, Stone, Thomas Barwick
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