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The IT Talent Pool Is Shrinking: What the Population Crash Means For Your Business
There is a growing body of work in books and on the Internet regarding an irreversible trend – the demographic drop off that will take place in the United States in the coming years. As a matter of fact, it has already begun. This demographic change will affect all aspects of society including the labor market, education, consumer spending, tax revenue, and how we generally run our businesses.
A great article by Ben Casselman captures this perfectly. Casselman shares, “In 2003, 82 percent of boomers were part of the labor force; a decade later, that number has declined to 66 percent, and it will only continue to fall.” According to the Bureau of Labor Statistics, the average births per woman in the 1950’s was about 3.5 – compared to the present rate of 2.1. You do not need a PhD in statistics to realize the long-term impact of this on the U.S. population and labor pool. More open and flexible immigration policies in the United States have helped to buffer the decline in population but have not completely offset the problem.
If you are in the IT industry, this reduction in the labor force will compound an existing problem. The United States has been experiencing challenges for years related to our overall engineering capacity. Our colleges and universities have not been graduating as many engineering students as required by our labor market. We may have turned a corner on this in the long term as many elementary schools and high schools are now offering coding curriculum and clubs to encourage the development of these skills. That said, my ten year old daughter who is participating in this new surge around STEM, will not be helping many Fortune 500 organizations or tech startups with their coding requirements for many years to come.
The talent war has been raging among IT consulting firms as we all seek to onboard the most talented software architects and engineers. We are arguably at full employment in IT and talent, and resources are at a premium. Per the demographic trends, this will only get more difficult as the Baby Boomer population continues to move toward retirement and the pool of available resources and talent keeps shrinking.
The good news is that services companies that have been able to leverage global labor pools are better positioned to bridge the people and engineering gap. As the population decline continues to gradually present itself in the coming years, it is important that those in leadership positions have a plan in place for their organization.
As is customary, I will wrap up with a (three-fold) call to action:
- First, the leadership in your organization should already be thinking about this issue and how it will impact your goals in the next 5 to 10 years. This conversation is not taking place at sufficient levels of urgency.
- Consider how your firm will maintain or improve on its competitive positioning and devise appropriate strategies to win the best talent in the marketplace. To that end, we offer careers with great benefits, relocation opportunities, and world-class training and growth programs at EPAM.
- Determine new and creative ways to leverage new and different labor pools, internships, and any other means to create a pipeline of talent to protect the future of your organizational goals. We’ve been doing a lot of that lately at EPAM as we’ve recently expanded our delivery capabilities in India, China, Czech Republic, and Mexico.
With the right forethought, your organization will be prepared for success. While this might mean shifting your current labor pool, you can tap into the most talented IT resources and continue to tackle your growing software needs.