How tech companies are responding to the talent gap

As the number of unfilled tech jobs rises, and younger tech workers head out the door quicker than ever, companies are being forced  to turn to non-traditional methods of finding new talent.

Organizations are developing in-house training to upskill and reskill employees, some of them from non-technology business units. Companies are also bypassing academic requirements to focus on skills-based hiring and seeking talent in regions not traditionally sourced for new hires.

While unemployment is at historic lows in many sectors, the tech industry has been hit hard by the pandemic and the Great Resignation, leaving companies facing a dearth of qualified job candidates to fill more than one million openings.

As many as 37.4 million people are expected to quit their jobs in 2022, according to Gartner; the majority of those workers are Millennials and Gen Zers. And by 2030, a projected global human talent shortage of 85 million people could result in about $8.5 trillion in unrealized annual revenues, according to a study by Korn Ferry, a Los Angeles-based management consulting firm.

Yannick Binvel, president of Korn Ferry’s Global Industrial Markets practice, summed things up in an earlier Korn Ferry report: “Governments and organizations must make talent strategy a key priority and take steps now to educate, train, and upskill their existing workforces.”

Low-code to the rescue?

With skilled developers scarce, more organizations are turning to low-code software development so that enterprise users with little formal coding experience can build business apps.

In 2021, the global market for low-code development technology hit $13.8 billion in revenue. And the adoption of low-code software development platforms is growing by more than 20% a year, according to Gartner. By 2023, low-code development is expected to be adopted by more than half of all medium- to large-sized companies.

Low-code development tools abstract away the more commonly used codebase and replace it with a graphical user interface or visual “what you see is what you get” (WYSIWYG) interface to build an application. “No-code tools simply refers to the abstraction of all codebase into GUIs,” according to Gartner.

Low- and no-code tools are designed to help business users such as analysts or project managers with little formal coding experience develop apps. That helps alleviate the need for traditional app developers.

Appian, a McClean, Virginia-based platform-as-a-service (PaaS) vendor for building enterprise software applications using low-code development tools, typically trains or hires about 4,000 low-coders a year. That number grew by almost 70% from Q1 2021 to Q1 2022. This year alone, Appian expects to give away 1,000 scholarships toward training low-code skills for low-income and under-skilled workers and veterans.

Appian’s basic low-code developer program is two weeks (80 hours) long. To become certified for a specific application, training takes a bit longer — three-and-a-half weeks, according to Adam Glaser, senior vice president of engineering Appian.

“You won’t be a project lead after it, but you’ll know the capabilities of our platform, workflows, interfaces, and business rules,” Glaser said. “Of course, there’s someone who will have architected the project and led it, but you’d be a contributing member.”

Glaser said his company is part of an ecosystem scouting for tech prospects that includes every big name in consulting — “the KPMGs and PwCs and Deloittes of the world.

“Like Appian, they all have a strong history of going to these colleges and universities and they make appealing a career in a technical field without the technical degree,” Glaser said. “So, they’re going to the systems engineers and the management information system people — even liberal arts and English majors — and they’re saying, ‘Look, this is a path for you if you want.’ And it’s a portable skill.

“It’s really creating this new wave of low-code and no-code,” he said.

Like other low-code development platforms, Appian’s course work is mostly offered online and self-paced. The company does have physical facilities for tutoring and virtual instructor feedback.

Unlike apps built at a single point in time through a coding language that might only be updated once or twice a year, low-code applications can evolve quickly because they can be customized by every user, according to Glaser.

And low-code apps are being adopted by every market vertical, including retail, life sciences, government, and financial services.

“…Even how low-code apps get used within different major financial services organizations varies widely,” Glaser said. “One uses it to power a call center. Another uses it for their credit card registration system. Another uses it for fraud detection. And another uses it for know-your-customer applications.”

Competitive pay with less training time

The starting salary for low-code developers is around $100,000, according to Glassdoor, a job search and recruiting site best known for its salary database. In fact, more low-code users report base salaries of $100,000 or more compared to high code-only developers, according to a survey of 400 developers conducted by Appian.

Finding workers with low-code skills, or training them in-house, is becoming common, according to John Bratincevic, a senior analyst at Forrester.

Gartner

While often conflated with citizen development (which low-code can enable), a lot of professional developers use it, too, because it speeds the time to market for business apps of all kinds. According to Forrester Research, 30% of the professional developer community uses low-code in some form.

“And those developers were also ahead of the non-low code developers in adopting cloud-native technology and advanced use cases. So they weren’t the dummies,” Bratincevic said. “They were doing the cool stuff. So, even among professional developers, it’s not a niche thing.

“In my opinion, low-code development will [eventually] just be table stakes for the business worker — just like personal productivity tools,” Bratincevic added.

The pandemic and rise of hybrid work changed the perception of low-code business application development, because many organizations needed to bring applications to market faster. For example, in March 2021, every US bank suddenly had to deal with Paycheck Protection Program (PPP) loans from students when the Biden Administration moved to help struggling student loan borrowers who had previously qualified for the PPP, according to Bratincevic.

“All of a sudden, a lot of PPP loan applications apps were being developed using low-code techniques,” Bratincevic said.

Along with Appian, top low-code development platforms include SalesForce, ServiceNow, Mendix, OutSystems, and Microsoft PowerPlatform.

Skills shortage remains CEOs’ greatest concern

In a fall 2021 survey by Fortune and Deloitte, 71% of CEOs anticipated a skills and labor shortage would be 2022’s biggest business disrupter, creating an urgent need for organizations to bring training and skills development in house.

The savviest organizations are taking on the onus of training talent themselves, increasingly hiring people straight out of school, according to Jean-Marc Laouchez, president of the Korn Ferry Institute. These firms are also trying to instill a culture of continuous learning and training.

“Constant learning — driven by both workers and organizations — will be central to the future of work, extending far beyond the traditional definition of learning and development,” Laouchez wrote.

In that light, coding bootcamps have become talent pools for organizations looking for skills-based applicants over more traditional college graduates.

Graduates from coding boot camps reported a quick ROI, higher salaries, and STEM career opportunities, according to recent survey of 3,800 US graduates of university coding bootcamps by US education company 2U and Gallup.

All graduates reported they saw their salaries increase by a median of $11,000 one year after graduation, with those who moved from non-STEM to STEM jobs after graduation seeing the highest income growth.

Zoho bucks traditional hiring and retainment practices

Cloud software provider Zoho Corp. has had an internal training program for employees and young tech apprentices since 2014. The Chennai, India-based company has more than 11,000 workers in India and 22,000 globally between its two main divisions, Zoho and ManageEngine, a provider of IT management software.

With its Zoho University, the company expanded the number of 12- to 18-month courses it offered from software development and engineering to include softer skills such as communications, problem solving, and customer relations. It then renamed the effort Zoho Schools of Learning.

Vijay Sundaram, chief strategy officer at Zoho Corp. and ManageEngine said the training program seeks talent not only from within but from underserved socio-economic areas and recent high school graduates.

“We realized the futility of looking for so-called pre-qualified talent. First, there was a lot of competition for it and second, college degrees really didn’t amount to much in our business,” Sundaram said. “It all came down to what knowledge people had about technologies, as opposed to what they learned in an academic institution; how much they had worked with customers and related problems. And that translated into measures of success.”

Sundaram, who rarely looks at resumes when hiring — focusing instead on skills and experience — said Zoho also had a social purpose in mind for its internal training program: it wanted to provide opportunities to people living in smaller towns and cities, rural regions and areas with underprivileged populations.

“A lot of this was started in India, but many of the same principles and philosophies are moving into other countries, such as the UK and the US,” Sundaram said. “If you look at the hiring strategies in technology — and I’ve been in this business 30 years — you see the same issues. Everybody follows the same playbook, especially if you’re in the Bay Area like I am.

“It doesn’t create geographical distribution. It impeded diversity, because you start looking at all the same kinds of people, and you also start imposing certain hiring restrictions — imposing college degrees and [hiring] only from specific institution. So, in essence, you start self-selecting. And that contributes to social inequalities we’ve been seeing across the strata of society.”

The traditional hiring playbook also dilutes talent pools in more remote regions because talented people seeking work move to metropolitan areas where they know most jobs are located.

The strategy behind the Zoho’s program wasn’t completely altruistic. Zoho found that regions underserved by academia and professional opportunity were rife with potential talent.

“This was more than just a hiring strategy. This is about creating a sustainable company,” Sundaram said. “And that includes moving offices into rural areas. We’re doing that now in Europe and here in the US.”

In the US, Zoho was originally headquartered in Pleasanton, California. About a decade ago, it decided to move to Austin, Texas, which it considered more rural at the time. But Austin became a technology hub “like the Bay Area,” so the company opened offices in various towns around Austin. Three months ago, it opened an office in McAllen, Texas, on the Mexico border.

“I was astounded to see the infrastructure there. There we have fantastic facilities, good academic infrastructure, but no tech company competitors because it’s off the beaten path,” Sundaram said.

When employees graduate from the Zoho Schools of Learning, a company policy requires that after five years their salary has to be commensurate with that of a college graduate who didn’t attend the program but has the same job.

“That’s so we don’t create a tiered system or a caste system of sorts. They may take a little longer to grow into the job because they didn’t come in with a college degree and they’re younger…, but pay scales have to eventually be equalized,” Sundaram said.

To date, Zoho has graduated 1,200 students from its training program.

“We have people who joined this program who now lead teams of 150 people. And many of the people on their teams have advanced training and PhDs in engineering,” Sundaram said. “That’s what’s happened in the short period of time we’ve been running this program.”