IT staff shortages damage the bottom line: IDC report

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May 15, 20244 mins

Business IT AlignmentHiringIT Skills

According to an IDC survey of IT execs, missed revenue growth, quality declines, and plunges in customer satisfaction are among the key business impacts of understaffed IT orgs.

CIOs instinctively understand how IT staff shortages and recruitment struggles make every task and deliverable more difficult. But it’s very different when the business leaders they report to are shown the concrete business problems that arise as a result of shortages of staff in the IT department. A new IDC report delivers those details.

Nearly two thirds of the IT executives surveyed said “a lack of skills has resulted in missed revenue growth objectives, quality problems, and a decline in customer satisfaction. And the situation is not expected to get any better,” according to the report.

The business nightmare in numbers:

62% missed revenue goals due to IT staff shortages

61% experienced forced product delays

59% had product/service quality problems

59% experienced a demonstrable plunge in customer satisfaction

57% saw lost revenue

IDC also predicted more problems from staffing shortages: “By 2026, 90% of organizations worldwide will feel the pain of the IT skills crisis, costing as much as $5.5 trillion in delays, quality issues, and revenue loss.”

Training can be an answer — if done right

The report shed light on two parallel causes: the IT talent shortage itself, and resistance from employees in being retrained for different tasks.

Gina Smith, research director for IDC’s IT Skills for Digital Business practice and the report’s primary author, said some of the problems with the skills shortage stems from a shortage of college graduates.

On its own, that college graduate shortage is not necessarily a bad thing because such degrees are not always needed for advanced work, such as cybersecurity defenses or AI coding. Moreover, many IT leaders are rethinking college degree and experience requirements in favor of skills-first hiring approaches. But it does require specialized training.

Some enterprises “are begging AWS to start certification programs,” Smith said.

Although not addressed in the report, Smith said that not all compensation packages — especially salaries — have kept current with the value of available talent.

“In any competitive market, the laws of supply and demand are in effect” suggesting the need for higher pay, Smith said.

But many employees — especially GenZ workers — place compensation lower on their list of priorities, preferring to have “flexibility and a clear path ahead of them,” Smith said. “For the GenZ contingent, they love these online credentials.”

“Getting the right people with the right skills into the right roles has never been so difficult,” Smith stressed. “As IT skills shortages widen and the arrival of new technology accelerates, enterprises must find creative ways to hire, train, upskill, and reskill their employees.”

Smith and others advise developing a culture of learning as among the best ways to achieve this goal. But many enterprises’ training efforts are falling short.

“Employees complain that the courses are too long, the options for learning are too limited, and there isn’t enough alignment between skills and career goals,” Smith said.

Training options include “everything from classroom training to hackathons, hands-on labs, and games, quests, and mini-badges,” she said.

When the survey asked what skills are in the highest demand, AI — and its many components — was overwhelmingly the top choice, followed by IT operations, cloud architecture, application maintenance, cloud data management/storage, API integration, data analysis, cybersecurity and IoT software development.

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