How Talent Scarcity is Shaping Tech Culture, for Better and for Worse

On top of that, software developer demand is projected to grow 22 percent from 2020 to 2030, faster than the average for all occupations.

On top of that, the Covid-caused “Great Resignation” is accelerating automation (from lack of labor) which is also increasing the demand for technical jobs.

This is an avalanche of a problem for organizations–and one that doesn't have a clear solution. Because of the lack of labor, companies are desperate, which is creating some bizarre cultural trends in tech organizations.

We wanted to understand the cultural ramifications of this labor shortage. So we spoke with technical leaders to understand what they’re seeing in their organizations, and how they’re reacting.

Developers: More Money, More Problems?

Of course, technical talent benefits from talent scarcity. Salaries for these individuals have skyrocketed over the past few years, creating a new baseline for these roles.

But how do higher and higher (and higher) salaries affect culture?

For so many organizations, it becomes easy to demand overtime or add pressure to project timelines. Surely, if an organization pays more for engineers, they expect equal value in output. But we know what often happens when people are overworked and stressed: burnout culture that spreads to product, design, and marketing teams.

Pair burnout with a software developer’s ability to change companies on a whim, and you’ve got our current problem: a perpetual and normalized cycle of high pay, burnout, and job switching.

This is beneficial to no one.

Sure, if you have enough money, you can hire who you need, but that’s not realistic for non-FAANG organizations. Companies need to proactively maintain their culture, prevent burnout, and create healthier workplaces.

Working from home has made implementing cultural benefits more difficult, as Ashley Streb, chief customer officer for DEPT® Americas, states, “I see a lot of what I call ‘fatigue’ within organizations. I believe this stems from a lack of separation between work and home. There is not as much variety in experiences which feels monotonous. We’ve seen this at DEPT® too.”

The solution?

“It’s all about bringing back the human element. Connecting with people is important for variety, burnout prevention, and meaning amidst the day-to-day. Something like DEPT® Fest or happy hours gives people the time to connect which recharges us all. People have lost that human element, so we all need to find ways to have that in our cultures.”

Organizations: A Widening Gap in Culture

Despite the problems of burnout in many organizations, no one can deny that there have been positive cultural impacts due to the power of individual workers.

Agile companies have made their work environments healthier, granting more freedom, satisfaction, and work-life balance to their teams.

These adaptive companies are widening the gap between themselves and old-school, legacy organizations. The gap might now be restricted to talent, but eventually, it will be the ability to operate a successful business in this decade.

Organizations that cling to a “traditional” work culture will undoubtedly hemorrhage technical talent, whether they can pay well or not.

In fact, Allan Winterseick, Managing Partner at Devetry (part of DEPT®), predicts that “Scarcity will weed out companies, starting this decade. The shifts in work culture trends may not look huge year to year. However, in five years, if you haven’t culturally evolved, you won’t be able to hire enough technical folks. I think we’ll start to see companies fail.”

More Diversity, but Less Diversity

Being desperate for workers has both positive and negative effects.

Years ago, many companies relied on internal referral networks. This tactic was accepted in many instances because you tended to hire like-minded people. However, it’s not conducive to promoting diversity.

Today, companies are searching far and wide (literally) for engineers. By going outside of internal referrals and recruiting with diversity in mind, you can expand your team’s diversity.

On the other side of talent, candidates have opportunities they didn’t have before. Because companies are more lenient and flexible, employees with imperfect experience have a chance at better jobs. And often, when you take a chance on someone, they get excited, work hard, and appreciate their positions. It can be a win-win.

However, this same desperation for workers can backfire on companies and the teams inside.

If you desperately need labor, it is too easy to disregard diversity, culture, and personality.

On one hand, skill sets are getting hired, but on the other, organizations are not being as thoughtful. Even when hiring managers predict a bad fit, they might overlook it, which can have major downstream effects on culture.

What To Do in a World of Talent Scarcity

There is a lot of ambiguity in regard to talent scarcity and culture. Good things, bad things, good things that might soon become bad—you get the idea. What can you do to protect yourself from the unknown? Here are our team’s thoughts on succeeding during talent scarcity.

1. Be strategic in technology and innovation. Your expenses will increase no matter what, so it’s up to your leaders to make sure your investments are paying off.
2. Create a culture where burnout is rare. Burnout is unavoidable, but giving people flexibility, time off, and a supportive environment is probably the best way to keep your developers and product teams happy.
3. Continue giving imperfect candidates a chance, but protect yourself with solid managers. These candidates may need extra time and direction than your other employees.
4. Tomorrow’s most successful organizations will prioritize empathy. A positive culture starts with empathy and human connection. Make sure your leaders practice it.

We don’t predict a huge influx of new developers anytime soon, which means scarcity will get worse. So it’s imperative that companies prepare themselves, both financially and culturally.