January 14, 2022

The Outlook for IT Labor in 2022

IT Development Meeting

By Monika Mueller

It doesn’t matter what industry you’re in, chances are, you’ve felt the labor crunch. We all have. And not just in IT, though that’s where many have felt it the most acutely. Around this time of year, we’re all probably wondering the same thing: Will 2022 bring any relief?

Unfortunately, the short answer is: Not necessarily. However, while there may not be the influx of IT labor so many have been looking for, the talent is out there. You just have to know where to look, and how to attract and retain professionals with the skill sets you’re looking for.

Many of the labor trends of 2021 will continue, and even pick up steam, in 2022. Demand for IT workers is up, supply is down, skills gaps are widening and technology professionals are leaving current employers in search of not just higher salaries, but a better work-life balance and even a sense of purpose.

Demand is Up

The demand for IT talent has never been higher. Tech job postings are up 39% over 2020, nearing pre-Covid highs. And companies are doubling down on emerging technologies, which is shining a spotlight on the growing skills gap that many organizations face. 

According to Gartner’s Emerging Technology Roadmap for Large Enterprises, 54% of IT and I&O leaders are increasing their investment in emerging technology, up from 29% in 2020. According to the same report, 64% of IT execs said the talent shortage is the biggest roadblock to adopting emerging technology. Only 4% felt this way in 2020.

Supply is Down

Skill sets across the board are in short supply, especially when it comes to emerging tech like AI and ML. According to a Randstad Sourceright report, for every U.S. job in this field, there are only eight potential candidates. And for cybersecurity experts, there are only five qualified workers available to fill each role.

Not surprisingly, tech leaders are feeling the squeeze. In an IEEE report on The Impact of Tech in 2022 and Beyond, 73% of those surveyed cited recruiting technologists and filling open tech positions in the year ahead as challenging.

The Great Resignation is a Factor

Unfortunately, the Great Resignation of 2021 is not yet behind us. November saw a new record high, with 4.5 million workers across industries leaving or changing jobs, which beats the September record of 4.4 million workers. And the IT industry is not immune to this trend. In fact, we appear to have it worse.

According to a recent survey, 55% of Americans across industries said they plan to look for a new job within the next year. And in the tech industry? A whopping 72% are thinking of quitting their jobs in the next 12 months, according to a survey by TalentLMS and Workable. Which begs the question … why? Hint: It’s about more than money.

According to Hired’s report on Hiring in the Great Resignation and the State of Tech Salaries in 2021, 35% of surveyed tech workers expected their salary to increase up to 10% over the next six months. And 22% expected their salary to increase by as much as 20%. Notably, these are expectations at their current job. So why would they look elsewhere?

Beyond sky-high salaries, tech talent wants freedom, flexibility and purpose — or as WIRED puts it, “time spent on meaningful tasks.” Other highly ranked benefits according to the Hired survey include stock in a publicly traded company, flexible work scheduled, paid time off, health insurance and tuition reimbursement.

How To Attract and Keep Tech Talent

Flexibility ranks near the top of IT workers’ wish lists, and that includes remote work options. Organizations that hold onto full-time on-site requirements will not only face a much smaller talent pool, they simply won’t be able to compete. Businesses must cast a wider net, not only across the country, but around the globe. Not sure about outsourcing? Working with a US-based outsourcing company can ease the uncertainty of hiring IT talent that’s located in a different part of the world.

From supporting a healthy work-life balance to offering robust opportunities for career advancement, attracting tech talent in the current market is about a lot more than salary. Flexibility will be required to weather the current labor shortage, which shows no sign of letting up in 2022. Start the year by considering five specific strategies for overcoming the IT labor shortage, and be prepared to adjust your mindset.


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