How to stay ahead of the talent conundrum in the tech sector 

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As business and society collectively lurch towards artificial intelligence (AI), how can you attract and retain the talent needed to be competitive?

Around the globe, and across all industries, there is an increasing skills shortage leaving many openings left unfilled and organizations unable to perform at their best.[1] The International Labour Organization’s[2] 2024 report World Employment and Social Outlook found that, “77% of employers report difficulties in hiring candidates with the right skill set.”

The US Chamber of Commerce calls the recent changes in employment “The great reshuffle”, citing around 130 million workers quitting their jobs between 2021 and 2023. In a recent report they produced on labor shortages they stated, “The industries with lower-than-average unemployment rates have fewer experienced candidates to choose from when filling their job openings. This situation leads to heightened competition among businesses in these industries as they vie for the limited pool of available talent.”[3]

The race to embrace AI, in both workflow and in enhancing the capabilities of the workforce, has inevitably led to a surge in demand for individuals with skill sets to create, implement and utilize the nascent technology. This increase in demand for a finite resource, the workers with the requisite skill set, has manifested in salaries that companies are struggling to match.

This trend was highlighted in Mercer’s 2024 Global Talent Trends[4] report with 46% of tech sector executives acknowledging their concerns about the lack of the workforce capabilities available to them. This is coupled with 46% saying that failure to adopt AI was one of the main risks to business success.


Innovation thrives on talent, without the necessary skills, your company may miss out on valuable growth opportunities

Top strategic priorities amongst technology C-suite employees

46%

Failure to adopt AI, has been identified as one of the top 3 risks to business success

59%

Technology companies say inadequate deployment of technology is inhabiting transformation goals

HR’s biggest challenges

53%

Rising labor costs

50%

Managing a remote workforce

48%

Difficulty in attracting digital talent

44%

Skills shortages

34%

Knowledge loss as workers leave

Race for tech talent becoming sprint for critical skills

46% of tech sector executives concerned about lack of workforce capabilities


Talent with the desirable skill set, once largely used to be restricted to the tech sector, but as an increasing number of organizations look to embrace AI or bulk up their cybersecurity defenses competition for those workers is heating up. Despite a round of substantial layoffs in the global tech sector the voluntary employee turnover remains high for both software and IT workers, as shown in Figure 2.

Figure 2

Figure 2
The chart illustrates employee turnover rates in the global tech sector, highlighting high voluntary turnover among IT and software workers. The colours represent: dark blue for the previous year, green for the current software industry, pink for the current IT industry, and light blue for total turnover, indicating a skills shortage in the technology sector.
Technology skills shortages are ranked the second biggest people risks in the UK and fourth globally.[5] As innovation is driven by talent, if you are unable to attract or retain employees with the right skill set you will inevitably fail to meet your potential for growth and possibly fall behind your competitors as AI is adopted across industries.

How can my organization stay up to date with the latest trends in the tech HR market?

Comptryx is Mercer’s proprietary workforce metrics and remuneration benchmarking platform for the technology industry. It has all of the data required to maintain a competitive advantage in the market. The information is compiled from more than [NW1] 700 technology organizations and provides data from over 120 countries [NW2]. The published data is updated on a quarterly basis to ensure that your decisions are supported by the latest industry insights.

As well as access to the Comptryx data, our consultants are on hand to help you make sense of it all, helping you to create strategies that will deliver the best possible business outcomes.

Figure 3a and 3b shows data from Comptryx’s Q3 2024 update and highlights how base wage and wage inflation differs between selected markets across Eastern and Western Europe. We can see that base salaries for professional level workers in the research and design function of technology businesses are higher in Western Europe, wage inflation in Eastern Europe is significantly higher. This is due to the emergence of technology in Eastern European and the higher demand for talent. It is worth highlighting here that current pay in Romania is already on par with the Spanish and Swedish markets, how long will it be before the rest of the region follows suit? With current wage inflation between 25% and 41% it may not be long.

Figure 3a

Wage inflation western Europe
This bar chart illustrates wage disparities in Western Europe, revealing that France, Ireland, and Spain have experienced double-digit wage inflation over the past three years, while Romania and Poland have seen approximately 40% growth in wage inflation during the same timeframe.

Figure 3b

Central and Eastern Europe
This is a bar chat that highlights the different wage differences in Central and Eastern Europe. It shows that Romania and Poland have both seen around 40% growth in wage inflation over the last 3 years.

The insights you can unlock

Compensation isn’t all about base pay, there are many ways to incentivize potential employees to join your organization and retain the talented staff you have. We understand what employees in the technology sector value and can help you craft a package to meet those demands.
Figure 4
This chart illustrates how Mercer data, insights, and strategic advice can assist organizations in developing plans to bridge the gap between their current state and desired goals, highlighting effective HR strategies for closing skills gaps.
Our data, insights and strategic advice can help you formulate a plan to take you from where you are currently to where you’d like to be. Do you want to know what others are offering, and more importantly, if it is working? We can give you the data you need to make informed decisions around additional benefits, the four-day work week, working from home to hybrid working models and more.

Unlocking talent attraction and retention

How are you rethinking rewards to better attract and retain talent?

What HR and Reward has recently implemented:

  1. More types of rewards that can be personalized (49%)
  2. Emphasizing pay-for-performance to recognize top talent (45%) 
  3. New technology to improve the employee experience (43%)
  4. Transparently sharing pay/ranges for all roles (33%)
  5. Adjusting pay structures to align with market (33%)

What do employees say would make a difference:

  • Commuting allowance?

  • Free food?

  • 4-day work week?

  • Work from home?

  • Larger equity / LTI awards?

  • More Opportunities

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