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

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
Failure to adopt AI, has been identified as one of the top 3 risks to business success
Technology companies say inadequate deployment of technology is inhabiting transformation goals
HR’s biggest challenges
Rising labor costs
Managing a remote workforce
Difficulty in attracting digital talent
Skills shortages
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
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.
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
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
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
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.
Unlocking talent attraction and retention
How are you rethinking rewards to better attract and retain talent?
What HR and Reward has recently implemented:
-
More types of rewards that can be personalized (49%)
-
Emphasizing pay-for-performance to recognize top talent (45%)
-
New technology to improve the employee experience (43%)
-
Transparently sharing pay/ranges for all roles (33%)
-
Adjusting pay structures to align with market (33%)
What do employees say would make a difference:
Related products for purchase
-
Workforce analyticsAccess the tech industry's pay benchmarks, workforce insights, talent modelling and more.
-
Compensation data
Global Compensation Planning
Everything you need to know about salary increases, economic indicators, mandatory pay schemes and more.
Related solutions
-
Attract & retain talent
Strategic workforce planning
Mercer’s strategic workforce planning solutions provide a rational business basis to prioritise, develop and fund the people practices needed to support business… -
Talent & transformation
Organisation design
Mercer’s organisation design consulting can help you transition from a traditional multilayered organisation to a simple, agile and distributed structure. -
Employee experience design
Mercer’s employee experience design uses design-thinking principles to define and shape solutions to meet your people’s needs more effectively and to bring out the…
Related insights
-
Future of work
Global Talent Trends 2024-2025
In an era where people risk equates to business risk, striking the balance between tech acceleration and a winning work experience will be critical. -
Mitigating climate health risks through innovation at Davos 2025
Mitigating climate health risks through innovation at Davos 2025. The World Economic Forum fosters collective leadership and local strategies for solutions. -
Benefit strategies
Top health trends for 2025
Top healthcare research trends shaping the future of employer-sponsored benefits may sound familiar, but a lot is changing. Find out the top 3 trends and actions…