The tech industry is in the midst of reshaping how it identifies, hires and nurtures talent. The old focus on degrees and prior experience has given way to an “all of the above” strategy that includes a premium on upskilling existing employees as well as seeking out non-degree credentials. The 2024 State of Tech Talent Report conducted by the Linux Foundation provides a window into these transformative changes.
The Evolving Priorities in Tech Hiring
Traditionally, the tech industry placed a high value on academic degrees. However, as the pace of technological change accelerates, the skills required to succeed in this field are evolving rapidly. The report reveals a notable trend: Certifications (23%) rank higher than college or university degrees (16%) when assessing technical skills. This shift underscores the growing recognition that practical skills and hands-on experience are becoming increasingly crucial in the tech workforce.
However, this is not always reflected in how organizations recruit new talent. According to Boston Consulting Groups’ Compensation over Credentials: The Rise of Skills-Based Hiring, in 2022, in the United States, 69% of computer programmer positions and 95% of mobile application developer jobs still required a degree. Long standing research by John E. Hunter and Rhonda F. Hunter indicates that focusing on skills during hiring is five times better at predicting job performance than hiring for education.
The Rise of Skills-Based Hiring
The move toward skills-based hiring is a pragmatic response to the dynamic nature of technological progress, which is driving a continuous evolution of the list of in-demand skills. Hiring managers increasingly prioritize candidates with tangible skills and certifications directly applicable to the projects and technologies at hand. This approach opens up opportunities for a wider pool of talent, including those who may have taken non-traditional paths to acquire their skills.
It is essential for training professionals to align their programs with this new paradigm. By focusing on performance-based training and industry-recognized certifications, they can equip the workforce with the practical skills they need to succeed in the ever-changing tech landscape. At the velocity of tech adoption, the historical option of only hiring candidates with experience using your company’s specific technology stack is no longer practical.
Upskilling: a Strategic Imperative
The Talent Tech report also highlights the critical role of upskilling in today’s tech industry. An overwhelming 98% of organizations consider upskilling a crucial strategy, with 36% rating it as extremely important. And across all technology domains, approximately 48% of organizations prioritize upskilling or cross-skilling existing staff over hiring new employees or engaging consultants. This emphasis on continuous learning is not just about individual career growth but also a strategic imperative for organizations to stay competitive.
By prioritizing upskilling and cross-skilling initiatives, companies can cultivate a versatile and adaptable workforce ready to tackle the challenges of emerging technologies. Training professionals must develop programs that not only impart new skills but also foster a culture of continuous learning within their organizations.
Generative artificial intelligence (Gen AI) can present promising opportunities here. Rather than leading to staff reductions, the time freed up by Gen AI can be channeled toward upskilling and cross-skilling employees, especially in domains facing a scarcity of information technology (IT) talent. According to Boston Consulting Group’s recently released From Potential to Profit with GenAI, over one-half of leaders (54%) expect Gen AI to deliver cost savings in excess of 10%, presenting extraordinary opportunities for productivity gains, including systematically upskilling and reskilling their workforce to fill new roles. Leveraging this shift will enable employers to prioritize talent development over recruitment.
Navigating the Challenges and Opportunities
While the shift toward skills-based hiring and upskilling present exciting opportunities, it also can come with challenges. Creating an environment that nurtures continuous learning and ensures that newly acquired knowledge translates into practical applications are among the key hurdles identified in the report.
To overcome these challenges, organizations must be strategic in their approach to training and development. This involves designing programs that are engaging, relevant and aligned with the real-world needs of the organization. Partner with industry experts and leverage cutting-edge learning technologies to create dynamic and effective training experiences that drive results.
Moreover, organizations must recognize the immense potential that lies within this new talent landscape. As employees commit to continuous learning and acquiring in-demand skills, learning and development (L&D) leaders can open up a world of opportunities for career growth and innovation. Organizations can embrace skills-based hiring and invest in their employees’ development to not only build a strong and resilient workforce but also position themselves at the forefront of the digital revolution.
Charting the Path Forward
Looking to the future, one thing is clear: The tech industry’s approach to talent is undergoing a profound transformation. Yesterday’s methods won’t train tomorrow’s workforce. Embrace skills-based hiring, prioritize continuous learning and invest in the development of the workforce to unlock the full potential of human capital and shape a brighter, more inclusive, future for the technology sector.
