Top 10 Tech Recruiting Challenges in 2023

No matter how you look at it, business in the global technology industry is booming and along with it comes a huge demand for tech recruitment. 

According to CompTIA, the direct economic impact of the industry is equivalent to 10.5% of U.S. economic value - over USD $2.0 trillion. The industry also contributes an estimated 4.8 additional jobs. Compared to other industries, it is one of the fastest-growing and does not appear to be slowing down. Additionally, as technology evolves new job titles are emerging that did not exist before. 

Steady growth is expected over the next few years as companies continue investing in digitalization plans after the pandemic’s disruption. IDC had predicted that ICT spending from 2021 through 2023 will grow by at least 5% per year. Technology skills are also highly sought-after outside of the industry as digitalization spreads to other sectors. In 2019 alone, more than 40% of software engineer and developer hires were made by non-tech companies. This is creating more competition with the likes of Google, Meta, Apple, Netflix, and Amazon for top talent.

In addition to more non-tech companies competing to hire technology professionals, there are more significant challenges standing in the way of the tech industry achieving full employment. These 10 challenges are not only impacting hiring rates but are also changing how recruiters approach qualified candidates. 

The good news is that technology adoption can help to minimize many of these issues.

Challenge #1: The talent shortage

The gap between the number of job openings and qualified professionals to fill those roles is hardly a new issue but it is one that has persisted for years. What this means for companies is that they are operating without the people they need to achieve key strategic objectives. In the 2021 Harvey Nash Digital Leadership Report, 67% of respondents said that the skills shortage is preventing them from keeping pace with change. Although 44% of them expressed plans to increase permanent hires in the next two years, it may not be enough to acquire the cybersecurity, big data/analytics, and technical architecture skills they are seeking. 

Companies are taking a multi-pronged approach to address this issue by reskilling current staff so they are capable of using new technologies. 

Companies are also changing workforce models to adapt to the hiring market. Instead of focusing on permanent hires, companies are realizing the value of hiring freelance or contract workers with the skills they need to complete specific projects.

Challenge #2: Engaging passive talent

Given the shortage of qualified talent applying to job vacancies, recruiters need to get creative about sourcing candidates. One tactic is tapping into the vast pool of passive candidates who comprise 70% of the global workforce. Devoting time - and considerable effort - to researching, identifying, and engaging with professionals who aren’t actively looking for a new job may seem counterintuitive to recruiters. 

In reality, expanding your database is a prudent step towards effectively filling your hiring pipeline in the long run. Building relationships with professionals who may not be a fit for a job today but could be tomorrow also helps these professionals establish a positive association with the employer’s brand. 

Adopting an applicant tracking system (ATS) solution can make it easier to organize candidate profiles and source the right potential applicants for job openings in your database faster than traditional methods. 

Challenge #3: Standing out in a competitive crowd 

Job seekers are being flooded with offers from companies in the technology sector - as well as outside of traditional tech circles. This is making it possible for them to be more selective about the job offers they accept. Factors like the company’s existing tech stack are vital - especially to attract highly-skilled tech talent

Companies also need to focus on enhancing employer branding and speaking clearly about the values of the organization. That means repairing any reputational issues that could compromise hiring efforts. Employees will also share their experiences with peers, so morale is a very important consideration.

Recruiters also need to take a close look at the overall hiring process to ensure that candidate experiences are positive since it can have a tremendous impact on whether a professional applies to future jobs with your company. An ATS can help recruitment teams streamline hiring from end to end so that qualified applicants are not lost during the process. With Manatal, users can fill tech job vacancies in about half the average time to fill an IT position.

Challenge #4: Compensation packages are not competitive 

A consequence of the pandemic is that professionals are looking for better career opportunities and jobs that offer them the flexibility to focus on their personal responsibilities. Therefore, to attract the most qualified candidates, companies need to do more than raise salaries. 

Small-and-medium sized businesses (SMBs) especially may not be able to compete with larger organizations from a salary perspective, so it is important to focus on the entire benefits package. As Fairy God Boss notes, competitive compensation packages include benefits such as health insurance, fitness programs, daycare, tuition reimbursement, and retirement plans. 

Challenge #5: Rapidly changing market needs

As technology evolves, the skills that are relevant today are becoming less relevant at a faster rate - and will likely be completely obsolete in the next decade. Recruiters need to stay connected to the needs of their organization and collaborate with functional managers to understand the tech skills that are needed today and will be required in the future. 

A well-planned talent acquisition strategy supported by technology will take these factors into account and make it simpler to source the right talent for an employer’s needs. 

Challenge #6: Identifying the right fit for your organization

Reviewing hundreds or thousands of resumes is incredibly time-consuming using traditional methods. Overlooking a qualified candidate due to human error or innate biases can also deter hiring efforts. Implementing advanced recruitment technology can help recruiters focus their searches on important factors like skills, rather than education, and ensure that the best possible candidates are included in the interview process.

Recruiters and hiring managers must also stay closely aligned on what exactly they are looking for in a candidate. An ATS solution enables recruitment teams to parse through applicants from multiple channels - including existing candidates - in minutes with automation saving valuable time. Recruiters can also save screening information, which allows them to identify and present high-quality candidates to hiring managers faster.  

Challenge #7: Biases in recruitment and hiring

A critical issue in the technology industry is a lack of ethnic and gender diversity. Despite efforts to reverse this trend, women and minorities comprise only 19% and 15% of the UK’s tech jobs respectively. Unconscious bias may be partly to blame for why this issue continues to plague the industry. For recruiters, relying on traditional hiring methods may limit the talent pool they are drawing from for job openings, which further contributes to this reputational issue for the technology industry.

Rewriting job listings to emphasize diversity is an important step toward attracting a less homogenous applicant pool. Implementing an ATS can also help recruitment teams adopt new hiring practices and abandon sourcing methods that do not reduce the presence of bias.

Challenge #8: Poor data utilization

Recruiters may be missing out on crucial opportunities to optimize hiring processes if they are not analyzing their team’s activities to identify issues or duplicate what went well during a successful hiring process. 

A key benefit of an ATS is the wealth of information available to help recruitment leaders understand if their hiring strategy is effective or not and predict hiring trends. 

Challenge #9: Complex processes drawing out hiring

As the competition for talent intensifies, it is important for recruiters to reduce the length of the hiring process and eliminate friction to keep candidates engaged throughout the interview process. 

Losing out on qualified applicants can have a ripple effect over time that can mean lower-quality hires, higher turnover, and more difficulty meeting business objectives. With an ATS, recruiters can take control of the hiring process to simplify and shorten the time it takes to source candidates, conduct interviews, and extend offers for employment.  

Challenge #10: Outdated and ineffective hiring processes

Manual recruiting and screening processes with traditional tools can draw out the hiring process, which may cause qualified candidates to drop out of the process. These traditional methods may also make it easier for the best talent to fall through the cracks or for first-year attrition rates to rise. 

With Manatal, users have the ability to consolidate multi-channel job listings - including your career page with all available job listings - in one place. Its AI capabilities automatically score applicants so that recruiters can quickly see if they are a match for job vacancies.

Learn about how an ATS utilizes automation to help recruiters focus on the most qualified candidates to make hires quickly. Start by signing up for your free 14-day trial and see why Manatal is the right solution for your organization’s tech talent needs.

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