Persistent Talent Shortage May Hinder Hiring Plans of Technology Companies, New TECNA Survey Reveals

Survey of 1,500-plus executives offers national, regional views on business conditions, investment plans and policy concerns

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Technology Councils of North America (TECNA)

Dec 08, 2014, 10:15 ET

DOWNERS GROVE, Ill., Dec. 8, 2014 /PRNewswire-USNewswire/ -- Technology companies across the country say they intend to hire new staff over the next 12 months, but those plans may be sidetracked by a continuing shortage of qualified tech talent, according to a new survey released today by the Technology Councils of North America (TECNA).

TECNA's third annual National Survey of Technology, Policy and Strategic Issues survey reveals that the perception of the quality and quantity of tech talent has gotten worse. A net 74 percent of technology executives say there's a shortage. Nearly a third categorizes the shortage as significant.

By comparison, in the 2013 survey 69 percent of executives said there was a shortage, with 25 percent calling the shortage significant.

The perception of a tech talent shortage comes at a time when 63 percent of executives say their companies intend to hire new staff over the next 12 months. Three-quarters of small firms (10-99 employees) and two-thirds of medium companies (100-499 employees) expect to add staff over the next year. Smaller percentages of micro firms (57 percent) and large companies (52 percent) plan to do so, as well.

"The skills shortage issue is one that affects technology companies from coast to coast and border to border," said Steven G. Zylstra, TECNA chairman and president and CEO of the Arizona Technology Council. "We're in the midst of a great phase of ingenuity and innovation, and companies are poised to do even more, but the shortage of skilled workers poses a serious threat to their ability to reach their goals."

"TECNA members are committed to doing all they can to ensure there is a sustainable pipeline of skilled new entrants into the nation's technology workforce," said Bob Moore, CAE, TECNA executive director.

Other Key National Findings
Business sentiment: The survey reveals positive momentum in executives' assessment of business conditions and the economy. Confidence in the U.S. economy made the biggest jump year over year, climbing from 56.4 (on a 100-point scale) in 2013 to 63.2 in 2014. Executives are most confident in their own companies (72.2), followed by the tech sector overall (71.9). At 54.6, the global economy had the lowest mark.

The six-month outlook is generally favorable, as well, with 65 percent of firms expecting improvement in their own companies; 47 percent in the tech sector; and 41 percent in the U.S. economy. Enterprise software firms, IT services firms and digital, media, apps and data firms have the highest expectation for improvement in business over the next six months.

Increased investments: Beyond hiring new workers, a significant number of companies have other business investment plans for the next six months. For example, 62 percent say they'll invest in new product and business lines. Just over half plan more spending on advertising and marketing activities.

Growth Inhibitors: Concerns about the impact of the talent shortage registered the biggest jump when executives were asked about factors that could inhibit growth. But levels of concern about other issues either declined (general lack of confidence, government regulation) or held steady (lower margins, downward pressures on pricing, unexpected shock) from the 2013 survey.

Impact of Government: Executives gave low to middling marks when asked to rate how well government represents the interests of the technology sector. At the federal level, 45 percent said poorly or very poorly and 41 percent said "just okay." Both figures are identical to the 2013 survey. At the state and local levels, the 2014 ratings were virtually unchanged from a year ago: 24 percent of executives said poorly or very poorly and 39 percent just okay.

Policy Priorities: More government support for STEM (science, technology, engineering and math) education at both the K-12 and secondary education levels should be the top policy priority in 2015, according to executives surveyed by TECNA. Following closely behind STEM education as an area for policy action is taxation and regulatory reform, cited by 42 percent of respondents.

Regional Breakdowns

Business sentiment is fairly consistent across all four regions, with executives in the West, South and Midwest slightly more confident than their counterparts in the Northeast.
Perception of the tech talent shortage is greatest in the West, where 80 percent of respondents say there's a shortage. The South and Midwest came in at 76 percent each, with the Northeast at 69 percent.
Midwest executives believe their region is gaining momentum as a desirable location for tech startups. The Midwest's self-assessment as a top-tier location increased 8 percentage points over last year – to 28 percent – the largest gain of any region. The West leads the way at 47 percent, followed by the South (42 percent) and Northeast (36 percent).

The 2014 National Survey of Technology, Policy and Strategic Issues is based on an October 2014 online survey of 1,561 senior (C-level) U.S. IT and business executives belonging to one of the regional technology associations affiliated with TECNA. The survey was conducted in conjunction with CompTIA, the IT industry association. The complete report is available at http://www.technologycouncils.org/technology-based-economic-development/national-survey1.html.

About TECNA

The Technology Councils of North America (TECNA) represents 50+ IT and Technology trade organizations who, in turn, represent more than 22,000 technology-related companies in North America. TECNA serves its members and the industry through its strong peer-to-peer network and its regional initiatives to raise the visibility and viability of the technology industry. For more information, visit http://www.technologycouncils.org.

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