Three Ways Companies Can Cope with the AI and Analytics Talent Crunch
With inflation in the United States at a 40-year high and unemployment near a 50-year low, these are tough times to attract and retain employees in just about every sector. When you add the growing demand for talent in high tech sectors like big data and AI, you get a job market that’s great for these workers, but tough for companies.
Whatever you call it – the Great Resignation, the Great Reshuffle, or the Global Talent Shortage – there’s no denying that employers are under the gun when it comes to keeping skilled workers. Companies are scrambling to fill open positions in data and AI, let alone creating new ones to handle additional data and AI projects. This is causing employers to take drastic measures to keep up with the Joneses.
Here are three ways companies are dealing with the talent crunch:
1. Increase Pay
This is probably the most obvious solution to attracting and retaining AI and analytics staff–but also the most painful for companies. With inflation currently at 8.3%, employees have a great excuse to seek higher pay, even if it results in higher costs and more inflation down the road. And with so much churn in the labor market—nearly 48 million people quit their jobs in 2021–the conditions are perfect for them to get it.
Some tech firms are taking drastic measures. Microsoft for example is doubling its budget for employee salary increases, according to an article in Bloomberg. With the starting salary for a new engineer estimated to be around $160,000 per year, that is no small chunk of change for the second largest American company by market capitalization.
The move will help Microsoft to keep up with other tech giants eager to poach talent, including Amazon, which recently announced it’s doubling the maximum base salary for employees from $160,000 to $350,00 per year. That will certainly help to attract people who are looking for new jobs, which according to a recent survey accounted for 44% of all workers.
Companies will pay significant sums for coveted positions. According to a 2021 survey Hired conducted for its 2022 State of Software Engineers study, NLP engineers made an average of about $160,000 per year, machine learning engineers earned about $158,000, and data engineers grossed about $156,000.
The good news (for employers) is that salaries for these positions were flat relative to 2020. The biggest increase? Security engineers, which saw a 7.6% bump in salary to about $165,500.
2021 salaries may have been flat because they are a lagging indicator, according to the 2022 Dice Tech Salary Report. These high-growth and high-value occupations may “begin to see an uptick in early 2022 and throughout the year,” it suggested.
However, the odds of a recession have grown in recent weeks, as inflation takes a toll on consumer spending. That has led to speculation that the hiring binge will begin to slow. A spokesperson for Meta (parent company of Facebook) told CNBC earlier this week that the company was “slowing its growth” in hiring.
A recession would be painful for a lot of people and firms, but it likely would cool demand for tech talent.
2. Improve Benefits
Not too long ago, amenities like ping pong tables, bean bag chairs, and on-site chefs were enough to lure the best and brightest to tech startups. These days, folks are looking for something a little bit different, with a flexible working arrangement being near the top.
Interest in jobs that allow workers to work from home is quite high. According to a post to the LinkedIn Talent Blog last month, remote jobs accounted for 20% of all job postings on LinkedIn, but accounted for 50% of all applications.
The message was crystal clear to Greg Lewis, the blog’s author: “As many companies seem eager to return workers to the office, candidates are sending a strong message that many of them would prefer to work remotely.”
Data from a recent Pew Research study bears this out. Since 2020, the reason that people work from home has changed, the group says. During the early days of the pandemic, working from home was a matter of survival for the company, but not anymore.
“Today, more workers say they are doing this by choice rather than necessity,” Pew writes. “Among those who have a workplace outside of their home, 61% now say they are choosing not to go into their workplace, while 38% say they’re working from home because their workplace is closed or unavailable to them.”
For employers looking to satisfy a fickle workforce, allowing employees to work from home at least a few days a week could help keep them on the payroll–for at least a little longer.
3. Leverage Automation and Outsourcing
It’s long been observed that as technology improve, it displaces human workers. We’ve seen this play out many times, including with the armies of clerks 100 years ago who manually tracked company spending on paper, only to be replaced with those Hollerith Tabulating Machines.
Fast forward to 2020 and the worst viral pandemic in decades, and automation is continuing to take over potentially dangerous jobs. For instance, toll booth operators for the Carquinez Bridge in the San Francisco Bay Area were replaced with FastTrak tags, displacing hundreds of workers, according to this story in Time.
In the world of analytics, the rise of self-service tools and techniques is helping to democratize data, but could it also make a dent in the hiring shortfall? According to Dice, which tracked a 11.5% increase in data analyst salaries from 2020 to 2021 (to about $85,000), the answer is yes.
“For instance, numerous data-analytics apps allow employees of all backgrounds to crunch their organizations’ databases for key insights,” Dice wrote in its recent salary survey. “While these tools won’t replace a highly specialized technologist, they’re a good way to streamline other employees’ workflows. With tech unemployment low and hiring managers having difficulty finding key talent, some organizations may be holding off on hiring some roles and relying on stopgap measures (and tools) instead.”
Outsourcing also remains a possible tool to help companies through the Great Reshuffle. While it’s not really possible to outsource high-valued, strategic positions like data scientists, relying on business process outsourcing (BPO) providers to fill in for other positions can help companies free up resources and personnel to direct to the problem areas, which may include data and AI.
David Rickard of the Everest Group, a respected provider of insight for the global BPO industry, says that while countries like India have a lot to offer now, there are some other locales that should be on your radar, including Africa.
“We talk about doubling down in India for the next three to five years in terms of looking for the talent, because they’ve got the talent now,” Rickard tells Datanami in a recent interveiw. “But boldly go where no one has gone before and actually consider Africa as a long-term potential solution as it matures more and as people are coming into the workforce who are educated from an IT perspective.”
Africa has a lot of things going for it, Rickard says. First and foremost, while the pipeline for workers entering the workforce in the future is shrinking in many developed countries, it’s actually getting bigger in Africa. “If you look at the population in that 10 to 14 age range and the 15 to 19 age range, we’re talking about over a billion people coming into the workforce over the next few years,” he says.
Everest Group ranks the countries across various criteria, including infrastructure, safety, security, economics, digital readiness, and quality of life, Rickard says. “But then also we assess, what’s the standard of English?”
Tech giants are already investing in the leading countries. For example, Microsoft is investing in Rwanda, Rickard says, and Google is also making investments. In addition to Rwandan, other East African countries on Everest’s list include Kenya, Mauritius and Uganda. In West Africa, Ghana and Nigeria are good sources of workers from a BPO perspective, while in North Africa, it’s Egypt, Morocco, and Tunisia. South Africa also makes the list.
Rickard specializes in call center work, which is slightly different than IT work. But both require good education and English proficiency, so there’s some possibility that Africa could play a bigger role in data work in the future.