14 minute read 26 April 2023

Reimagine your tech talent strategy: Talent, not technology, may be your secret weapon

In part two of our findings from Deloitte’s 2023 Global Technology Leadership Study, we explore the complexities of developing a technology talent strategy today and six steps to consider.

Nate Paynter

Nate Paynter

United States

Kat Rudd

Kat Rudd

United States

Tim Smith

Tim Smith

United States

Lou DiLorenzo Jr

Lou DiLorenzo Jr

United States

Erika Maguire

Erika Maguire

United States

Nearly anyone can build or buy outstanding technology, but very few can build, recruit, retain, and inspire an outstanding tech team.

While many tech companies have recently announced major layoffs that have expanded the talent pool, tech organizations still face a competitive talent market.1 In fact, only 13% of employers surveyed say they can hire and retain the tech talent they need most.2 With 72% of US tech employees considering leaving their jobs in the next year, the situation is not likely to get any better.3

The US economy could stand to lose US$162 billion a year in revenue if companies can’t find the right tech talent.4 Yet, less than a quarter of the 1,179 executives surveyed as part of Deloitte’s 2023 Global Technology Leadership Study say attracting and developing talent is a top priority for their tech function. The biggest items on the tech agenda are optimizing business operations, modernizing legacy systems, and improving cybersecurity. And yet, without the right talent, achieving these goals will be that much more challenging.

Now is the time for technology leaders to build an aggressive tech talent strategy and pipeline. It’s not just a matter of filling tech positions. It’s a strategic priority and could even affect the ability of the enterprise to grow.

Consider that more than a third of executives in Deloitte’s Global Technology Leadership Study say technology and tech-enabled services generate revenue for their enterprise. Additionally, more than half say their digital transformation efforts over the next two years will focus on developing new tech-enabled products, services, and/or platforms. And yet, 46% say limited skills, capacity, or ability of the technology function was a constraint in delivering value from these initiatives.

In short, the competition for talent is often intense and very few organizations say they have access to people with the right skills and capabilities to help their company grow. Overcoming this challenge is important; in every market, in every company, people—not technology—are the differentiator.

This article—the second in a series of four around findings from Deloitte’s 2023 Global Technology Leadership Study—explores today’s talent challenges and shares six considerations for building a winning, long-term tech talent strategy.

About the research

As part of this year’s study, Deloitte surveyed 1,179 global leaders, including chief information officers (CIOs), chief technology officers (CTOs), and other senior technology decision-makers. We also conducted qualitative interviews with more than 100 technology executives spanning a range of sectors. They shared their perspectives on talent shortages, data integrity and security, the rise of automation, as well as the reconfiguration of the technology function.

The complexities of developing a tech talent strategy

The talent challenge can be complex, and further complicated by several competing demands. Technology leaders often need to balance their short-term operational goals with long-term transformation projects, for example. Is the talent pool equipped to meet both these competing demands? What about the kinds of skills needed to manage the transition to decentralized architectures and ecosystems, while also bringing greater centralization and process uniformity to the handling of sensitive data?5

And then there is the challenge of culture. In many tech teams, a handful of “rock stars” often coexist with gig/contract workers and others, all working in different environments, from in-person to virtual to hybrid. What happens when a technology officer needs to bring the team together, coordinate approaches, and reward collaboration? And, of course, there’s the complexity of cost: Can the tech function be allowed to compete for talent the way other parts of the organization can?

Talent is often one of the biggest expenses in the tech budget, but is it managed as a cost or as an investment?6 Our view is that spending on talent should have a strategy like any other major expense category. It should require a long-term investment mindset, with the expectation of a return. At the same time, it should be responsive to changes in business demands and competitive outlook.

A tech leader, in short, could think of talent not as a cost but as fuel to achieving strategic outcomes.

Six key considerations for building strong tech teams

In our first article in this series, we described five “archetypes” that comprise great tech teams. As tech leaders develop an integrated talent strategy, six key steps emerge as essential markers for an effective and sustainable approach.

1. Fight for flexibility: Our study found that offering flexible/hybrid work environments was viewed as the top way to retain high-performing tech talent (figure 1)—and tech professionals have come to expect it. In fact, other research shows that 52% of tech talent prefer a remote-first model and a third wish to work fully remote indefinitely.7 Additionally, 46% of tech employees admit they’d consider leaving an organization that stopped offering the flexibility to work remotely.8

“The importance of offering flexibility cannot be understated,” says Joe Weider, senior vice president (SVP) and CTO at Lincoln Financial Group. “When we’re recruiting, as soon as we introduce our hybrid work model, we start to get a lot more interest. In our experience, employees place a high value on flexibility of location.”

This flexibility can offer companies greater access to talent across multiple geographies: “If I need a very, very acute skill and it’s available in country ‘X’ where I don’t have any presence, the big difference today versus, say, five years ago, is I have an option to consider it, whereas it would have been impossible before,” says Patrick Noon, chief information and digital officer at Bechtel.

While the talent needs seem clear, our research also finds that business leaders are more likely to prefer in-person working models. When asked which future workplace models they plan to establish for their tech function, 33% of business leaders say mostly in-person, whereas only 14% of tech leaders say the same. Additionally, whereas 13% of tech leaders say mostly remote would be ideal, zero business leaders say the same.

Navigating these conflicting demands could mean expanding the concept of how technology work is planned, managed, and executed. Consider offering flexible work arrangements, and if your leadership team does desire in-person work, ensure that work is around moments that matter—for instance, team building and coordination that are important to the function—and not around an arbitrary requirement set by someone else. A successful tech leader can then promote the team’s work based on what they accomplished, not where they accomplished it.

2. Promote the meaning and purpose behind the work, not the work itself: In addition to flexibility, top talent is also seeking organizations with a palpable purpose. In our study, creating a compelling mission, vision, and purpose was cited as the second best way to retain high-performing talent.

Additionally, when it comes to attracting top talent, the biggest incentive that draws tech professionals to new job opportunities is the work (54%) they would do in a given role.9 It’s not just a job they want—it’s a job with purpose, and tech leaders are trying to meet that expectation.

“Engineers throughout history built the Great Wall, built the aqueducts and Rome, and the Taj Mahal. They have felt the importance of purpose, and sometimes this gets lost in engineering,” says Diogo Rau, executive vice president (EVP) and chief information and digital officer at Eli Lilly and Company. “It’s pretty simple: Do you want your life’s work to be focused on getting somebody to spend 12 more seconds on a web page, or do you want to use your skills to cure cancer?”

Even for companies that don’t have as big of a societal mission, there is still a way to embed purpose and mission into tech-focused work. Be clear about the challenges tech professionals are helping solve. “It matters that we talk about how exciting the work is and how relevant it is to the purpose of that individual and the overall company,” says Ravi Radhakrishnan, CIO at American Express.

“My talent strategy is very simple,” says Sathish Muthukrishnan, chief information, data, and digital officer at Ally Financial. “Create an environment where every teammate gets to unleash their full potential. So much so that they become rock stars courted by every other company, yet no one wants to leave Ally because they’re doing meaningful and challenging work and growing.”

3. Let talent chart their own career paths: Research has shown that the top reason engaged employees opt to seek out a new job is due to a lack of learning and growth opportunities.10 In fact, 41% of surveyed IT workers cite a lack of career progression as a reason for wanting to quit their jobs.11

One of the hallmarks of the digital era is the value of range—a great digital specialist is likely able to go deep when necessary but will often adjust course to develop new skills when the landscape shifts. Thus, tech leaders are looking to give room to high performers to adapt and learn, depending on where their curiosity and sense of purpose takes them. Instead of trying to build a team of “10x” engineers, it’s better to build a team of “10-job” engineers—serial specialists who can build depth in multiple areas over the course of their careers.12

Reskilling and learning,13 it appears, may be necessary, but even more important could be recognizing the value of multiple career paths to your talent. That means supporting not only their learning and development but also giving them greater insight into their career opportunities at multiple touchpoints, more frequent performance feedback, and greater autonomy and control to shape their careers and teams as desired.

“Moving workloads to the cloud isn’t enough without reskilling and restructuring the entire IT organization,” says Rahul Samant, EVP and CIO at Delta Air Lines. “We’re developing career-journey maps for team members to show them how, through experiential learning, classroom coaching and buddying, we’re going to advance them from here to there. Our message is: ‘Every one of you is an integral part of this journey, and we cannot deliver on our speed-to-market and productivity goals unless we work differently and equip teams with the new skills they need to succeed.’ This is about helping everyone adapt to change and understand how they are contributing to Delta’s transformation.”

Another key approach is to develop alternative career models, especially apprenticeships.14 “Apprenticeships are an important part of our talent strategy,” says Nick Woods, CIO at MAG (Airports Group). “From foundational courses in data fundamentals and network engineering to master’s degrees in data science and business administration, apprenticeships help us develop the skills we need for the future while reducing attrition and improving employee engagement.”

4. Hire for enduring human skills, train for technical skills: Increasingly, softer” skills such as leadership, communication, problem-solving, and collaboration are seen as key success factors for tech teams (figure 2). While tech expertise will likely always be important, these non–technologically grounded capabilities contribute meaningfully to a tech-focused team—and they may be less likely to degrade over time. “What I am willing to do is take a chance on technological skill, not take a chance on personal skills,” says Bechtel’s Patrick Noon. “I know from experience I can fix one a lot easier than I can fix the other.”

With technical skills becoming outdated every 2.5 years on average, hiring for current tech skills may not be a winning long-term strategy.15 Some tech specialists may continue to build their careers on digital depth and specificity, but increasingly, individuals should be evaluated on their ability to lead and be empathetic.

To develop softer, leadership skills with their teams, Ally launched the Ally Leadership program, an internal initiative that brings together 20 to 25 executives from across the organization. “We’ll say, ‘Here’s a problem we’re trying to solve to advance our technology strategy,’ and this cohort will solve for it in the next six weeks while also getting leadership training,” says Ally’s Sathish Muthukrishnan. “These leaders are solving organization-wide problems that they’re passionate about while improving their skills on a daily basis.”

“When engineers ask me what skills they should learn next, they think I’m going to say machine learning or cloud or something along those lines,” says Eli Lilly’s Diogo Rau. “But no. If you could focus on one thing, it’s the basics of empathy.”

Doing so may require a broader set of capabilities and skills that tech professionals have not always been encouraged to build. That’s changing. “We are in a very people-oriented business,” says Delta’s Rahul Samant. “If you want to succeed with us, you care about our customers and your colleagues and have a passion for the mission of connecting people. Balancing EQ-driven skills with technical skills is an imperative.”

5. Be intentional about how you address skills gaps: When it comes to developing the most needed skills for their teams, tech leaders are often more inclined to hire talent with those critical skills or upskill existing talent, according to our study. They’re less likely to hire-to-train or leverage ecosystem partners—people who work for suppliers, competitors, partners, and other contiguous organizations—to fill skills gaps.

For instance, when it comes to cybersecurity and resilience, 31% of executives say they’ll hire talent with those skills and 30% say they’ll upskill existing teams. Only 16% say they’ll hire-to-train and 20% say they’ll look to ecosystem partners.

While no single approach is right or wrong, tech leaders should identify the skills gaps in their organization and then be thoughtful about how to address them.

“We can’t fill the talent gap just by hiring people from outside or using our consulting supplier partners,” says the former CIO of one financial services company. “We need to really grow talent from inside the organization, so we’ve created an internal academy that’s built on this principle of teaching and learning. Instead of bringing trainers in from the outside, we want our own experts to teach our own team members and share best practices.”

Ecosystem partners can provide a valuable, quick, and cost-effective way to “rent” talent and skills as capabilities are built in-house. In addition, tapping into ecosystems can give organizations a chance to recruit from more diverse and representative talent pools.

At the same time, executives should be careful not to outsource entirely to ecosystem partners, no matter how capable. “If we hire really smart engineers and put them on managing projects that are outsourced, I don't think that’s a good use of anybody’s time,” explains Eli Lilly’s Diogo Rau. “We should have engineers do engineering work and let our partners do their work and not try to do stuff that’s in the middle. For the past 15 to 20 years, too many companies would probably say they have people who are spending too much time on vendor management.”

“We firmly believe that to deliver an excellent employee experience we can’t be dependent upon dozens of partners to deliver that experience,” says Marc Berson, SVP and CIO at Gilead Sciences. “So, we are focused on narrowing down to a smaller set of strategic partners. We learned lessons, as I’m sure many did during the pandemic, that there are certain elements of the employee experience over which we simply need to have more control.”

6. Focus on inclusion: Our study as well as our ongoing research on diversity, equity, and inclusion (DEI)16 reveals that tech executives are faced with many competing priorities, and the area that’s often pushed to the bottom of the tech agenda is DEI initiatives. In fact, 30% say their tech function currently plays no role in driving DEI, and only 8% say that engaging a diverse workforce and building inclusive capabilities is an organizational priority. Tech leaders should give DEI the attention it deserves if they want to build an organization talent wants to follow.

Younger workers, especially in tech and other industries, increasingly value diversity and inclusion where they work.17 When looking at this cohort, Generation Z and millennials who are satisfied with their employers’ efforts to create a diverse and inclusive culture are more likely to want to stay with their employer for more than five years.

As a simple matter of attracting a broader range of people to your tech organization, strategies that include diversity and inclusion efforts are important to building a broader and deeper talent pipeline.

Such strategies can be basic—tech leaders could create employee resource and affinity groups focused on diverse communities, for example. Other key strategies could include greater investment in mentorship and apprenticeship programs, more outreach to ecosystem partners who are focused on building tech skills in underrepresented groups, and deliberate efforts to establish working groups to identify and outline how to best meet DEI goals.

“We set up our own DEI steering committee within the technology team,” says Jim Fowler, EVP and CTO at Nationwide. “It’s a team of about 12 associates that get together on a monthly basis, and they have three very clear goals: How do we attract, develop, and retain diverse talent in the tech field? We have also been doing something we call Catalyst for Change sessions. These are designed to be safe spaces for our associates and leaders to share concerns or provide a point of view. Leaders bring small communities together. It might come with an education component, but the real important part is it’s based in constructive conversations and solutions.”

“Building diverse teams should be a priority for every tech leader,” says Gilead Sciences’ Marc Berson. “To further increase the diversity of our organization, we’re rethinking our talent sourcing channels and approaches. We’re particularly focused on earlier career talent acquisition and development programs. These programs range from skills-first hiring, based on identifying roles where a four-year degree is not required, through to college interns and graduate hires, based on sourcing from colleges and universities with more diverse populations. In an effort to support these hires, we offer mentoring programs and first-year onboarding and assimilation support to enable integration into the organization. If we want to build better, stronger teams, we need to open up the aperture for where we find talent.”

While building more diverse teams is vital, it’s also important to prioritize inclusion. This requires building ways for people of all backgrounds and experience levels to feel welcome and appreciated. “We’re focused on creating an environment to really ensure diversity and inclusion where people aren't just equal in numbers or statistics in the company’s metrics, but rather they can really say what they think, be who they are and feel empowered to do their jobs,” says Antti Koskelin, SVP and CIO at KONE.

One way to help ensure inclusion becomes a priority is to establish a sense of accountability among leaders. “Inclusive leadership goals are included in every single one of our managers’ annual performance objectives,” says Mojgan Lefebvre, EVP and chief technology and operations officer at Travelers. “We hold our managers and our people leaders accountable.”

An ROI mindset for a successful tech talent strategy

One common denominator in our conversations with tech leaders is an awareness that talent is not just an input—it is an aspect that has potential to drive lasting value. The upfront investment of resources and time into recruiting, reskilling, retaining, promoting, and inspiring may seem taxing at times, but remember, it’s likely people who will transform your tech function, not the technology.

Consider the management of tech talent like any other tech investment—these are highly valuable people when they are empowered, prepared, and integrated. They may also require ongoing support and tending. This is likely to have a flywheel effect: When people know they’re part of a dynamic strategy to build a highly effective and impactful team, they may be more likely to stay, more likely to refer top people to the organization, more likely to stay focused, and more likely to bring fresh ideas to the table.

Successful tech leaders should therefore focus not only on talent but also on the broader context of work—how to make it purposeful, flexible, productive, and rewarding. Work in the tech space has often been different than in other spaces. But great leaders of tech teams should imagine how the future of work is taking shape, especially in the context of tech-focused teams. Having the right people is key. Giving them a sense of how they can work better and smarter is just as important.

As part of Deloitte’s 2023 Global Technology Leadership Study, we’ve published an article on the evolution of tech leadership roles and the competencies executives need to thrive. In the coming months, we’ll also be publishing two additional articles that will explore how companies can best measure and articulate tech value, and how organizations can adapt their working models to meet the ever-growing managerial and technological complexity of today.

For more insights, read the full report.

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The authors would like to thank Andrew Do, Shay Eliaz, Joe Greiner, Suseela Kadiyala, Anne Kwan, Mark Lillie, Shilpa Maniar, Jonathan Pearce, Ram Ravi, Cindy Skirvin, Ben Stiller, Atilla Terzioglu, Peter Vanderslice, Denise Wolf-Hill, Vicky Wu, and their clients for sharing their inputs and perspectives on the challenges and priorities of tech leaders that enabled the creation of a timely survey and narrative.

They would also like to thank Stefanie Heng, Abhijith Ravinutala, and Kelly Raskovich for seamlessly managing all the operational activity behind this publication and always suggesting ways to improve and create the most impactful content for readers—this would not have been possible without your leadership, patience, incredible attention to detail, and hard work.

Additionally, the authors would like to thank Angelle Petersen and Marc Levy for helping with everything from data collection to data analysis to marketing and communications—and doing it all with such ease and grace.

The authors would also like to thank Caroline Brown, John Low, Noam Neusner, and Cliff Chestnut for their editorial eye; Jim Slatton for always creating intentional, impactful art; Rithu Thomas, Preetha Devan, and Blythe Hurley for their exceptional editorial and production skills; Anamin Gaton for helping us coordinate and schedule dozens of interviews; and Jennifer Rood, Kori Green, Felipe Piccirilo, and Yannick Unterlauf for sharing and promoting these learnings across the firm and beyond.

Finally, the authors would like to thank the leadership team—Lou DiLorenzo, Anjali Shaikh, and Mike Bechtel—for regularly reviewing this content and providing invaluable feedback. Putting this together was a true team effort.

Cover image by: Jim Slatton

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Lou DiLorenzo Jr

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