Biggest HR Challenges in the Tech Industry [& Solutions]

In tech, where success is often defined by constant innovation, there’s a push for HR managers to become transformational leaders who drive competitive advantages. In fact, 86 percent of tech-sector HR executives believe their roles are becoming more strategic.

Part of becoming more strategic means learning how to address the biggest HR challenges in the tech industry. We’ve listed some of the most pressing issues below, as well as suggestions for how to solve them.

1. Recruiting Top Talent

Google, Apple, HubSpot, Thumbtack, the list goes on—there are large, medium, and small tech companies left and right. How do you level up your recruiting game when everyone is vying for the best candidates?

According to Indeed, 86 percent of tech firms name hiring talent as a major challenge for HR teams. From 2016 to 2019, tech employers were only able to hire six people for every 10 open tech roles. While we have yet to see the long-term effects of the COVID-19 pandemic on recruiting in the tech industry, making your company stand out among the rest is still important to hiring the best candidates.

This means more than just offering free food, gym sessions, and high salaries; perks like these are becoming the norm. So, what can you provide that will rise above the noise? Two things: purpose and meaning. The good news? Both are free. But the downside is that neither purpose nor meaning is available for purchase.

The Solution: Find and Communicate Meaning.

Top tech candidates often want to connect their jobs to a greater good. Earning a high salary is nice, but what is the larger impact of their work?

Psychologist, educator, writer, and all-around renaissance woman Wendy Ulrich explains that when there’s a connection between what a person highly values and what they spend time doing, that connection creates meaning. However, this link isn’t always obvious. Leaders, especially HR leaders, can help employees and candidates make that connection with their work. According to Ulrich: “Leaders are in a great position to articulate the values a company is trying to enact and to shape the story of how today’s work connects with those values. This means sharing stories of how the company is making a difference for good in the lives of real people, including customers, employees, and communities.”

Try refining your recruitment process by asking the following questions about each open position:

• Why does this role exist? How does it fit into the company’s mission and values?
• What types of long-term results does this role contribute to?
• Why should current and prospective employees want to take on this role—or even join the company at all?

Rishon Blumberg, co-founder of 10x Ascend (a business that negotiates compensation packages for tech leaders), has noticed that more tech workers are prioritizing companies that offer initiatives aligned with their interests and goals rather than just a high salary.

As you work to identify how to position your business, take some time to reflect on the points above and discuss them with your team. Because these questions require you to understand your people’s skills, strengths, and goals, don’t hesitate to reach out to current employees for input. They can help you craft a clear meaning behind each role to communicate to prospective candidates.

2. Preparing for Artificial Intelligence (AI)

The AI market is predicted to grow to 190 billion dollars by 2025, and 74 percent of HR leaders believe they have a leading or supporting role in these AI initiatives. When AI is integrated into the workplace, HR professionals must find ways to balance human creativity with machine learning.

Integrating AI requires analyzing how employees’ roles will evolve in the coming years due to new technologies. Doing this helps employers to prepare their workforce accordingly and stay competitive. But will HR teams be ready?

Despite the optimism around AI and its potential to boost business performance, 45 percent of tech HR executives believe preparing for AI will be their biggest challenge over the next few years. After all, shifting an entire workforce is no small feat; it’s a process of trial and error, and it won’t happen overnight.

The Solution: Gather Data

AI will bring with it many growing pains and unknowns, which is why employers should start planning for this transition as soon as possible. They need plenty of time to experiment, learn, iterate, and improve before AI is fully integrated into the company’s day-to-day routines. A reported 55 percent of HR professionals expressed that they’ve started introducing AI to their staff, so the process has already begun in many organizations.

The key is gathering adequate information and data to establish agile strategies. The information-gathering phase might look like:

• Assessing how teams currently fulfill their roles. This can help you identify where AI can help. Are there any manual tasks that could be simplified through AI? You can send out surveys and have direct conversations with staff members to receive suggestions and feedback.
• Assessing how competitors operate and how AI might impact their workflow. How can AI affect the market and your business? Use these findings to help craft flexible plans that will help you streamline your business without losing touch with your people, your values, and your goals.

Understanding this information will help you determine how much AI training your workforce might need to get up to speed, as well as how to best leverage AI without limiting human creativity and innovation.

3. Maintaining Cutting-Edge Skills Amid Generational Divides

By 2022, at least 54 percent of all employees will need new training in digital skills. What’s more, the same KPMG report found that leaders of different generations believe in different approaches to this issue.

While millennial leaders believe that reskilling existing employees is as crucial as recruiting new ones, most older leaders believe recruiting new and already skilled employees is more effective. These differing opinions can lead to conflict and pushback among staff, which makes moving the company forward a significant challenge.

The Solution: Collect Data and Emphasize Soft Skills

HR managers can help their individual organizations determine the best strategy for their needs. Start by considering both reskilling and recruiting new employees, and collect data over time to see which avenue provides the best growth and ROI.

This may vary between positions as well. For example, it might be more cost-effective to retrain a customer service representative because you’d have to train new hires on your specific products and processes anyway. On the other hand, you might decide to hire a new web developer with more up-to-date skills because you wouldn’t otherwise have the time or resources to train someone in that role.

As you go through this process, share these findings with your people. This can help promote transparency, trust, and teamwork, and your leaders will feel confident that their plans are backed by data.

During your internal training sessions and recruitment process, be sure to emphasize creativity and emotional intelligence—these were the top in-demand soft skills of 2020. Training and recruiting people with creativity and emotional intelligence can encourage employees to work together to overcome challenges rather than take a divided approach.

You can refocus recruiting and training on soft skills by:

• Asking candidates to share how they handled a previous mistake
• Asking candidates how they take feedback/criticism
• Training managers on how to model appropriate behavior
• Training staff on how to provide and accept feedback
• Providing assertiveness training
• Training teams on how to use creativity to handle conflict and merge ideas

Finally, remember that digital skills are only one part of an employee’s tool belt. Don’t forget that more experienced employees have skills those from younger generations may not have developed yet.

4. Managing Turnover

Turnover is a major HR challenge in the tech industry, and there often aren’t enough skilled workers to fill the gaps. For example, the UK tech industry alone faced 600,000 vacancies in 2018.

Unfortunately, the industry has built a notorious reputation for having a toxic work culture. Long hours are common. As creator of the programming language Ruby on Rails and cofounder of communication software Basecamp David Heinemeier Hanson writes: “There’s an ingrained mythology around startups that not only celebrates burn-out efforts, but damn well requires it.”

This mythology certainly shows in the stats—more than half of tech workers say they would quit their jobs in exchange for a better work-life balance.

The Solution: Encourage Better Work-Life Balance.

Retaining great employees is easier than recruiting new ones to fill empty seats, so be proactive with your culture. Instead of simply emphasizing a “work hard” culture, encourage a top-down “work smart” culture to establish a better work-life balance.

You can do this by training and motivating the executive team to focus on tasks that bring the biggest long-term impact. Executives can then train their employees on how to approach their work more effectively.

This training might involve:

• Discovering what employees are most passionate about and finding ways to invest more energy and time into those efforts.
• Identifying work that should be delegated or outsourced. AI can potentially take care of these tasks so staff members can have more time to work on their most essential projects.

Keep in mind that work-life balance can include several different elements. For example, when employees were asked what helps them achieve work-life balance, here’s how they responded:

• Flexible work schedules: 44 percent
• Generous vacation time or sabbaticals: 33 percent
• Telecommuting/work-from-home options: 12 percent
• Health and wellness tools or programs: 8 percent
• On-site services like daycare, food, gym, etc.: 2 percent
• Paid parental leave: 1 percent

Ask your employees for their input via surveys to personalize work-life balance initiatives. Through reporting software fromBambooHR®, you can easily track this data to make informed decisions.

Stay Ahead with BambooHR

Remember, as the tech industry continues to progress, so must HR. With new technology and processes, HR leaders are the glue that keeps their people involved every step of the way. Each of these HR challenges in the tech industry presents learning curves, but with guidance and the right HR technology, your organization can face the future with confidence.