Bridging Talent Shortages in Tech

Executive summary

Talent shortages are a lose‑lose situation for everyone: for firms, they hinder productivity and innovation; for workers, they lead to skills mismatches and reduced job satisfaction; for governments, they reduce competitiveness and economic growth. All stakeholders suffer from lowered efficiency, missed opportunities and heightened economic strain. This is particularly the case in the tech sector, where the demand for highly specialised skills often outstrips the available supply of qualified professionals due to constantly evolving technologies and to unfavourable working conditions for certain groups of workers (such as women and ethnic and racial minorities). Tackling talent shortages in the tech sector effectively requires innovative approaches and collaborative efforts by all stakeholders.

In particular, a skills-first approach to hiring and training can be extremely valuable to address persistent talent shortages. This approach allows companies to adapt more dynamically to changing demands by focusing on the specific skills needed for vacant roles rather than rigid qualifications or experience criteria. The skills-first approach broadens the talent pool by considering candidates with diverse backgrounds, thereby reducing dependency on traditional recruitment pipelines. Skills-first strategies also promote innovation, by valuing workers’ capabilities and potentials, and facilitate reskilling and upskilling initiatives, ensuring that the workforce remains relevant and competitive in rapidly evolving markets. Beyond employers, career guidance institutions and education and training providers can benefit from adopting skills-first strategies. Indeed, by focusing on developing specific skills, training institutions can better prepare individuals for the job market, improving their employability and career prospects. Skills-first approaches also allow for more personalised career guidance, where individuals can identify and pursue paths that align with their strengths and interests, rather than predefined career tracks.

Micro-credentials – i.e. small, targeted learning activities that offer a way for learners to retrain and upskill quickly and efficiently – can also help reduce talent shortages, particularly in the tech sector, by providing flexible and rapid skill development. Micro-credentials allow workers to acquire specific, in-demand skills without committing to lengthy degree programmes, thus quickly filling skills gaps. Employers who can adapt to emerging technologies and industry changes can better benefit from a more agile workforce. Micro-credentials support continuous learning, enabling professionals to remain up to speed with the latest advancements. Partnerships between educational institutions and tech companies can ensure that micro-credentials align with real-world industry needs, further bridging the talent gap.

However, introducing innovative ways of hiring and training may not be enough to fill the large talent shortages in the tech sector if this is not accompanied by a shift in mindset. The tech industry grapples with issues of diversity and inclusiveness. Women, workers of racial and ethnic minority backgrounds, youth, and migrants encounter barriers to entry and advancement in technology careers. Overcoming stereotypes about what a tech professional should look like and fostering a more inclusive work culture is crucial for expanding the talent pool. Both companies and governments play critical roles in these efforts. With the support of civil society, governments can promote a more inclusive tech sector by highlighting diverse role models and removing obstacles to education and training for under-represented groups. Businesses, on the other hand, should focus on fostering a more inclusive work culture to attract and retain highly skilled workers with diverse backgrounds.

To tackle talent shortages in the tech sector effectively, the OECD recommends the following key interventions.

Skills-first hiring

• Employers should adopt skills profiling tools and inclusive hiring techniques for recruitment, develop alternative entry pathways, and tie employee progression to skills while fostering lifelong learning.

• Education and training providers should expand programme delivery options to include shorter, more targeted, modular learning options (including micro-credentials) to improve flexibility in adult learning provision and engage social partners in the design of curricula to ensure their relevance.

• Governments should establish an efficient system for the validation of non-formal and informal learning acquired by workers during their working lives, encourage public employment services to match jobseekers to vacancies based on skills rather than qualifications and introduce effective quality assurance systems.

Micro-credentials

• Governments should develop and adopt a hybrid approach that allows for accrediting both programmes and providers of micro-credentials, create online platforms for users to compare courses, expand funding options to cover short training modules, and integrate micro-credentials into National Qualifications Frameworks and validation systems for non-formal and informal learning.

• Education and training providers should establish internal quality standards for micro-credentials, break down course content to identify micro-credential components, and increase data collection to ensure broad participation and assess training outcomes.

• Employers should collaborate with social partners and training providers to design and deliver demand-driven micro-credentials and encourage workers’ participation by recognising micro-credentials in career development.

Inclusive outreach

• Employers should broaden recruitment pathways by implementing targeted hiring initiatives for under-represented groups, promoting diverse role models, and adopting inclusive workplace practices to support the progression and retention of women and minorities.

• Governments should collaborate with schools to develop unbiased teaching materials and foster inclusive teaching practices, while working with training providers to address barriers to adult learning and expand funding options for training accessibility of minorities and disadvantaged groups.

• Education and training providers should expand delivery options to increase accessibility, partner with employers for post-training work placements, and develop targeted awareness campaigns to reach out to underserved communities.