IT firms struggle with talent gap in cloud deals
BENGALURU, INDIA — The IT industry is facing a significant challenge as the increasing phenomenon of missing “middle employees” in IT firms threatens the success of complex cloud migration projects.
This gap, particularly in middle management and senior executives, has led to a decline in institutional knowledge crucial for customer business, complicating the execution of large deals.
Phil Fersht, CEO of HfS Research, highlights the current turmoil, stating, “There has never been so much movement for client-facing services talent… causing significant disruption.”
This movement is critical as companies strive to maintain executive-client relationships, which are essential for navigating the pressures of cost reduction, cloud migration fixes, and AI innovation.
A joint report by HfS Research and EY also revealed a disconnect in achieving cloud transformation goals. Only 32% of organizations meet their ambitions despite 65% making strategic cloud investments.
The report emphasizes the need for effective management change, a shift to a product-centric mindset, and scaling of devsecops (development, security, and operations) to achieve desired outcomes.
The talent challenge is further compounded by a shift in buying behavior, as indicated by ISG’s report showing a 20% increase in extension and renewal ACV in 2023, contrasted with a slight decrease in new ACV. This shift underscores the importance of retaining talent for handling complex transformation projects.
Hansa Iyengar of Omdia and Mrinal Rai of ISG both point to the opportunities and challenges presented by Global Capability Centres (GCCs) in reshaping the talent landscape.
Iyengar suggests that to counter the talent drain, IT firms must create an “irresistible work environment” that offers flexibility, continuous learning, and non-linear career paths. Rai adds that the focus on enhancing talent within GCCs continues, emphasizing the ongoing hunt for niche skills.
As the IT industry grapples with these challenges, the ability to attract, develop, and retain talent will be crucial for firms aiming to navigate the complexities of cloud migration and digital transformation successfully.
