AI drives largest tech skills shortage in 15 years: Harvey Nash
LONDON, UNITED KINGDOM — A new global report from Nash Squared and Harvey Nash reveals that artificial intelligence has triggered the world’s most severe technology skills shortage in over 15 years.
The 2025 Digital Leadership Report, which surveyed 2,015 technology leaders worldwide between December 13, 2024, and March 26, 2025, found that AI has surged from the sixth to the most scarce tech skill in just 18 months. It is the steepest rise in any technology skills gap since the survey began tracking such data in the late 1990s.
The proportion of technology leaders reporting an AI skills shortage has nearly doubled, jumping from 28% to 51% since the previous report, an 82% increase. In comparison, the next largest jump in a tech skills shortage over the past 16 years was just 38% for Big Data.
Investment surges, but ROI remains unclear
The report links this skills crisis to a dramatic increase in AI investment. Currently, 90% of global technology leaders say they are piloting or investing in AI, up from 59% last year.
Despite this, 67% of leaders admit they have yet to see measurable returns from their AI projects. Larger organizations, however, are more likely to report success: over half with tech budgets above $500 million have achieved a measurable return of investment (ROI) from AI initiatives.
Boards are backing AI-driven spending, focusing on business cases tied to operational efficiency and growth. While technology budgets have softened from pandemic highs, 39% of leaders still expect their budgets to rise this year.
AI shifts hiring and skills demand
Contrary to fears of job losses, the report finds that organizations leading in AI adoption are 24% more likely to be increasing their tech headcount, especially in AI and data roles.
Tech leaders predict that one in five technology jobs will be fulfilled by AI within five years. However, AI is not simply replacing workers—it is changing the types of roles organizations need.
Moreover, 65% of tech leaders would prefer an AI-enabled developer with two years of experience over a five-year veteran without AI skills.
Bev White, CEO of Nash Squared, commented, “As AI continues to accelerate, the scale of the skills challenge is becoming clear. Businesses have a pressing need to ensure their technology teams are equipped with the skills to leverage AI to full effect, or the implementations they are making could fall short.”
Cybersecurity, diversity, and pay trends
The report also highlights a resurgence in demand for cybersecurity skills, a decline in software engineer shortages, and a rise in major cyberattacks.
Diversity and inclusion efforts remain strong, but gender parity has stagnated, with women making up just 23% of tech teams and only 13% of leadership roles.
AI-focused organizations are also seeing higher pay for tech leaders, with those leading large-scale AI implementations more likely to receive significant salary increases.
Andy Heyes, Managing Director at Harvey Nash, concluded: “AI is front and center of most organisations’ technology plans… Rather than killing jobs, AI is changing them and creating new working models.”
