As hiring freezes and layoffs hit, tech teams struggle to do more with less

Nearly half of tech workers say they’re feeling the impact of hiring freezes and layoffs on their workloads as businesses attempt to balance cost efficiencies with filling skill gaps, according to Pluralsight’s 2023 State of Upskilling report.

Pluralsight also found that more companies are looking to internal upskilling as a means of closing growing talent gaps and meeting strategic business goals.

The training platform’s blind survey was of 1,216 tech workers, tech leaders, and Human Resources (HR) and Learning and Development (L&D) directors in the U.S., U.K., India and Australia.

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Tech teams are burdened with more responsibilities

According to Pluralsight, 47% of tech workers have had to take on responsibilities outside of their regular role as a result of workforce reductions in their organizations.

The report found that technology leaders are also being required to do more with less, with 65% of tech managers surveyed reporting that they had been asked to identify cost efficiencies that placed an additional burden on their teams.

SEE: Business leaders’ expectations for AI/ML applications are too high, say chief data officers (TechRepublic)

More than two-thirds (67%) of technology leaders surveyed by Pluralsight agreed that hiring freezes and layoffs across IT, software and data teams had resulted in their teams taking on more responsibility. Despite this, 85% of respondents to Pluralsight’s survey said their organization was either actively engaged in, or planning, a digital transformation project in 2023.

Return on Investment (ROI) of upskilling vs. hiring

According to research by the Society for Human Resource Management, the average cost per hire was $4,700 in 2022. However, the true cost is “closer to three or four times the position’s salary” once additional expenses around hiring are factored into the equation.

Pluralsight found that 55% of tech managers and 47% of HR directors spent no more than $5,000 per employee per year on upskilling and reskilling, making it a potentially cost-effective alternative to hiring external talent.

Indeed, 97% of HR and L&D directors surveyed by Pluralsight said they were prioritizing upskilling existing staff over hiring for open roles in 2023. Likewise, 72% of tech leaders said they planned to increase their investment in tech skill development in 2023 to “equip overwhelmed employees with the tools needed to conquer these new and unfamiliar responsibilities.”

Gary Eimerman, chief product officer at Pluralsight, said businesses increasingly recognized the need to balance investment in skills with areas of the business that returned a more immediate ROI — such as sales — as well as the need to prioritize profits.

“Keeping employees proficient in the latest technologies allows them to innovate and sharpens organizations’ competitive edge on the global stage,” Eimerman told TechRepublic.

“This will quickly provide its value in terms of ROI and demonstrate why a firm shouldn’t pull funding for employee learning.”

Skills gaps in these three key areas

While companies appear to be investing in employee upskilling, Pluralsight’s study questioned whether organizations were effectively mapping these to business objectives.

Cybersecurity, cloud and data science were identified as the three most important disciplines for driving business value in 2023, the survey found. Tech managers report the highest rates of attrition across IT manager, security engineer and software developer roles.

Despite this, only 17% of tech workers reported they were “completely confident” in their cybersecurity skills, while 21% said they were “not confident at all.” Likewise, 21% of employees reported being completely confident in their cloud skills, compared to 17% who had no confidence.

When asked about data skills, only a quarter (25%) of tech staff felt highly confident in their skills, while 8% said they weren’t confident at all.

Barriers to upskilling

There are a number of organizational hurdles holding back employees’ learning and development, Pluralsight found.

For HR and L&D directors, budget restraints and costs were identified as the biggest barriers to upskilling (30%). This was also true for technology leaders, with 15% blaming financial restraints for getting in the way of employee upskilling.

For technology workers themselves, finding time to invest in their own training was identified as the main issue: 42% of workers said they were too busy to upskill, with 18% saying their manager didn’t allow any time during the week to learn new skills. As a result, 21% of tech workers feel pressured to learn outside of work hours.

Upskilling during work hours is worth the short-term productivity hit

Pluralsight found that tech managers worried that giving their teams time to upskill might have “a negative impact on team velocity or productivity,” and as a result didn’t actively encourage their teams to use paid time at work to learn.

However, the report added that giving employees time to invest in their training, address skills gaps and gain valuable growth opportunities are key factors in retention.

“Upskilling during work hours will hinder short-term productivity, and managers often bear the brunt of this stress. But don’t sacrifice short-term productivity for long-term success,” the report said.

“To hold onto your top talent during an economic downturn, you need to continue to invest in upskilling — and actually encourage and enable your technologists to use it.”

Pluralsight recommends that organizations take time to understand their specific business needs and the skills required to deliver on them, as well as ensure investment in training and upskilling to deliver a clear ROI.

From the report: “Without programmatic tech skill development, you may face additional expenses in the form of deployment inefficiencies, security risks and lost customers. To be certain your tech skill development program makes an impact, you need to track metrics tied to goals and outcomes. Only then will you be able to identify wins and make improvements.”

Read next: Report: The ROI of upskilling and other employee learning programs (TechRepublic)