Closing the Tech Skills Gap: How to Overcome Common Labor Challenges

Technology advances fast, while the tech skills gap deepens. Finding the right talent can feel like playing catch up with the future, while trying to predict employees’ next moves. Alarmingly, only 19.6% of technology staff in Asia alone say they want to stay in their current jobs (2023, Superstaff), while globally, 78% of IT, tech, and software employees plan on quitting their jobs within the year (2023, Superstaff). 

Sectors like software development, information technology (IT), and hardware manufacturing are feeling the tech skills gap more than most, as advancements in cybersecurity, cloud computing, and Java demand skilled individuals. 

The repercussions of these labor challenges should not be overestimated when we consider technology’s significant advantages. Gartner reports that 64% of IT executives claim a talent shortage prevents them from adopting emerging technologies

“There is a labor shortage because of the rapid pace of technological change. A continuous skills upgrade is needed.” – Hariharan KP, Head of Service Operations at solverASSIST.

There’s also a dire need for IT support services. Companies are becoming increasingly reliant on digital solutions and don’t hesitate to expand their IT infrastructure, but when technology malfunctions or fails, specialist talent must be on hand to ensure minimal operational disruption.

Hariharan KP, Head of Service Operations at solverASSIST, shares his insights on this volatile landscape and how your organization can stay agile and future-focused. 

What We Cover:

  • Common Labor Challenges in the Tech Industry Today
  • How Labor Challenges Differ Between Large and Small Organizations
  • How Labor Challenges and the Tech Skills Gap Increase Costs
  • The Long-Term Implications of Ignoring Labor Challenges
  • How Does Digitization Impact Labor Challenges?
  • How to Tackle Labor Challenges and the Tech Skills Gap
  • Case Study: Solving Labor Challenges and the Tech Skills Gap
  • Can Outsourcing Help to Solve Labor Challenges and the Tech Skills Gap?

Common Labor Challenges in the Tech Industry Today

The skills gap is a painful reality, but it’s not the only hurdle for tech organizations. Hariharan KP breaks down several key labor challenges that companies must navigate:

Diversity and Inclusion. Building a diverse workforce has become a strategic necessity, yet achieving true diversity requires consistent effort and commitment.

Work-Life Balance. The modern workforce demands flexibility. Employees now seek flexible working conditions, including options for remote work and adaptable hours. If employers meet these expectations, they also increase their chances of attracting and retaining top talent.

Health and Safety Concerns. Post-pandemic, there’s heightened awareness and concern for health and safety standards in the workplace. Companies are now expected to implement rigorous health protocols to safeguard their employees.

Aging Workforce. Hariharan KP notes that in many developed nations, the tech industry faces an aging workforce. This demographic shift leads to a gap as experienced professionals retire, and unfortunately, there may not be enough younger workers with the necessary skills to fill these roles.

How Labor Challenges Differ Between Large and Small Organizations

As Hariharan KP notes, large companies have abundant resources that enable them to offer higher salaries, comprehensive benefits, and appealing career development paths. 

Conversely, smaller companies, particularly startups, excel at attracting skilled professionals through more innovative and flexible working conditions – a stark contrast to the sometimes rigid environments of larger firms. These smaller entities often offer equity compensation, which can also be a compelling incentive for talent seeking both financial gain and a stake in the company’s future.

How Labor Challenges and the Tech Skills Gap Increase Costs

Labor challenges significantly impact operational costs for organizations. Hariharan KP highlights one of the primary cost drivers, the skill shortage, which compels companies to invest heavily in training and development to bring employees up to the required competency levels. 

Unfortunately, this often means allocating a substantial budget for training programs or resorting to expensive consultants to temporarily bridge the gap, both of which can escalate costs.

There is also the issue of high employee turnover. Frequent turnover necessitates continuous hiring and rehiring processes, increasing the cycle time and investment in recruitment activities. 

This not only disrupts work but also leads to significant productivity losses. When employees leave, it often takes time before new hires can perform at the same level, reducing productivity and increasing the need for additional resources to maintain output levels.

Finally, to attract and retain skilled workers, companies must offer competitive employment packages and implement effective retention strategies, such as career development programs. While these measures are essential for maintaining a skilled workforce, they further inflate the cost of operations.

Case Studies: How Labor Challenges Impact Businesses

Infosys, a global leader in digital services and consulting, faced skill shortages. This shortage was particularly evident when the company struggled to keep its workforce up to speed with current technologies and get employees back into the office post-pandemic. 

To address these issues, Infosys invested heavily in training programs for fresh graduates. 

However, they miscalculated and the scale of hiring led to excess recruitment and, subsequently, a surplus of untrained staff. This misstep forced the company to initiate reskilling programs for its current workforce and invest in tools and technologies to support productivity and collaboration for remote work.

While necessary for maintaining operations and a competitive edge, these investments increased Infosys’ operational costs. 

The Long-Term Implications of Ignoring Labor Challenges 

Ignoring labor challenges and the associated high costs can have severe long-term implications for businesses. Hariharan KP highlights one of the most significant risks: a decrease in competitiveness. 

Companies that fail to keep up with skill development and technological advancements lose their competitive edge. This is about more than lagging in innovation; it directly impacts a company’s ability to compete in a constantly changing market.

“Labor challenges lead to innovation stagnation, due to the lack of a skilled workforce and high employee turnover.” – Hariharan KP.

Hariharan KP expands on the long-term implications of ignoring labor challenges:

  • High turnover rates tarnish a company’s image, making it an unattractive place for potential talent. This creates a vicious cycle in which high turnover increases operational costs due to continuous hiring and training and reduces the pool of skilled candidates willing to join the organization.
  • Limited scalability means that companies facing labor challenges struggle to expand. These companies may have to put expansion plans on hold as they struggle to manage existing operations with inadequate staff. 
  • Deterioration in service quality can lead to customer dissatisfaction. Unsatisfied customers are likely to seek alternatives to your services, leading to a loss of business. 

How Does Digitization Impact Labor Challenges?

Hariharan KP considers job automation one of the most significant impacts of digitization. Advanced technologies, particularly automation, have replaced many routine and mundane jobs and reduced the demand for certain human skill sets that machines can now fulfill. 

However, as Hariharan KP points out, digitization isn’t just about job displacement; it also creates new job categories. For instance, roles like Prompt Engineer, unheard of in the past, are now emerging as critical components of the modern workforce. These new roles highlight the need for continuous upskilling.

Furthermore, digitization has enabled significant advancements in remote working capabilities. This change has expanded companies’ talent pool, allowing them to recruit from a global workforce without the geographical constraints that previously limited hiring. Such flexibility is invaluable in finding the right candidates and can lead to more diverse and skilled teams.

Digitization has also improved productivity tools that help measure and optimize work processes. These tools increase the speed and value of output and improve how teams collaborate. Digital tools have made it possible to conduct what used to require in-person meetings virtually. The results are lower costs and greater efficiency.

How to Tackle Labor Challenges and the Tech Skills Gap

“Create a strategic plan using data analytics to predict future skills and labor needs and continuously reorganize your organization,” says Hariharan KP. “This can keep you ahead of the curve.”

Automation and Digitization

Hariharan KP advocates for more automation and digitization. By leveraging technology, your company can accomplish more with fewer resources, streamlining operations and reducing dependency on a large workforce. 

This approach can be particularly effective in areas where repetitive tasks can be easily automated, allowing human workers to focus on more strategic and creative tasks.

Diversify Talent Sources

You can tap into a rich reservoir of unique perspectives and skills by recruiting talent from various cultural, geographical, and professional backgrounds. This diversity fosters a creative synergy, leading to more three-dimensional discussions and a broader range of solutions to challenges. 

Such inclusivity can also expand your company’s understanding of different markets. This becomes valuable as you develop and execute global strategies.

Upskill and Reskill

Did you know that 91% of IT and tech employees expect more learning and training opportunities from their ideal employers (Superstaff)? So, why not implement regular upskilling and reskilling programs to keep your employees at the forefront of industry developments, thereby maintaining your company’s competitive edge and increasing employee satisfaction?

Create a Positive Work Environment

If you want to attract and retain skilled employees, establish a work culture promoting work-life balance and inclusivity. A positive work environment enhances employee satisfaction, which consequently boosts engagement and productivity. 

Case Study: Solving Labor Challenges and Addressing the Tech Skills Gap

Hariharan KP applauds Google for its proactive approach to talent development and retention. Google doesn’t hesitate to invest in training programs and offer appealing employee benefits; the result is a highly collaborative and engaging environment that attracts and retains top talent.

Other examples include: 

  • Microsoft has prioritized work-life balance and remote work adaptations, including initiatives like the virtual commute, to create an environment where employees can thrive both personally and professionally. This contributes to higher job satisfaction and retention rates.
  • Salesforce, renowned for its high employee engagement and satisfaction levels, aligns individual employee goals with the company’s objectives. Their culture emphasizes serving the world, instilling a sense of purpose and fulfillment among employees, which translates into heightened productivity.
  • Zappos exemplifies a corporate culture focused on employee happiness and exceptional customer service. Zappos ensures that its workforce is genuinely engaged and committed by offering a culture-fit bonus to employees who choose to leave after their initial training period.

“Upskill your workforce and support employees’ work-life balance by having a diverse talent pool. These are effective strategies for mitigating labor challenges.” – Hariharan KP. 

Can Outsourcing Help to Solve Labor Challenges and the Tech Skills Gap?

Outsourcing can help address labor challenges. One key advantage, says Hariharan KP, is cost reduction. By outsourcing certain functions, companies can lower their operating expenses, as they no longer need to invest in skilled labor or infrastructure. This allows them to focus resources on core business activities.

Outsourcing helps distribute and mitigate risks, too. Your company can offload non-core functions to its outsourcing partners, reducing the burden of massive investments in infrastructure and staffing. This not only minimizes risk exposure but also increases operational flexibility.

Are you facing labor challenges? Perhaps tech skills gaps? We understand how these challenges can drive up costs in your organization. 

At solverASSIST, we have the right staff and technology to improve customer experience and revenue.
Contact us for a free consultation. We’d like to hear about your company’s needs.


Gartner. (2021, September 13). Gartner survey reveals talent shortages as the biggest barrier to emerging technologies. 

SuperStaff. (n.d.). Top 15 global IT labor shortage statistics. Retrieved from 


Hariharan KP serves as Head of Service Operations at solverASSIST. He is an experienced business executive with years of experience in driving top-line and bottom-line growth for businesses across geographies. He also has decades of experience in the international shipping and logistics industries. 

Prior to solverASSIST, Hariharan worked with P&0 Nedlloyd, Maersk and Agility Logistics. He has a strong track record in developing new digital assets, marketing in the digital world, and converting opportunities into business service partnerships. 

Hariharan is known for his ability to inspire teams to deliver consistent and standardized service delivery, and a strong data-driven and technology-focused approach has helped him deliver successful business transformations and customer service projects. 

His skills include project management, IT services management, data science and analytics.

Connect with Hariharan on LinkedIn.