The unemployment rate for technology occupations fell to 1.5% in July, marking a two-year low close to the lowest historic mark of 1.3% set in in May 2019, according to a CompTIA review of U.S. Bureau of Labor Statistics (BLS) data.
Sector unemployment fell from 2.2% in June, and contrasts with the national unemployment rate of 5.4% in July. Companies in the tech sector added 10,700 positions last month, as IT occupations in the overall economy expanded by 178,000.
Nationally, job postings for IT positions surpassed 318,500, up by more than 7,000 from June. The increase in job postings coupled with the low unemployment signal a tightening labor market where companies will have difficulty accessing talent.
The tech employment numbers spell trouble for organizations with ongoing IT modernization projects. Access to talent can determine how quickly companies replace legacy technologies or deploy large-scale modernization.
For organizations aiming to modernize, the right talent can deliver scale and speed. Without it, companies may struggle to meet expectations. Nearly one-third of C-suite executives say not hiring the right talent was among the top mistakes they made while attempting a digital transformation project, according to an upcoming report from alliantgroup and YouGov.
Scarcity of tech talent leads companies to weigh talent access in their decisions, causing them to become vigilant of project prioritization and resource allocation, according to Tim Herbert, EVP of research and market intelligence at CompTIA.
"This may mean focusing on one or two critical projects while working in smaller secondary projects as labor resources become available," Herbert told CIO Dive in an email. "It may also encourage creative problem-solving … to move projects forward in a way that aligns with staffing and resource availability."
IT leaders list insufficient access to IT resources and a lack of digital skills among employees as the top two barriers to solidifying a digital business, according to Gartner.
Presented with such a tight labor market executives will need to think critically about the factors in their control and how to best leverage them, Herbert said.
"It may not be realistic to recruit from competitors with higher pay alone, but companies do control their corporate culture, flexible working arrangements, the career pathways they offer and related ways to attract candidates," said Herbert.