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5 ways the IT skills gap hurts your bottom line

EducationSummary: Despite facing a growing IT skills shortage, many businesses don’t do much to address the issue. Why? They view it as an inconvenience, but don’t understand the true impact it has on their business. In this article, we explore a few big business problems created by the skills gap, and some ways to address the issue.

photo credit: dierk schaefer via photopin cc
photo credit: dierk schaefer via photopin cc

It’s a growing problem. More and more, businesses face an IT skills gap–a shortfall between the supply of qualified IT professionals and the necessary IT skills.

You’ll find plenty of research on the topic. The research firm, Forrester, highlights the issue in a recent article. They find that while 75% of businesses have a digital strategy, only 16% claim to have the skills to deliver it. Another study finds that a whopping 93% of businesses indicate there’s an IT skills gap.

That being said, the availability of statistics on the issue isn’t the problem. Businesses understand the skills gap exists.

The problem: While many businesses understand there’s an issue, they don’t do much to fix it. They don’t take the steps necessary to bridge this skills gap.


For many, they don’t understand the true impact that the skills gap has on their business.

Today, let’s explore the topic from that angle: What does it mean for business? How does it impact your bottom line? Here are a few ways:

1. You lose a competitive edge

Today, technology plays a larger role in the success of a business than ever before. As explained in this article, customer expectations have risen: “Intuitive interfaces, around-the-clock availability, real-time fulfillment, personalized treatment, global consistency, and zero errors—this is the world to which customers have become increasingly accustomed.”

The problem is, most traditional organizations can’t meet these expectations. This is a big reason we’re seeing so much disruption in the business world. Companies built in the digital age can swoop in and disrupt entire industries because the former “market leaders” can’t compete in the new digital world.

As businesses struggle to find the right IT skills, they fall behind. They lose their competitive edge.

“Most large companies embrace an Agile Development Methodology within their IT organizations,” says Tom Hart, Chief Operating Officer at Eliassen Group. “The Agile Methodology focuses on always delivering the greatest business value to the company with scheduled IT initiatives, meaning if an implementation cannot deliver measurable business value (i.e. reduced costs, increased revenue, etc), they are not pursued. Today more than ever before, the inability to onboard any or enough quality IT talent quantitatively results in reduced business value being delivered to the organization, meaning that organizations suffer a loss of competitive advantage or parity, experience increased costs of operations, or introduce fewer business-value solutions through their technology implementations.”

2. You’re forced to rely on (expensive) outside help

photo credit: geralt via pixabay cc
photo credit: geralt via pixabay cc

I’ve seen this problem occur far too often. Companies have no choice but to outsource their development projects to outside consultants because they don’t have the skills in-house.

Now, this a feasible solution for single projects, but it gets expensive quickly if it includes many development projects over a long period of time. Unless these companies bring in new skills, or bring new skills to their current employees, they’re stuck in an expensive trap.

“Only the high profile projects like customer facing applications have people working on them,” says Nic Grange, CTO at Retriever Communications. “These people become off limits to any other work. Often it also means having to bring in expensive external contractors to fill gaps. For example, there is a real shortage of User Experience Designers for mobile applications at the moment and that makes building successful applications really difficult without them. So if you want to be building these applications in-house then you are going to need to budget for expensive design consulting agencies each time.”

3. You lose business

What happens if you don’t have the skills to meet customer demand? What happens if you can’t meet their expectations? You lose business.

It’s a problem faced by all types of companies. For instance, I’ve seen some companies lose customers because they weren’t keeping up with the competition from a technology aspect. If your competitors offer online ordering, and you still take orders by fax…who looks more attractive to a prospect?

Or, as explained below, it’s an especially important problem for IT services companies. Without the right skills, they may have to turn business away.

“If IT roles sit unfilled, we become resource constrained,” says Sue Klumpp, Senior Director of Operations at BrainJocks. “Prior to hiring our most recent additions to the development team, we contemplated turning away business because we simply didn’t have the capacity to meet a client’s needs. Thankfully, we were able to get people on board in time to avoid the worse-case scenario.”

4. You put stress on current employees

photo credit: geralt via pixabay cc
photo credit: geralt via pixabay cc

What happens when you don’t have the skills or manpower to meet your needs? The pressure usually falls on your current employees. They’re asked to handle tasks above and beyond their job description and/or skill level–a problem that adds stress to their jobs.

What happens when your employees are stressed? As mentioned in this article, they become less productive–a problem that only complicates the issue. And, if that stressful environment persists, you risk losing your existing employees. As explained below, it’s important that you recognize this fact and work to keep your employee stress level manageable.

“The current development and technical team feels the stress of near-term deadlines and looming start dates for new projects,” says Klumpp. “We work hard to be a great employer so it’s very important for us to make sure our team consistently has a positive experience, manageable stress level and good work/life balance.”

5. You don’t get full value out of your technology

Another problem occurs when you ask employees to handle tasks above and beyond their job description and/or skill level: You don’t get the full value out of your technology. After all, the employee placed in charge of that technology isn’t an expert on it. They don’t know all the ins and outs. In most cases, they just keep it running.

This can create a host of problems, ranging from lost opportunity to lost revenue. For instance, here’s one example of how this problem led to massive losses for a company.

“A web development firm had repeated security breaches to their customers’ web sites,” explains Jeff Huckaby, Found of rackAID, LLC. “The breaches were avoidable but lack of automated maintenance and monitoring meant they were in the dark. As their customers sites were hacked, they scrambled to find fixes.

One developer spent half of his day fixing sites and the other half apologizing to customers. Soon, this started hitting the bottom line with customer cancellations, delayed projects and lost opportunities.

They could have avoided this with a web application firewall service costing just $300 per month. Instead, they were spending over$1500 per week in labor and lost billable hours firefighting.

Their lead developer was unaware the cost of such services had plummeted in recent years. Or that their hosting operations could easily be put into such a solution. So not knowing, cost them $1000’s instead of $100’s.”

What can you do about the skills gap?

Here’s the big question: What can you do about this skills gap? Hopefully, you now have a better understanding as to the importance of the problem. It’s not a minor issue that you can afford to ignore. It creates business problems that impact your bottom line.

So, if your company faces a skills gap, what can you do? What if you can’t find, or can’t afford to bring in the necessary skills? What are your options? While we’ve covered a few ways to bridge this skills gap in a past article, here are three important steps you can take:

1. Educate your current employees: If you can’t afford to bring in new skills, set up education programs so your existing employees can learn the necessary skills. It’s not a quick fix, but it pays dividends long-term.

2. Bring new skills to your employees: What happens if you need skills that take years to master? What happens if you need modern solutions today, but don’t have the time to train your employees? In these instances, you can bring modern skills to your current team in the form of software tools. For many tasks, you can find tools that help you bridge the skills gap, and bring modern skills to your existing team.

3. Turn to a cloud service: Some tasks require so much time and expertise, you may find that it’s actually cheaper to outsource a specific function to a cloud service. As explained below, this saves time and lets your employees focus on more important tasks.

“There are a lot of businesses that look to fill this skills deficit – and this is not new,” explains Andre Preoteasa, IT Director at Castle Brands. “But what is new is that these companies use cloud services.”

“For example, I manage my company’s traditional phone system, in which I am not trained, experienced, knowledgeable in nor am I motivated to fully understand and administer a 20th century copper telephone system. To fill that deficit I have hired a company to manage it. They get it done quicker (saves company down time), better (the company uses the true value of the system) and allows me to focus on what I’m good at (that is, I spend time on what matters to the company that I can do more productivity).”


Now, these are just a few ways the IT skills gap hurts your bottom line, but the list could go on. If you would like to add anything to this list, I’d love to hear it. Feel free to share in the comments.