2023 Talent Outlook for Midsize Enterprises

Published 6 March 2023 - ID G00785459 - 5 min read

By Analyst(s): CIO Research Team

Initiatives: Midsize Enterprise CIO Leadership

Eighty-eight percent of midsize enterprise (MSE) CIOs expect to grow their IT team to support their organization’s digital ambitions. This report summarizes benchmarking data on approaches MSE CIOs are using to execute their talent strategy and meet critical skill demands in 2023.

Overview

Key Findings

Eighty-eight percent of MSE CIOs plan to grow their IT headcount in 2023. In contrast, only 4% of MSEs expect IT headcount to remain flat, and 8% expect a decrease of IT staff from 2022.

■ MSE CIOs report being effective at fulfilling demand for critical skills that are wellscoped and clearly defined, including cybersecurity, cloud and project management. However, skills like business intelligence (BI), analytics and data science remain harder to fill.

MSEs CIOs rely on traditional hiring and upskilling full-time IT employees to fill skill gaps, rather than experimenting with more dynamic ways to meet demand.

Fifty-two percent of MSE CIOs provide flexible work locations and 48% report providing flexible work hours to attract prospective candidates.

Data Insights

Attracting and retaining technology talent has become critical areas of concern for midsize enterprise CIOs. Data reveals that 84% of MSE CIOs report more competition for qualified IT talent. Additionally, 73% of MSE CIOs report being worried about increased attrition rates among IT workers. 1 As such, workforce planning is top of the mind for MSE CIOs to ensure IT has the required skills and capabilities to support the organizations’ digital business plans.

Gartner

Gartner surveyed more than 300 MSE CIOs globally to help CIOs better understand the talent strategies and tactics their peers plan to use for 2023. This report summarizes the key take-aways from the survey and will help MSE CIOs consider alternative IT talent tactics to meet critical skill requirements.

Midsize Enterprise CIOs Plan on Increasing IT Headcount in 2023

As organizations continue to accelerate digital investments, most IT teams plan on increasing headcount in 2023. Seventy-seven percent of MSE CIOs plan to grow their IT headcount in 2023 by at least 10% (see Figure 1). In contrast, only 4% of MSEs expect IT headcount to remain flat, and 8% expect a decrease in IT staff from 2022.

Figure 1: Expected IT FTE Changes in 2023

Expected IT FTE Changes in 2023

77% of MSE CIOs plan to grow their IT headcount in 2023 by at least 10%
n = 307; MSE respondents confident in the ability to report the IT headcount and talent strategy for IT organizations across enterprise

Gartner.

MSE CIOs expect full-time equivalents (FTEs) to do the majority of the technology work (see Table 1). Automation and AI-augmented work account for just over 10% of work by resource. The emphasis on FTEs explains why MSE CIOs plan to increase IT headcount in 2023.

Table 1: Distribution of Work by Resource Type

Across Enterprise % of Work Done by Resource Type

IT full-time employee 56%

IT part-time employee 11%

IT fixed-term employee/contractor 9%

IT consultant 8%

IT gig worker 5%

Automated worker/robot (non-Al based) 6%

Al-augmented worker (e.g., RPAs, chatbots) 5%

n = 295 Q. Considering IT FTEs across your enterprise/of your division,approximately what percentageof technology work is done by each type of resource today,and how do you expect this tochange three years from now?

Source: 2023 CIO Talent Planning Survey

IT Is Effective at Fulfilling Demand for Most Critical Skills

MSE CIOs cite cybersecurity, cloud platforms and project management as the top three critical skills to meet 2023’s enterprise objectives, and report being effective in fulfilling demand for these skills.

In contrast, CIOs report less effectiveness in fulfilling demand for skills including analytics, BI, data science, and artificial intelligence (AI)/machine language (ML) (see Figure 2).

Figure 2: Importance of Skills and Effectiveness of IT in Fulfilling Demand for Skills in 2023

Importance of Skills and Effectiveness of IT in Fulfilling Demand for Skills in 2023

n = 289-316; All MSE respondents excluding "N/A"
Q. How important are skills in the following areas for IT to meet 2O23 enterprise objectives?
following areas?

Gartner

Hiring and Upskilling Are Key Tactics to Meet Skill Requirements in 2023

Hiring full-time employees is the top choice for MSE CIOs to ensure IT has relevant roles and skills to meet 2023 enterprise objectives. Investing in training programs to upskill IT staff was the second key tactic for MSE CIOs (see Figure 3).

Gartner.

Figure 3: Hiring and Upskilling Are Top Tactics to Ensure Relevant Skills

Hiring and Upskilling Are Top Tactics to Ensure Relevant Skills

n = 315; all MSE respondents excluding "not sure"
Q.Which of the following tactics will your IT organization(s) use to ensure it has the relevant roles and skils required to meet 2O23 enterprise

Gartner.

Providing Flexibility Is a Key Tactic to Attract and Engage IT Talent

With hiring as a key tactic to meet skill requirements, MSE CIOs are offering flexibility to define where and when prospective candidates work. While 52% of MSE CIOs report offering remote work among IT staff, suggesting active steps to formalize flexibility, 48% focus on offering flexible work hours or schedules (see Figure 4).

Figure 4: MSE CIOs Focus on Providing Workplace and Time Flexibility to Attract Candidates

MSE ClOs Focus on Providing Workplace and Time Flexibility to Attract Candidates

n = 314; all MSE respondents excluding "not sure"
Q. Which of the following tactics will your IT organization(s) use to attract prospective IT job candidates?

Gartner.

In addition to offering flexibility to prospective candidates, MSE CIOs cite offering flexible work hours and location to existing employees as well to increase discretionary effort and improve retention.

As remote and hybrid work become common practices across organizations, providing workplace and timing flexibility might not be a differentiating factor to attract and retain IT talent. Employees increasingly want flexibility on not just where and when they work, but also who and what they work on. Intentionally planning and marketing growth opportunities and empowering IT staff to pursue nontraditional career paths based on their aspirations could be critical factors to ensure IT has the talent needed to fill skill demands.

Beyond Hiring FTEs: Focus on Dynamic Resourcing to Bridge Skill Gaps

While hiring is important, it is not always sufficient to bridge critical skill gaps. MSE CIOs must tap into a more diverse set of tactics to leverage skills beyond traditional talent pools.

■ Leverage external and temporary sources of talent: Only 28% of MSE CIOs plan to outsource more work to managed service providers, and even fewer plan to use gig workers and contractors to bridge skill gaps. MSE CIOs must tap into a more diverse talent pool and intentionally plan how work can be redirected to outsourcing partners and temporary talent.

■ Redesign and automate workflows: While 35% of MSE CIOs report automating workflows to free up IT time, there’s scope to utilize automation and unlock skill gaps to a greater extent. CIOs must automate processes and tasks that take up IT and business staff time and effort, and improve the likelihood of employees developing the expertise and skills needed to support organization needs.

■ Enable flexible skill sharing: While blending IT-business skills by establishing fusion teams is a tactic that has gained some traction in conversations with CIOs, only 36% of MSE CIOs report creating such teams to bridge skill gaps. Additionally, only 27% use rotations or temporary assignments to reskill IT employees. MSE CIOs should consider the potential benefits of skill sharing across teams and silos and tap into a broader talent pool within the organization.

Evidence

1 2023 Gartner CIO Talent Planning Survey: This survey was conducted to benchmark which skills CIOs plan to prioritize, what methods they plan to use to hire and develop talent, and how digitally mature companies’ plans differ from others. The survey was conducted online during October through November 2022 among 501 respondents from North America, EMEA and APAC region from midsize and large enterprises. Respondents were screened for CIO or senior IT leadership roles with decision-making responsibilities in talent planning strategies.

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Table 1: Distribution of Work by Resource Type

Across Enterprise % of Work Done by Resource Type

IT full-time employee 56%

IT part-time employee 11%

IT fixed-term employee/contractor 9%

IT consultant 8%

IT gig worker 5%

Automated worker/robot (non-Al based) 6%

Al-augmented worker (e.g.,RPAs, chatbots) 5%

n = 295Q.Considering ITFTEsacrossyour enterprise/of your division,approximately what percentageof technology workis donebyeach typeof resource today,and how do you expect this to change three years from now?

Source: 2023 CIO Talent Planning Survey

2023年中型企业人才展望-Gartner 听光Vic