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The war for engineering talent

Gavin Christie

Gavin Christie
Nov 13, 2016 09:18

There is a war brewing in the engineering world, and those with the foresight to recognize this impending war for talent are terrified of the threat it poses to the long-term sustainability of their businesses. 

Other engineering consulting business, unfortunately, aren’t even aware that it’s coming. These firms aren’t exactly existing in a state of blissful denial, rather they are too busy just trying to survive the market downturn over the past few years. 

It’s no wonder - business diversification, shareholder returns, cutting costs, winning work, keeping customers happy, managing economic certainty, and delivering with limited resources are some of the challenges occupying the headspace of many executives in the engineering sector.

It’s hard to blame them. These are big, complex issues to address. But I predict that in 5 years these concerns will all take a backseat to one massive pain point: securing the engineering talent necessary to deliver great customer outcomes.

To those of you thinking that it’s a buyer’s market, that there is a surplus of engineering talent from which to source: you’re right. Or rather, you’re right today. But in today’s world, the only constant is change.

The ostrich approach to strategy will kill you

I once held a company strategy workshop in which a board member said, “The mining boom will never stop. There are at least 10-20 years of this to come.” This was 2 months before the GFC, and today the company’s size and revenue are not even half of what they were then. With respect to employee engagement and satisfaction, the situation is probably far worse.

Around the same time, I worked with another company that was just as exposed to the downturn in the mining sector, and they made the hard decision to diversify their offering. They were prepared to walk away from some of the lucrative, high-margin work they’d already been offered because they felt the survival of the company depended upon diversification. Today, that company has enjoyed nearly 10% growth year over year, even despite the downturn.

Simply put, companies whose strategy is to stick their collective head in the sand and pretend the world won’t change are going to have difficulty surviving. If you work for one of these engineering firms, you have two choices: get a new leadership team, or get a new job.

The war for engineering talent is brewing

There are a number of undeniable megatrends that, when combined, will change the way companies secure the engineering talent they need to deliver their work.

Trend #1: The aging population

Think about how many engineers you know who are over the age of 50. Think about how much a typical engineering consulting business relies on them to deliver their service. Think about the leadership, credibility, client management, staff mentoring, and quality control they provide on a daily basis.

What if, as these engineers get closer to a secure retirement, they decide they no longer need or want a traditional work arrangement? What if they decide to pick and choose the work they do, the location from which they do it, and the number of hours they want to work?

Trend #2: The millennial effect

A recent Deloitte research paper found that “Two-thirds of Millennials express a desire to leave their organisations by 2020. Businesses must adjust how they nurture loyalty among Millennials or risk losing a large percentage of their workforces.” This research also found that a perceived lack of leadership-skill development and feelings of being overlooked are compounded by larger issues around work/life balance, the desire for flexibility, and a conflict of values.

I recently met with a senior executive from one of the large global engineering consulting company, and when we were discussing these challenges he said, “We have a bookend challenge with engineering talent.”

Their most experienced engineers are ready to retire, or at least move to a more flexible arrangement. Their young engineers are difficult to retain because their preferences and motivators differ vastly from the way engineering businesses are historically run.

Trend #3: The connected worker

Connectivity, IoT, technology, and communication improvements mean that outside of site-based work, many engineering jobs can be completed from anywhere. In many cases, the only barriers that stop an engineer from working from a beach in Bali or the Bahamas are those placed on them by companies clinging onto antiquated working models.

Trend #4: The rise of peer-to-peer platforms

Forward-thinking companies are increasingly sourcing collective engineering insight from a large number of individuals and recognizing this procurement model as superior.

Uber and Airbnb have disrupted their respective markets based on the fundamentals of crowdsourcing, and they’ve enabled companies to harnesses the creative and competitive spirit of the crowd to solve all manner of problems. This shift in business philosophy will influence future competitiveness, agility, and growth. More engineers are turning sites like kkooeethe world’s first online crowdsourcing website built specifically for freelance engineers and companies seeking affordable engineering services. These platforms offer freedom, increased job satisfaction, and opportunities for consulting engineers to market themselves on a global scale.

The Result: A freelance engineer economy

The combined effect of these megatrends is the rapidly accelerated growth of the freelance worker. Recent Deloitte research into the future workforce found that independent workers make up 34% of the current workforce, and this figure is growing at 20% annually.

Think about that: In 5 years, independent workers will make up 40-50% of the workforce. If half of all engineers choose not to work for engineering companies but work as a independent freelance engineer, what does that mean for the big players in the market?

It’s simple: companies that try to compete for only half the engineering talent will inevitably go the way of the dodo.

The war for engineering talent remains, but it’s a totally different battleground

These emerging trends will present major challenges to business leaders, HR, technology, and engineering project teams. Crafting the engineering workforce of the future will require a deeper level of collaboration because the open talent and freelance economies are rewriting the definition of “talent” to include people in different places under vastly different contracts. This is the beginning of a 21st-century workforce transformation.

A 21st century workforce transformation is underway, and some engineering firms are doing what they’ve always done: burying their heads in the sand and hoping nothing will change.

Forward-thinking engineering companies are already tackling these challenges using new talent options such as kkooee. They are investing time to test these new technologies and remove red tape in procurement and HR to facilitate new types of freelance contracts. They are investigating the ways in which projects can benefit from the agility of freelance engineers to reduce cost and drive schedule.

And they are doing all of this now so they can successfully compete in the global talent ecosystem of the future. 

Comments

Hi Gavin I posted on the same subject last year. The dam is breaking as incumbents are only protected by institutional inertia. They have zero unique value proposition in relation to the working practices of the software industry: where remote working is the norm.

https://www.linkedin.com/pulse/engineering-dead-long-live-d-engineering-...

Hi Gavin. I think you summed things up very nicely above, thank you. Five years ago i saw signs of the same coming up in the engineer-dense Finland. The rise of the connected worker, the advent of the freelance engineer economy. And it's not just on the individual level old patterns are breaking. Big corporations go increasingly for harnessing the agile and sharp freelancer talents https://www.linkedin.com/pulse/ework-valmet-sign-agreement-technical-con...