How The Talent Shortage Challenges Innovation

This blog was originally published as part of Citisoft’s Outlook 2024

Talent, and the quest to acquire and retain it, has been a mainstay topic in our annual Outlook whitepapers and on Citisoft’s blog dating back to 2011. By unofficial count, 2024 was the ninth year out of 14 in which talent has warranted not only a primary slot in our Outlook and has also been a frequent Citisoft blog topic (including many themes touched on in John Clark’s recent perspective on generational change). 

Over the years, we’ve discussed millennials, Silicon Valley, and The Social Network, bridging the talent gap in our industry, winning the war for talent, the shifting talent landscape, and the “Patagonia Vest Recession.” While talent demographics and strategies have shifted over the years, the need to find and retain the right resources to power business strategy has remained constant—however, when considering today’s talent landscape, finding the right talent to drive innovation may be more difficult than ever.

The industry does more with less

The recurrent talent theme as we’ve discussed over the last several years has been the quest to lure specific types of resources into our industry. For all of the talk around artificial intelligence and DLT, it has always come down to a subset of skilled individuals and teams that drive both investment alpha for our asset management clients, as well as the transformational programs that are Citisoft’s hallmark. We have never come right out and labeled the talent conundrum as a talent shortage as we haven't wanted to sound alarmist. However it is worth positing that it is a lack of skilled resources that hamstrings our industry’s progress, both in terms of the elusive chase for alpha and the technology and operational firepower necessary to enable business strategy.

There isn't a budget cycle that goes by in which we are not reading about extensive cost cutting, layoffs, and general headcount reductions within the largest and most visible organizations in our industry. We've also been hearing the mantra to “do more with less” for over a decade when it comes to running critical, multi-year initiatives that require immensely skilled resources in order to realize their strategic objectives. This thinking has impacted service providers, software vendors, asset managers and asset owners, and consulting firms in our space; all have endured “RIFs,” some well publicized and some not. The irony in all of this is that resource constraints and an overall lack of bandwidth are typically the number one risk when it pertains to delivering projects on time, on budget, and within scope of the original goals. 

Managers play the talent long game

The senior stakeholders and sponsors within our client base (comprised of COO, CIO, CTO, CDO) all have similar concerns when it comes to both a lack of talent and the retention of those suitably skilled resources that fall under their purview. These are common themes—there are simply not enough resources to deliver the change that is required, especially those that are contemplating or in the midst of major transformation programs. 

While this may be a bit of welcome news for consulting firms to fill the gaps, we are all seemingly pulling from the same pool of resources, and what is a relatively “small” industry seems to be getting smaller. Acquiring, nurturing, and retaining well-rounded industry practitioners that can influence and lead change programs can certainly be a challenging exercise, and it takes a long view. The industry as a whole may talk a good game when it comes to technology disruptors, but when it comes to true adoption and upskilling, we continue to move at a comparatively glacial pace.

We don’t profess to know the solution or have access to the golden ticket that will alleviate the talent and resourcing gap that is currently confronting our industry. The one thing we are sure of is that there are no shortcuts. Curing the talent shortage is a sea change that will take time. If our industry is going to take advantage of the cloud-based solutions that are beginning to present themselves as viable alternatives to legacy applications, there will need to be a concerted industry effort to rapidly develop those hybrid skillsets that bring together domain expertise with advanced technology proficiency.

While we expect to continue addressing the importance of industry talent Citisoft publications, hopefully it takes on a lighter tone and speaks to an industry that has finally begun to take advantage of promising technology and has the requisite influx of resources that are able to deploy it.