AI Skills Gap Widens: Digital Leaders Adapt to New Tech Talent Landscape

5 ways you can plug the widening AI skills gap at your business

Half of global technology leaders believe their organization has an AI skills shortage, and the capability gap has almost doubled in a year. The newly released Nash Squared/Harvey Nash Digital Leadership Report found that almost twice as many technology leaders (51%), compared with last year (28%), said their business has an AI skills shortage -- an 82% jump. Also: The great AI skills disconnect - and how to fix it The report by the recruitment specialist, the largest and longest-running survey of IT leadership in the world, found AI has jumped from the sixth-most-scarce technology skill to number one in just 18 months, the steepest and largest jump in any IT skills shortage recorded by the survey in more than 15 years of research. To put that level of growth in perspective, the report found that the increase in demand for cyber capability, another sought-after skill, has risen far more gradually -- from 16% in 2009 to 33% this year. Also: AI is paving the way for a new type of organization - a Frontier Firm So, why is the demand for AI rising so quickly? Nash Squared CIO Ankur Anand told ZDNET that the steep rise is linked to the speed of innovation. "There's an unprecedented pace of development in generative AI and the supporting large language models," he said. "If you look at OpenAI or Google, they come out with more advanced models every few months. Professionals must learn new skills quickly, and traditional learning methods can't keep pace." In short, business leaders need a new approach to filling the AI skills gap. Here are five areas to prioritize. The research shows technology leaders and their companies have been slow to respond to the AI skills crisis, as more than half of companies (52%) are not upskilling in generative AI. Anand said successful organizations have a business strategy that states what AI means to the enterprise and how talented professionals will address those concerns. Also: Is your business AI-ready? 5 ways to avoid falling behind In addition to tapping into expert resources, like academics at colleges who are aware of the talent and the skills coming through, smart business leaders focus on continuous learning and development for their professionals. "That's easier said than done, given the pace at which AI is progressing, but it's important to foster a growth mindset within the organization," said Anand. "The best companies develop a career growth plan, with role-based certifications, whether for technology or softer skills. This clear career path becomes part of a continuous learning plan." The research suggests almost two-thirds (65%) of tech leaders would choose an AI-enabled software developer with just two years of experience over one with a five-year career but without AI skills. So, what do the best AI specialists look like? Anand said the priority is sourcing people with analytical and problem-solving abilities: "AI challenges are complex, so businesses need that strong mindset." Great professionals ally technical capabilities with business domain expertise, so they know how to use AI to help the organization achieve its desired objectives: "That combination is crucial." The best AI specialists also understand ethics: "If people deploy AI without the guardrails, they will not be able to develop solutions responsibly." Also: Why neglecting AI ethics is such risky business - and how to do AI right Finally, Anand said great AI professionals share knowledge with others. "One of the things I've seen in my team is the importance of mentorship," he said. "The most talented people coach staff in the team and the rest of the business. This is a strong skill that business leaders need to focus on in the search for AI talent." Tech leaders expect AI to fill one in five technology jobs in the next five years, but the report suggests AI is also changing operating models. Anand said the first thing to recognize is that AI is changing traditional recruitment models. "There are platforms that can screen resumes and assess skills," he said. "AI is helping the industry move away from experience-based to skills-based assessment. Data-modelling techniques can also help companies predict the characteristics of a successful candidate for a role." Also: I tried Microsoft's free AI skills training, and you can too - for another few weeks Second, those candidates are unlikely to focus solely on technological expertise. The right talent will help companies augment human expertise with data-enabled capabilities, especially as the use of agentic AI increases during the next few years: "Soft skills, combined with a few hard technical skills, will be the perfect fit," he said. Finally, business leaders who look for this blended talent will cast their recruitment nets far and wide, covering diverse geographies, backgrounds, and capabilities. "This means no one will be saying, 'This job can only be filled by someone with five years' experience,'" he said. Compared to the global average, organizations that attract, retain, and incorporate Gen Z viewpoints are twice as likely to be prepared for AI demands and one-fifth more likely to report a measurable ROI from AI. Anand said successful business leaders understand the values of younger professionals and their desire for purpose in work, particularly around social responsibility. "They look for organizations that align with these values," he said. "You need to give them challenging opportunities so they feel like they're part of a continuous learning process." Also: The best AI for coding (including two new top picks - and what not to use) Access to those opportunities is crucial because the days of someone looking to work for one company for decades are gone. "The younger generations gain knowledge quickly and get bored doing the same thing -- they want to move on," he said. "Organizations must understand the values of these generations and build career plans that suit them." Those plans should include flexibility across working locations and hours: "A good work--life balance is the number one factor for choosing an employer." The organizations most ahead with large-scale implementations of AI are 24% more likely to increase their tech headcount than their peers, mostly in areas of AI and data. Anand said pioneering tech leaders stay one step ahead by not being scared of emerging technologies. "There are still large enterprises that are keeping away from Gen AI because of fears about security," he said. "But if you don't engage with these technologies, your people won't stay. The best professionals need a challenging job. They recognize that AI could make mundane roles redundant in the future." Anand said smart business leaders foster a culture of experimentation to keep staff interested and excited. "They reward the risk--taking because even the failures drive new learnings, and these lessons will deliver success in the future," he said.

AI and cybersecurity are creating a new tech talent landscape - here's how digital leaders are responding

Given its dominance in headlines, discourse, and vendor announcements, it was perhaps inevitable that Artificial Intelligence (AI) would feature highly in the annual Digital Leadership Report from staff services firm Nash Squared. The 2025 edition, shared early with diginomica, reveals that AI is largely positive for digital leaders and technologists. This year's survey took place with a backdrop of significant geopolitical and, therefore, economic uncertainty, yet technology budgets are healthy, as are Information Technology (IT) headcount sentiments. AI hype may have shaped this year's statistics, but similar levels of macho hype about the end of diversity have fallen on deaf ears. Our network of CIOs has given their insights into some of the key findings on headcount, skills, AI, and staff retention alongside our analysis of the Nash Squared Digital Leadership Report 2025. A positive return on investment (RoI) from AI implementation is reported by one in three organizations, with the tech and telco sectors ahead, in part because of the high demand on contact centers in these verticals. As the pioneer of the latest wave of AI, the US is leading AI adoption, with 38% of digital leaders telling Nash Squared they have widespread implementations. Large-scale AI adoptions have increased by 90% since the last report, and leadership boards are convinced of the potential of AI, but many CIOs are struggling to prove the business case. With boards driving demand for AI, digital leaders are finding there is a new skills shortage - AI skills. According to the recruitment firm, this is the largest skills shortage in 15 years. Over half of digital leaders (51%) report an AI skills shortage, and 33% report a cybersecurity skills shortage. This leads Nash Squared to believe that AI is a positive for technology employment. Organizations with a large-scale AI implementation are 24% more likely to increase their technology headcount, and the C-Suite believes that one in five of the jobs they recruit for in the next five years will be for AI skills. Of those surveyed, 65% would choose a software developer with just two years of AI experience over someone with five years of tech skills but no AI experience. Education, logistics, professional services, pharmaceuticals, and manufacturing topped the sectors reporting the highest levels of AI skills shortage. Could the AI skills shortage be fueled by digital leaders not being sure how to recruit AI skills? Chief Technology Officer (CTO) for the Royal Pharmaceutical Society Avril Chester, explains: Organizations first need to define their objectives and the problems they aim to solve before determining the AI skills required. Too often, the focus is on adopting AI rather than understanding its purpose, leading to a lack of clarity in skill specification. Digital leader Ian Cohen describes further: If you have spent the last 12-18 months on a focused strategy geared to improve productivity and efficiency through AI whilst learning where genuine AI enabled transformative growth might come from, then you will probably be hiring more product experts, solution design folks, data science/machine learning gurus, prompt engineers or creating more hybrid teams with low code experts. But I'd have expected those to be mainly substitution roles; net neutral by replacing redundant or released capabilities with new skills and competencies. CIO turned US venture capital leader Yousuf Khan adds: This is probably one of the most difficult areas which CIOs have to grapple with. The velocity and scale of changes happening in AI is not just incremental, it can be existential for some areas of technology and as a result require a different set of skills and people to harness and put to work. Worryingly, organizations are adopting AI but not investing in the AI skills of their people, 52% tell the report they are not upskilling on AI. Chief Executive Officer (CEO) of Nash Squared, Bev White warns: Businesses have a pressing need to ensure their technology teams are equipped with the skills to leverage AI to full effect, or the implementations they are making could fall short. Tech talent, with or without AI skills, can be reassured by this report. Nash Squared finds 41% of organizations plan to increase their IT headcount, and 36% will retain it at existing levels. However, those CIOs will have to contend with 44% of technology workers telling Nash Squared they plan to leave their current role. Andy Heyes, Managing Director, Harvey Nash, UK & I and Central Europe, comments: Engagement is the new battleground rather than retention. The survey asked digital leaders how they see the technology headcount changing over the next year; 39% expect to increase their headcount, while 20% expect it to decrease. The skills digital leaders require are also changing, the report states: Digital leaders believe that their hiring needs for existing technology positions will reduce by 18%. This suggests a change in the IT team landscape as operational staff are no longer required. Sabah Carter, Chief Digital Information Technology Officer (CDITO) in financial services, explains: I believe that 18% reduction suggests more of a shift than a shrinkage. It'll be less about reducing overall tech investment and more about evolving the skill sets needed. Many organizations have already built strong foundations in core operational and data functions with the basics of cloud, infrastructure, and traditional data engineering and Business Intelligence (BI) largely in place. What we're seeing now is a pivot toward higher-value, more strategic capabilities. Chester agrees, as peers will seek out expertise while Ilona Simpson of ZF Foxconn adds: Another explanation would be a shift to 'business' roles as digital and AI literacy grow. CIO Nadine Thomson observes: Interestingly, it is only slightly up from last year (36% in 2024), which was the lowest since 2011, and it is still the lowest percentage in a decade! I expect headcount growth in data analytics, cybersecurity, and roles supporting the development of AI. At the same time, I'm seeing a reduction in technology roles that are carrying out routine or maintenance tasks. The headcount increase at 41% shows businesses' continued investment in digital and also the changing shape of the technology function in the AI era. Like Simpson and Thomson, Cohen also sees operational roles shifting into the business as digital leaders and their teams drive up the value of data: Operational data needs to be in the hands of the customer and colleagues and made as accessible as 'What should I.....', 'Where do I....', 'Tell me why/how.....', 'What happens when.....' etc. After all, that's how they use Chat GPT, Claude or their AI weapons of choice. Organizations will need better quality data science folks to enable and assure these solutions, but the days of getting an unintelligible BI/MI report that asks more questions than it answers should be a thing of the past. Over in Silicon Valley, Khan says this is driving retention of talent: A number of CIOs in Silicon Valley want to retain key leaders more so now, not for succession plans but because team members have a deeper context on the company and its offerings. Existing team members are better enabled to build and iterate with AI as they are more aware of what can and cannot be successful for the company. Increases in technology budgets are expected in most sectors, with almost half of CIOs in the technology industry, financial services, utilities, and professional services expecting an increase. A quarter of digital leaders in government and education expect an increase, and over a quarter in engineering, health, manufacturing, retail, logistics, and pharmaceuticals. CIOs in larger organizations are more positive about an increase, perhaps an indication that they can weather the storms of tariffs, trade, and conflicts. Technology budgets continue to focus on operational efficiency as the top priority, up by 15%. With economic and geopolitical uncertainty, sadly, also comes a significant increase in cybercrime. The report comes out in the wake of major issues for fellow UK firms Marks & Spencer and The Co-operative, and finds cyber-attacks have increased 22% since the last report. Major attacks have hit 29% of those surveyed in the last two years, and digital leaders report that organized crime is the primary cause of concern, but they have also seen a growth in cyber attacks from nation states, which have increased by 10% to 50%. Insider threats have also increased from 33% to 42%. The survey and our digital leaders all believe this will drive up demand for cybersecurity skills. Carter agrees and adds: