New data reveals artificial intelligence is challenging organizations in significant ways, with only 15% of global tech leaders reporting they are prepared for the demands of generative AI and 88% saying stronger regulation of AI is essential, according to Harvey Nash.
The global study found that despite the explosive predicted market growth of AI, it isn’t yet widely used: only 1 in 10 US organizations report having large-scale implementation of AI but 48% are piloting or conducting small-scale implementation.
AI effectiveness concerns
Concerns around the effective application of AI are significant, with almost 9 in 10 global leaders saying stronger regulation of AI is critical, yet 61% say it won’t be effective, compared to 54% in the US who say the same. Compounding these challenges, AI is the number one reported tech skills shortage in the US.
“Despite the attention around AI, the application and adoption of AI is really in its nascent stage,” said Jason Pyle, President of Harvey Nash US & Canada Market. “What our survey findings reveal is that the technology behind AI is moving faster than the strategies and policies to support it, and tech leaders are finding themselves squeezed in the middle. As we look ahead to 2024, we expect tech leaders to focus on a few key areas within AI: developing more guidelines around the use and application of AI, putting safety and privacy front and center, and demonstrating its ROI and metrics.”
After the hypergrowth of 2021 and 2022, the recent slowdown, and aggressive monetary tightening, digital leaders are still optimistic about 2024 growth. 45% of US tech leaders expect an increase in their budgets (almost identical to 44% of global tech leaders who say the same) and 46% of US leaders expect to increase headcount, similar to 50% of global leaders who say the same.
Salary changes have been impacted by the economic slowdown and high inflation. 62% of tech leaders report that the rising cost of living is making salary demands unsustainable. About half report salary has either stayed the same (42%) or decreased (7%) year-over-year. 29% received a salary increase of 5%, and any larger salary increases drop off significantly after that.
In-office mandates affect female tech hires
The survey found that when there is a high number of mandated days in the office, fewer females choose to be part of the tech team there. For companies without mandated in-office days, 28% of global tech new hires in the last two years are female. That number drops to 22% at companies with a mandated five days in the office.
48% of US companies surveyed require some level of in-office time. The most popular number of required in-office days is overwhelmingly three, with 51% setting that expectation, compared to 15% requiring five days, 15% requiring two days, 11% requiring one day, and 9% requiring four days.
In general, female representation on tech teams remained the same year-over-year, globally at 23% and slightly higher in the US at 27%. Women in leadership roles stalled, remaining at 14% year-over-year globally and dropping from 21% to 20% in the US since last year.
45% of US tech leaders shared the skills shortage is preventing them from keeping pace with change. While this is down from 69% in 2021 and 59% in 2022, this year’s number is primarily a result of the slowing market and reduced overall hiring.
Key skills in high demand across the US
Artificial intelligence, technical architecture, big data/analytics/data engineering, enterprise/solution architecture, and project management are the top five skills in demand in the US. The same skills shortages are found globally, with the only exception that AI did not make the global top five needed skills.
In recent years, cybersecurity skills have occupied the top three most scarce skills, but this year it’s seen one of the largest falls in demand. In the US, the number of tech leaders struggling to find cybersecurity talent has dropped sharply from 43% to 18%.
68% of global tech leaders are members of the operational board/executive management team, the highest level since 2017 (71%).
When technology leaders are given a seat at the top table this delivers advantages over the competition, including a 20% uplift in adopting new technology and a 24% advantage in attracting and retaining talent.