The Leadership Paradox: 18% Executive Shortage While Tech Unemployment Hits 5.8%

General
1

I’ve been thinking about something that doesn’t add up.

Last month alone, I got seven — seven — messages from executive recruiters. VP Engineering roles, CTO positions, Head of Platform opportunities. Every single one opened with some variation of “we’re struggling to find qualified candidates.”

Meanwhile, my inbox is also full of referral requests from talented engineers who’ve been job searching for months. Senior engineers with 10+ years of experience. Former tech leads from well-known companies. People I’d hire in a heartbeat for senior IC roles… if I had the budget.

The Data That Doesn’t Make Sense

Here’s what the market is telling us:

The shortage side:

  • 18% projected increase in engineering executive demand by 2026
  • EV sector alone needs 30% more engineering leadership hires
  • Compensation packages for VPs/CTOs are skyrocketing as companies compete for limited talent

The surplus side:

  • Tech unemployment hit 5.8% (highest in years)
  • Median re-employment time: 4.7 months
  • Thousands of engineers displaced from Meta, Amazon, Google layoffs

How do both of these things exist at the same time?

Four Theories I’m Wrestling With

Theory 1: The Skills Are Actually Different

Maybe the skills that make you an excellent senior engineer don’t automatically translate to executive leadership. Strategic thinking, board-level communication, P&L ownership, organizational design — these require different muscles.

But here’s my question: How different, really? And are we overweighting the differences while undervaluing transferable skills?

Theory 2: We’ve Created Artificial Scarcity

I’ve seen job descriptions that require:

  • 10+ years of experience leading teams of 100+ engineers
  • Proven track record scaling from Series B to IPO
  • Deep industry-specific technical expertise
  • Experience at a “top-tier” tech company (which usually means FAANG)

If you only hire people who’ve already done the exact job, where do new leaders come from? Are we gatekeeping ourselves into a shortage?

Theory 3: The Network Effect Is Real

Most exec hires I’ve seen happen through networks, not job boards. Board members recommend former colleagues. VCs suggest people from their portfolio companies. The executive search firms call the same 200 people for every role.

Meanwhile, talented engineers who could be great leaders never get in the room because they’re not in the network.

Theory 4: We’re Terrible at Internal Development

In my 16 years in tech, I’ve seen companies invest heavily in:

  • Engineering onboarding
  • Technical skill development
  • IC career ladders
  • Senior IC tracks

But leadership development? Usually an afterthought. Maybe a week-long “management training” if you’re lucky.

We promote our best engineers to manager, give them no support, watch them struggle, then wonder why there aren’t more “qualified” executives.

What I’ve Learned From My Own Path

I was promoted to engineering manager at Google because I was a strong IC. I had exactly zero training in management, hiring, performance reviews, or organizational design. I figured it out through trial, error, and some truly painful mistakes.

My promotion to Director at Slack? Again, based on being a successful manager. Not on any demonstrated ability to think strategically about organizational design or business impact.

VP at my current startup? Third time asking myself “am I qualified for this?” while learning everything on the job.

And here’s the thing: I had advantages many talented engineers don’t have. Strong mentors. FAANG brand on my resume. Access to networks through previous roles. An industry that’s starting to value Black women in leadership (though we still have miles to go).

What about the brilliant senior engineer who:

  • Went to a state school instead of a “top-tier” program
  • Built their career at B2B SaaS companies instead of consumer tech giants
  • Never worked in the Bay Area
  • Doesn’t have executive mentors in their network

Are they unqualified? Or just unseen?

The Question That Keeps Me Up

Are we genuinely facing a shortage of people capable of executive leadership? Or have we created such narrow criteria that we’re overlooking massive pools of talent?

Because if it’s the latter, we’re doing this to ourselves. And while we debate “qualifications,” thousands of engineers who could be great leaders are sitting unemployed, getting rejection after rejection.

I don’t have the answer. But I think this community might help me think through it.

For those of you hiring execs: What actually makes someone qualified? How much of your criteria is essential vs traditional?

For those of you struggling to land roles: What barriers are you hitting? Do you want to pivot to leadership, or are you facing obstacles in IC roles too?

For other executives: How did you get here? What helped you make the jump? What would you do differently to develop the next generation?

Let’s figure this out together.

Sources: Engineering Executive Talent Gap 2026 Trends, Leadership Strategies to Scale Teams 2026

2

This paradox hits home. I’ve experienced both sides — desperately trying to hire executive talent while watching brilliant engineers struggle to find their next role.

Here’s my hypothesis about the root cause: We’re terrible at developing technical leaders internally.

Most companies promote based on technical excellence, not leadership potential. Then we wonder why there aren’t enough qualified VPs and CTOs when the time comes to scale.

The “Qualified” Criteria Problem

I’ve seen exec search firms and hiring committees look for:

  • 10+ years at FAANG (why? what unique skills does this provide that talent from other companies doesn’t have?)
  • Specific industry experience (why can’t strong leaders transfer domains?)
  • Proven scale experience (how do you get it if no one gives you the chance?)

We’ve created a closed loop that excludes diverse talent by design.

Think about it: If you only hire executives who’ve already been executives, you’re recruiting from a pool that’s historically been homogeneous. You’re perpetuating the same networks, the same backgrounds, the same biases.

The Development Gap

In 25 years in this industry, I’ve seen companies invest millions in:

  • Engineering tools and infrastructure
  • Technical training programs
  • Productivity optimization
  • Recruiting pipelines for ICs

But leadership development? Usually a $5,000 management training course that people take when they’re already overwhelmed in their first management role.

We promote people based on their technical contributions, hand them a team, and expect them to figure out:

  • Organizational design
  • Cross-functional strategy
  • Business impact thinking
  • Executive communication
  • P&L management

No wonder the “qualified” pool feels small. We’re not growing it.

What Needs to Change

Stop waiting for the “perfect” candidate who’s already done the exact job. That person has options and doesn’t need you.

Instead:

  1. Identify high-potential senior ICs early — look for strategic thinking, not just code quality
  2. Create structured leadership tracks — rotations, executive mentoring, business training
  3. Hire for potential, not pedigree — the best CTO I ever worked with came from a regional bank, not FAANG
  4. Measure leadership development like you measure engineering metrics — make it visible, track progress, hold leaders accountable

The talent is there. We’re just looking in the wrong places with the wrong criteria.

And while we gatekeep, thousands of people who could be transformational leaders are getting “not a fit” emails.

3

I want to add a different angle to this: The skills gap is real, but not for the reasons companies think.

Many of the displaced engineers I’ve spoken with are excellent ICs. They can architect complex systems, mentor junior developers, drive technical excellence. But they’ve never developed:

  • Cross-functional collaboration skills beyond their immediate team
  • Business acumen and P&L understanding
  • Organizational design thinking
  • Executive-level communication (board presentations, investor updates)

And this isn’t their fault. Most companies don’t invest in developing these skills.

My Own Path: Nothing Was Automatic

I’m a Director of Engineering now, but getting here required deliberate skill-building that my employers didn’t provide:

  • SHPE (Society of Hispanic Professional Engineers) gave me my first leadership mentoring
  • I took business courses at night to understand P&L, unit economics, financial modeling
  • I volunteered to lead cross-functional initiatives just to practice stakeholder management
  • I found executive mentors through personal networking, not company programs

None of this was part of a formal development path. I had to seek it out, pay for it myself, do it on nights and weekends.

How many talented engineers never get this opportunity? How many don’t even know these are the skills they need to develop?

The Unemployment Side: Waiting for the Wrong Role

Here’s another uncomfortable truth: Many unemployed senior engineers are waiting for the “perfect fit” IC role instead of considering leadership pivots.

I get it. Management isn’t for everyone. But for those who want to lead and are struggling to find senior IC roles — have you considered:

  • Engineering manager roles at smaller companies (easier entry point)
  • Staff+ roles with explicit leadership responsibilities
  • Startup founding engineering roles (wear multiple hats)
  • Technical program management (bridges IC and leadership)

The market is telling us something: Senior IC roles are oversupplied. Leadership roles are undersupplied.

How We Bridge the Gap

Companies need to create “leadership track” programs for senior ICs:

  1. Shadow executive meetings — let senior ICs observe how decisions get made
  2. Rotate through business functions — 3 months with product, sales, finance to build empathy
  3. Assign executive mentors — pair high-potential engineers with VPs/CTOs
  4. Fund external development — pay for courses, conferences, coaching
  5. Create interim leadership roles — Head of X, Acting Director, Special Projects lead

Not everyone will want this path. But for those who do, we should make it accessible, not accidental.

The executive shortage and the unemployment crisis are two sides of the same problem: We’re not intentionally developing the leaders we need.

4

Coming from the product side, I want to share what I’m seeing: This executive shortage extends way beyond engineering.

VP Product, VP Design, VP Growth — same pattern everywhere. Companies want unicorns who have:

  • Deep technical or domain expertise :white_check_mark:
  • Proven business and strategic savvy :white_check_mark:
  • Demonstrated leadership at scale :white_check_mark:
  • Industry-specific experience :white_check_mark:
  • FAANG or “top-tier” company pedigree :white_check_mark:

These people exist. They’re also expensive, have multiple offers, and can be extremely selective.

Meanwhile, talented professionals who have 3 out of 5 of these traits can’t even get screening calls.

The Real Question: Potential vs Pedigree?

Here’s what frustrates me: FAANG pedigree has become a lazy proxy for capability.

Don’t get me wrong — Google, Meta, Amazon have great talent. But so do Series B SaaS companies, regional enterprises, and bootstrapped startups. The obsession with brand-name companies excludes massive pools of talent.

The best leaders I’ve worked with came from unexpected backgrounds:

  • My most strategic VP Product came from a failed startup, not a tech giant
  • The best eng leader I know built their career at a healthcare company
  • The most innovative designer I’ve worked with came from an agency, not an internal team

They all had potential. Someone took a bet on them. They delivered.

A Practical Suggestion: Executive Residency Programs

What if companies created “executive residency” programs?

  • Give promising leaders a 6-month rotation through executive responsibilities
  • Pair them with a current exec as a mentor/shadow
  • Let them lead a project, present to the board, own a P&L
  • Lower risk than a full VP hire, but real development opportunity

Think of it like a medical residency. You’re learning on the job, with supervision, before you’re fully credentialed.

Benefits:

  • Expands the “qualified” talent pool
  • Reduces hiring risk (you see them in action before committing)
  • Creates loyalty (people remember who invested in them)
  • Diversifies leadership by design (you can look beyond traditional networks)

The Cost of Doing Nothing

While we debate qualifications and wait for perfect candidates:

  • Strategic initiatives get delayed because we can’t staff leadership
  • Existing executives burn out from spanning too much scope
  • Talented people leave tech entirely because they can’t break through
  • The leadership pool stays homogeneous and inaccessible

We can fix this. We just have to decide that developing leaders is as important as recruiting them.

5

Design leader here, and I’m seeing this exact same pattern play out across all functions.

My failed startup taught me something painful: “Leadership experience” is often code for “we don’t want to invest in development.”

The Failure Loop Nobody Talks About

Here’s the vicious cycle:

  1. Companies only hire “proven” leaders
  2. This shrinks the pool to people who’ve already been given leadership opportunities
  3. Those opportunities historically went to a narrow demographic with specific networks
  4. New leaders never get developed
  5. Pool stays small and homogeneous
  6. Companies complain about shortage

We’re creating the scarcity we complain about.

Real Talk: The “Not Enough Qualified Candidates” Excuse

I’ve been on both sides now — trying to hire leaders, trying to become one. Let me tell you what “not enough qualified candidates” often really means:

  • “We don’t want to invest time in developing someone”
  • “We need someone who can hit the ground running because we’re behind”
  • “We can’t afford to take a risk on unproven talent”
  • “Our board wants recognizable names on the leadership team”

Sometimes it’s legitimate. Often it’s risk aversion disguised as high standards.

Who We’re Overlooking

The unemployment crisis is especially brutal for:

  • Women in engineering leadership who took time off for family
  • Black and Latinx leaders without traditional networks
  • First-gen professionals from non-“elite” schools
  • Leaders from non-coastal tech companies
  • Career pivoters (like designers who learned to code, or engineers who moved to product)

These people have the exact skills companies say they need:

  • Resilience from navigating challenges
  • Fresh perspectives from diverse backgrounds
  • Hunger to prove themselves
  • Loyalty to companies that take a chance on them

But they don’t fit the template, so they’re invisible.

The Optimistic Note

I am seeing some companies experiment with “leadership apprenticeship” models:

  • Junior VP roles with clear development paths
  • Interim/Acting leadership positions that can convert to permanent
  • Executive coaches paired with first-time leaders
  • Rotational programs that build cross-functional skills

These companies will have a competitive advantage. While everyone else fights over the same 200 “proven” executives, they’re building deep benches of loyal, capable leaders.

Question for the group: How many qualified leaders are we overlooking because they don’t fit our narrow template? And what’s the cost of continuing to gatekeep?