For years, one of the most significant challenges facing companies across all industries has been bridging the IT skills gap and managing short- and long-term staffing shortages.
Approaching these challenges with another standard job posting won’t solve the issue.
You have to think differently about how to fill critical roles and complete necessary tasks, with solutions such as staff augmentation and global outsourcing as potential 1:1 alternatives depending on your circumstances. You’ll need to consider the following:
IT personnel have become essential to operations regardless of your industry, and an unaddressed need for their skills will significantly limit what you can accomplish.
As a result, it’s a candidate’s market out there, with no signs of changing.
IT skills are in high demand. Per one study, 64% of companies intended to hire 50 or more developers in 2021; nearly as many HR professionals (61%) expected it to be their biggest challenge. Yet, by year’s end, 75% of IT decision-makers still faced skills shortages on their teams. In other words, companies simply aren’t meeting their IT staffing needs.
This year, things haven’t changed. If anything, the transition to remote work during the pandemic has only made recruiting more difficult, especially for smaller or newer companies.
Suppose your company isn’t willing to support remote—or at least hybrid—work for full-time employees. Then, frankly, your job posting is a non-starter for most potential candidates. In contrast, hiring an IT contractor often comes with the assumption that they’ll be operating remotely, but most companies still need to change their approach to find the best talent.
The idea that companies don’t have to make an effort to attract talent doesn’t apply to the IT sector. Full stop. A reasonably competitive salary and benefits package won’t open the floodgates on applications. It might not even result in a trickle.
IT talent has to want to work for you, whether because your company is attractive enough on its own or because the role provides enough incentives.
When deciding how to recruit software engineers, recognize that they aren’t just selling you on their capabilities. You’re selling to them at the same time.
It might take a complete recruiting transformation to find the talent you need.
Everyone wants talented IT staff, especially tech companies. The problem there is that top talent is probably employed already. That’s why it’s simply not enough to make another post for the position or wait for them to put themselves on the job market.
Would you skip the marketing if you were launching a new product or service?
You need to think of IT recruiting in the same way. Pursue the people you want to fill the role; they don’t just show up. Take a proactive approach by putting time and effort into job postings, networking, scouting, and other initiatives to contact potential employees.
To continue the product launch analogy, companies targeting a specific customer profile adapt their marketing strategy to it. When you’re looking for top talent—especially when they’re already employed—you need to be selective in your hires and intentionally target them.
The trick here is not establishing needlessly high requirements for your search. It’s increasingly common to see job postings for entry-level positions requiring a four-year degree—or even a master’s. However, many developers hone their skills in other arenas, outside of formal academia. For example, many top candidates may have attended “coding bootcamps” or other training programs instead of a traditional college. Don’t be afraid to set minimum capabilities for the people you target, but truly consider whether they reflect the competencies you need.
If potential hires have reservations about your company—whether workplace culture, societal impact, or otherwise—it will directly affect your ability to recruit top talent.
For example, consider Facebook. It’s now known to pay a “brand tax” to hire new employees because of its role in global events in the last few years and the resulting negative perception. From 2020 to 2021, the median pay offered for upper-mid-level engineers jumped by $20,000. (And changing the nameplate alone won’t cut it; we all know “Meta” is still the same company.)
To avoid a similar fate, you’ll have to consider incentives like:
At the same time, potential candidates can often see through overly cheesy attempts to frame your workplace as nothing but an idyllic playground. We do all still understand we’re working.
Outsourced staff augmentation and managed IT staffing aren’t restricted to your company’s region—or even the country it operates in. The competition for top IT talent has gone global, and your staffing capabilities need to match.
Because of the pandemic, the outsourcing market has shifted its expectations toward remote work, just like the full-time talent pool. This paradigm shift isn’t reversible—at least not in many industries and roles—and companies need to adjust to this new reality. As remote full-time employment increased, so too did the infrastructure supporting it and expectations around it.
For outsourcing, remote work infrastructure has knocked down any concept of borders.
When it comes to augmenting your IT staff via global outsourcing, Kearney’s Global Services Location Index has projected the following segments of the tech industry to grow the most:
Whether in service and application development or data analysis and engineering, every industry now needs IT skills on its staff roster.
We can also turn to Kearney’s Global Services Location Index for insights on the top service locations. These differ based on company maturity. For established hubs, the top spots are:
And, for newer or emerging hubs, the top locations are:
There’s an apparent geographic trend regarding which countries in Europe and Asia make Kearney’s list, but other regional outsourcing hotspots are rapidly emerging in tandem.
Companies increasingly turn to Vietnam, Indonesia, Malaysia, and the Philippines for skilled IT outsourcing capabilities (valued at $5.2 billion) in Southeast Asia. And this trend is set to continue as Chinese wages rise and affect outsourcing costs.
Although the growing compensation rate predominately affects production and manufacturing right now, the average Chinese yearly wage has more than doubled from $7,437.91 in 2012 to $15,218.56 in 2020. Further increases could drive even more interest into other countries and talent pools in southeast Asia, or into markets in other continents entirely.
Ukraine’s IT outsourcing industry grew 20.4% in 2020 and surpassed $5 billion prior to Russia’s invasion. Halfway through last year, the country joined Poland (295,300 professionals) and Romania (119,100 professionals in a $4.5 billion industry that provides 1.9% of national GDP) atop a European Business Review’s guide for Eastern European IT industries.
As horrific as the current events in Ukraine are, they underscore the importance of establishing multiple IT skill suppliers in different regions around the world to protect business continuity.
In Estonia, a government-backed technology initiative began funding widespread technology literacy in 1996, which has led to the country becoming one of the most IT-skilled worldwide. The presence of Russian (cyber) threats has only fueled cybersecurity capabilities.
Today, Estonia’s capital—Tallinn—plays home to NATO’s Cooperative Cyber Defence Centre of Excellence and is considered a “Baltic Silicon Valley.” Despite the violence and instability currently plaguing Eastern Europe, it looks to remain an attractive hub for IT talent.
Does your company need to develop an entire project? Sometimes, the best way to get it done is to completely outsource it, whole cloth, instead of relying on ad hoc staff augmentation.
Turnkey development is exactly what it sounds like—the delivery of a ready-to-use software product. This could be anything from new functionality integrated with an existing product to app development for in-house use.
There are numerous situations in which turnkey software development simply makes more sense for your business than ad hoc or other strategies:
In this regard, software development should take a page out of the automotive industry’s playbook. Even though nearly all auto manufacturers are capable of developing and producing new mechanical systems, it often makes more business sense to purchase them from others.
As with ad hoc staffing and outsourcing, you’ll need to recruit global teams for turnkey solutions and consider their skill suitability for the project—which is another reason to develop partnerships with multiple suppliers.
As the nature of IT staff augmentation and how to recruit software engineers has changed, companies are facing difficulties navigating this transition.
That’s what ScaleTech Consulting is here for. Our People Gateway takes the work out of acquiring global staffing capabilities by matching you with top IT professionals for ad hoc or turnkey solutions. At the same time, our Transform Service will help you overhaul recruiting and staffing processes from the ground up to align with your business strategy.
Reach out today to learn more about ScaleTech Consulting!
BBC. The growing IT sector in Ukraine. https://www.bbc.com/storyworks/future/ukraine-innovating-for-the-future/ukraines-dynamic-it-sector
Business Insider. Facebook is paying a 'brand tax' to hire tech workers who fear a black mark on their careers if they work at the company. https://www.businessinsider.com/facebook-pays-brand-tax-hire-talent-fears-career-black-mark-2021-12
CIO. How IT outsourcing is changing in Southeast Asia. https://www.cio.com/article/191264/how-it-outsourcing-is-changing-in-southeast-asia.html
CNN. How Russian threats in the 2000s turned this country into the go-to expert on cyber defense. https://www.cnn.com/2021/06/18/tech/estonia-cyber-security-lessons-intl-cmd/index.html
The European Business Review. A Quick Guide For Outsourcing in Eastern Europe. https://www.europeanbusinessreview.com/a-quick-guide-for-outsourcing-in-eastern-europe/
Kearney. Toward a global network of digital hubs. https://www.kearney.com/digital/article/?/a/the-2021-kearney-global-services-location-index
NY Times. Tech Companies Facing a Fresh Crisis: Hiring. https://www.nytimes.com/2022/02/16/magazine/tech-company-recruiters.html
TechRepublic. Hiring developers is going to be your next big problem. https://www.techrepublic.com/article/hiring-developers-is-going-to-be-your-next-big-problem/
TechRepublic. 3 out of 4 IT teams are facing critical skill gaps. https://www.techrepublic.com/article/3-out-of-4-it-teams-are-facing-critical-skill-gaps/
Trading Economics. China Average Yearly Wages. https://tradingeconomics.com/china/wages
UNESCO. Global lessons from Estonia’s tech-savvy government. https://en.unesco.org/courier/2017-april-june/global-lessons-estonia-s-tech-savvy-government