The global pandemic revealed weaknesses of legacy, paper-based operations. It forced digital transformation which has resulted in an increased demand for tech jobs in all industries. The growth in automation, machine learning and cloud infrastructure has created an even greater demand for tech talent. As of March, there were over 300,000 unfilled tech roles in the US — the recovery hasn’t even started. Unemployment in tech is already below Aug 2019 rates. No wonder 69% of employers in the US are struggling to fill tech positions and tech roles remain the hardest roles to fill.
Tech also has the highest attrition rate (13.2%) in the US. High employee turnover is costly and disruptive to the organization, as it costs 50–250% of the salary to find a new, qualified candidate.
Sourcing and attracting talent isn’t easy. Companies need to be more strategic in their talent acquisition strategies. Talent is bombarded by messages on LinkedIn and social media by recruiters and hiring managers. Office perks are passe table stakes when they can work from anywhere. and median compensation is rising faster than real estate.
Talent shortage, competition and compromises
Canadian companies are also suffering but worse. According to the Bureau of Labor Statistics Employment, software development positions will grow by 21% from now until 2028. ICTC predicts that by 2023 Canada will add 305,000 tech jobs in a country that only produces 14 760 grads in comp sci and maths per year!
Go global to search? Better get in line because the FAANGS (Facebook, Amazon, Apple, Netflix, Google, Shopify) have already set their teeth into hot markets around the world. With these and most other companies shifting from in-person to remote, your talent isn’t safe from any headhunter and finding someone to backfill the loss isn’t easy.
Employers are starting to accept serious compromises. when finding talent with the required skill set. Over 50% of businesses have reported hiring tech employees lacking the job requirements, just to close on the hiring process. For roles such as Software Architect and DevOps, employers report that less than 40% of candidates meet the job requirements. The skills mismatch between requirements and actual skills reduces the quality of products and services and increases the deployment time. In other instances, unfilled tech vacancies result in a reshuffling of tasks and additional responsibilities to current employees, resulting in burnout and lower employee retention.
Tech hiring solutions
Faced with these challenges, many companies are looking at multiple solutions such as internal training, global hiring, and outsourcing. Let’s look at this last option.
Challenges with outsourcing
Outsourcing is attractive on many levels — especially speed of access to talent and potential cost savings. However, there is more noise than signal and the results often disappoint.
According to Dun & Bradstreet’s Barometer of Global Outsourcing, “20 to 25% of all outsourcing relationships fail within two years, and 50% fail within five”.
Some of the challenges that occur with an outsourcing partner are:
- Communication: the level of English proficiency varies by the country where you choose to outsource. Even if you choose to outsource to an English-speaking country, communication styles can still be a challenge, resulting in a breakdown in the partnership.
- Culture: workplace culture differs by region and country. Understanding if you are working in a task-based or relationship-based culture, can impact the cost and time for a project. Understanding that “Yes” doesn’t always mean yes and “Now” doesn’t necessarily mean now, will certainly impact your relationship.
- Time zone: In Sync? A-synchronous or Halo (some overlap)? The choice depends on how late or early your team wants to work. All options can work but it is important to discuss this before selecting a partner.
- Employee turnover: If they have high turnover, you will lose momentum and spend most of the contract onboarding — in the wrong timezone!
- Price: “You get what you pay for”, is especially true when it comes to software development. Yes, you can get better rates based on lower costs of living in global markets. But a senior dev in any market is a hot commodity, and they know it. So when you find a great CV, don’t expect it to be cheap. It is also important to look at the other factors such as speed, culture alignment, language proficiency, time zone, project experience. You might find out that compromising on these factors to get a cheap hourly rate will actually increase your costs in the long run.
Advantages of outsourcing
Access to specialized skills: Searching globally for your development team gives you access to a deeper and broader talent pool giving you a better chance of hiring the best of the best.
Reduce cost/time: it takes the average company 35 days to hire each software developer. If you can deploy a whole team in weeks your whole business plan is accelerated.
Turn it on or off at will. With contractors, you can ramp up fast or down and up again with any variety of skill set depending on your needs. This becomes especially important if you need to pivot or build a new product to adjust to changing customer needs.
If you are interested in learning more about how to accelerate the dev shop selection process and lower the risk of outsourcing, contact our team at Global Talent Accelerator. Click here for a free consultation with one of our global outsourcing experts.
