What if we told you that the business world is currently experiencing one of the most unlikely challenges of the current times? With the Covid-19 pandemic gradually moving towards its horizon, IT businesses are bombarded with new trouble—IT talent crunch.
Many would agree that the talent shortage has long been in the making, and the pandemic had only delayed the inevitable.
Despite technologies like Artificial Intelligence, Machine Learning, and Automation chopping the need for human intervention, the IT sector is a unique field that cannot function without human resources.
The tech talent gap is looming in the industry, and if it is not taken care of, it would leave the business world in an even more troubled state. However, there is hope in the form of offshore development and outsourcing. However, the trouble needs to be tackled now. Sooner or later, the shortage is going to catch up with popular offshore development countries such as India, the Philippines, and other Latin American countries.
Here, we try to understand what causes the global talent shortage, its impact on the global business community, and related concerns.
So let’s start with the obvious and most important question:
What is the Global Tech Talent Shortage?
According to a recent report on Korn Ferry, there would be over 85 million jobs to be filled by the end of 2030. If we take a peek, that’s just nine years from now.
And that explains the question—there is a shortage of adequately skilled tech talent in the world.
When the world is going to get over the current pandemic, this issue will blow over. And that’s not all. It is just the tip of the iceberg. A report states that a combined 64% of human resource professionals are looking to hire nearly 50 developers for their business or clients.
That’s a staggering number:
This makes the global IT talent shortage even scarier than it actually is for everyone involved.
Everyone understands that almost all businesses in the world are moving rapidly to digital platforms by adopting technology infrastructures. The pandemic has accelerated tech adoption by most businesses. It is said that businesses have adopted technologies worth years in a matter of mere months thanks to the coronavirus pandemic.
This has put severe tension on the talent that was to naturally come to its position had there not been the pandemic. As businesses have already hired IT professionals with adequate skills in advance due to the coronavirus pandemic, the rest of the world is reeling from it.
Tech Talent Shortage throughout the Years
The tech talent shortage is not a new phenomenon. Hiring managers and recruiters have experienced the same from time to time. However, what makes the situation worse now is the rapid adoption of technology by almost every business on the planet.
It is befitting to say that every business has become an IT business, and they need people with IT skills. And what is challenging is that even with all the technology and reduced human interventions, the talent gap is continuously widening.
Tech and talent managers face many challenges but this is making their lives more difficult than ever. This graph shows the sentiment of human resource professionals about hiring in 2021.
A majority of the recruiters believe that they would struggle the most with the recruitment of DevOps professionals followed by Back-end developers/engineers and full-stack developers/engineers.
This sentiment has been cooking in the industry for a long time, and many believe that it is even more challenging than the same during the 2018-periods.
What Is Causing the Tech Talent Shortage?
Although talent shortage is not a new thing, it has been troubling the global business community for a while. The current pandemic accelerated the same at unprecedented rates. There are a plethora of business, geopolitical, and technical reasons that have contributed to the ongoing IT talent shortage.
Some of the pressing issues can be identified as given below:
Number of Retiring Workers
When the time comes, professionals retire no matter how important a role they play in their organization. As the majority of baby boomers are retiring now in the US, most big-size companies find it difficult to replace them with adequate talent.
Emerging technologies and their rapid adoption have made the talent shortage even more severe. With such inventive technologies as AI, Machine Learning, Data Analytics being overwhelmingly adopted by businesses, the education sector cannot produce enough talent to meet the demand.
The Covid-19 Pandemic
It has been said that during the early months of the pandemic, businesses around the world have completed technology transformations that would have otherwise taken years. This assured that businesses went on recruiting as they could, which happened worldwide leading to the shortage of IT talent.
Big Companies Recruiting Big
Another reason can be attributed to large businesses that have big money to spend on acquiring talent. They hired top professionals as they have got the financial backup to meet the challenges of paying their talent big money. This created an exodus of sorts where almost all skilled talent moved from smaller businesses to bigger ones, and they are unlikely to move from the big companies due to excellent compensations.
Increasing Skill Gaps
A decade ago, marketing managers did not have to have exceeding skills in social media, PPC, or search engine marketing. But now, since businesses depend on digital means to advertise, they are required to have enough knowledge and skills in the same. Those who do not have such skills are at a disadvantage. The case is similar in every other business vertical due to rapid technology adoption.
Non-Tech Companies Hiring Tech Workers
This is a new phenomenon as every other business has adopted technology to run their business. Technology was mostly restricted to technology-driven companies before. However, the widespread adoption of technology ensured that every business in the world now needs tech professionals. As such, non-tech companies began to hire tech talent locally, which fed into the ongoing talent shortage.
Although technology has been identified as the prime culprit of the talent shortage by many, there is an interesting side to this.
Many businesses are hesitant to adopt new technologies due to the talent crunch around the world.
Loot at this graph here:
The Impact of Talent Shortage in the World
One of the biggest impacts of the tech talent shortage in the world is that the entire world is affected by it. No country won’t be affected by the tech talent shortage as the entire world is a single, interconnected market.
On the global level, a shortage of skills can be devastating for everyone. The competition for adequate skills can negatively impact the world as it can increase the cost of labor, lower quality, slow production, and the entire world trade may slow down. Each of these has the potential to be detrimental to the world in both economic and political spectrums.
Since the world of business is largely composed of people to make decisions and lead projects, the actual impact can be even more devastating for everyone.
What Are Governments and Companies Doing About the IT Talent Crunch?
Businesses and governments are doing everything they can to fight the current IT skill crunch. However, governments, have other priorities, such as the pandemic and economic slowdown.
But for businesses, it is a matter of life and death. The pandemic has already taken away from them nearly two years of business, growth, revenue. They cannot afford to lose this battle, either.
But, there must be bolder moves from such businesses.
While offshore development centers are one of the best options, businesses need to be proactive and upfront with the same.
Talent crunch is going to impact developing countries such as India and others sooner or later. And businesses have to be in a race to strike offshore development deals with top offshore companies like Fullestop to beat both the competition and the talent shortage.
Although India has a great talent pool of IT professionals with English-speaking skills, increased demand for the same from around the world can make it dearer for those who do not act now.
Here is a graph that shows the entry-level talent pool in India for the IT sector during 2020-2021.
Businesses are aware of the challenges of tech talent shortage, and most of them are said to have strategies. But they are not actively implementing these strategies. This is a contributing factor to the already tricky situation that we find ourselves in, right now.
How to Combat Global Tech Talent Shortages
There is no doubt that most global businesses are still mulling over possible strategies that they can adapt when the shortcake blows over. However, it will be too late to do that.
However, if you are way ahead of the curve with adequate initiatives and strategies to face the challenges, you can even beat the biggest tech companies in the world when it comes to preparing for the all-out talent war.
Wondering how you can do that? Here are a few tips to help you fill your talent gap:
Strike Early Deals with Offshore Development Companies
One of the biggest solutions to the current tech crunch is to have adequate offshore development centers in the best outsourcing destinations in the world such as India and Latin America. This will help you insulate yourself from the impending challenge as you would already have enough talent and teams to work on your projects. By associating with top offshore development companies and centers in India which has extensive experience, qualified talent, and cutting-edge tech infrastructure, you will surely be ahead of the competition by a mile.
Create Candidate Pipeline
Most businesses fail to create a candidate pipeline to understand the talent that you need in the next 3 to 5 years. This will help you understand your talent needs and prepare for recruitment. This will also help you build relationships for the future to meet your hiring needs as and when it happens.
Develop Your Current Workforce
Often the most overlooked option to find the right talent is to develop the current talent. Find potential candidates with the right skills and train them to take more responsible and challenging tech roles in a managerial capacity. Since it will be in-house, the candidate need not be trained on everything like a new hire as he/she already knows your work culture.
Reduce Hiring Time and Window
Some businesses have an extensive hiring process and window. And this can make hiring a long and tedious process. It also has the danger that the current candidate may be also applying for a job in another business with a shorter hiring process. If the candidate has the skill, your competition might likely hire him/her. Hence, carry out recruiting quickly, and reduce the time of hiring for that.
Effectively Retain Current Talent
Losing a trained and experienced professional that you have invested a lot to develop and upskills is extremely challenging for businesses, especially now. Hence, one of the best ways to face the tech talent crunch is to retain the talent. It is said that employees leave managers and not companies.
Hence, ensure that you have the best leadership culture and a supportive, enriching business environment. This will stop your top talent from leaving your company.
What the Current IT Talent Crunch Can Lead to If Not Addressed Now?
Every business needs excellent talent. The fate of the tech industry is also dependent on how well tech professionals can perform. And if there are no professionals to do the job that only they can do, then there will be chaos.
The current IT talent crunch is a brewing tempest and it is a catastrophe in the making. Although not everyone is talking about it the same, those in the recruitment industry are talking about it. People in the CIO circles are talking about it. So there is an imminent danger if the current crisis is allowed to grow and reach levels beyond our grasp.
If that were to happen, the following is certain to unfold:
Inflated Cost of Talent
When there is a shortage of talent, candidates with adequate skills and experience will be in great demand. This will drive up their remunerations to greater heights and it would be highly expensive to hire the right candidate as there would be other companies who will be willing to shed more on talent.
Increase in Cost of Production
As the talent is going to cost more, businesses will have to deal with the increased cost of production. This will lead to products and services costing more for the end-users across industries.
Effects on the Quality of Services
As businesses will not have enough talent to take care of various aspects of their operations, the quality will fall. The end-users will be left with products and services that will be subpar in multiple levels.
Loss of Revenue by Companies
With businesses trying to grab talent as they need, they would have to spend a large chunk of their revenue on hiring top talent and retaining them. This will have a direct impact on their revenue and result in diminished returns.
Those businesses with the financial might will hire the tech talent while smaller businesses will be left in the dark. This will create a situation where bigger businesses will get bigger and smaller ones will be pushed down to perish.
With not enough talent to take care of various aspects of businesses and running them, the production rate will trump. This will lead to an economic slowdown. Such prolonged slowdowns will roll over and trample the entire world economy.
How to Hire Top-Tier Talent and Retain Them Amidst These Challenges
Hiring top talent and retaining them is always a challenge. It has always been difficult to keep talent satisfied and retained. It is all the more difficult for businesses to do it now when every other big tech company is vying to get the right candidate.
How can a business face this challenge? Whether you are a client, vendor, or agency, everyone needs the talent to run their business–and you need to address this. Here is a list of things that you need to keep in mind to hire the best talent:
Create fruitful relationships with staffing firms to recruit the talent that you want as your own HR professionals would be busy with in-house responsibilities and employee relations.
Create options for video interviews as there are plenty of means to do that thanks to technology. We are not talking about typical Zoom interviews here. Ask the candidate to create an introductory video and upload the same. Also, give the candidate 4-5 minutes to answer a couple of questions during the interview. This way you know the performer that the candidate could be.
Use instant messages to communicate newer roles to your potential candidates. It is reported that text messages are much more often read than emails. Also, when the candidates are interested, send them the details of the role via text messages with a link and other company details.
Use social media to find talent. Creating a strategy to engage with the right candidate and get to know them can do wonders for your business. If the candidate can understand your business better through engaging interactions, the likelihoods of them working in your company are higher.
There are a bunch of factors that a candidate considers before accepting a job offer, especially in the IT industry. Here is a graph that shows and how important such factors are for IT professionals when looking for jobs:
From this, a recruiter can understand how important it is to keep these elements checked in one’s organization to keep the talent retained. Apart from the very work-related factor that is languages, frameworks, and technologies that a candidate has to work with, all other elements have to do with the company’s culture.
More than 40% of the candidates consider the company’s culture, flexible working schedule, career growth opportunities, and remote options important for them.
Hence, if you can keep up with these factors and make your talent satisfied with your offerings, they are destined to stick with you.
How Offshoring is a Huge Solution for the Tech Talent Crunch
One of the most effective solutions to resolve the current tech talent crunch is the option for offshore development. As there are many offshore development companies in India and Latin American countries, the tech crunch can be managed to a great extent.
Take a look at the graph here:
A large majority of offshore companies tend to have an exceptional talent for a range of projects and they can effectively meet your talent and technical specifications. The advantages of hiring an offshore development company are huge as it would offer you the flexibility and scalability that often becomes an area of concern with in-house staffing.
Offshore development centers can also be used for multiple projects and the talent can be shuffled easily, too. This will help businesses manage the talent shortage to a great extent as the business would not need to look for different talent every time a new project comes up.
It can be easily managed with an offshore development center where a new team with an adequate skill set can be constituted.
Although there must be more permanent solutions and the number of adequately skilled IT professionals need to be increased, right now the best option to tackle the crunch is offshore development companies.
There is no doubt that the global IT talent crunch is a unique predicament that most businesses find themselves in right now. It requires conviction and out-of-the-box thinking to address the same effectively. However, with more and more businesses looking to tackle this issue with offshore development centers, the demand for such centers is racing uphill, too.
Hence, those who wish to get ahead of the curve must act now. Negotiations and preliminary talks to etch effective offshore contracts must start now. Or, the competition might get ahead, and you will find yourself in a more challenging situation.
Therefore, businesses must start the homework now, and Fullestop can offer you all the support that you need. With incredibly experienced, skilled, and qualified talent poop supported by extensive, cutting-edge technology, and management with a unique customer-centric vision, Fullestop can be your comprehensive partner to battle the IT tech crunch now.