How Companies Can Acquire IT Talents Despite Shortage
Talent shortage, especially software engineering talents, will become a global challenge that companies have to deal with for the next three to five years. In such a context, finding or accessing the demanded software engineering talent becomes an urgent issue to meet the business needs of the company. In order to investigate and have an understanding of the various techniques and channels for talent acquisition, many ongoing initiatives were launched by organizations to understand the issue better.
A wide range of recruiting methods were used by business organizations in the past years. These required both investment of time and resources and a consistent approach. However, there is still a global imbalance between the demand and supply of talent (namely engineering or IT talent), and the talent-access issue must be addressed much more systematically due to the talent shortage and the increase in hiring for engineering or software skills after the COVID lockdown.
The root of this situation is following the factors below:
- The post-COVID economic boom with massive parts of the economy that is doing pretty well and hiring more than before. Moreover, the post-COVID can also bring wage inflation in this intense labor market.
- The COVID lockdown resulted in no job movement.
- Remote working due to the pandemic lockdown has negatively impacted the bonds between colleagues in the workplace, so employees became more willing and determined to move to another job. As a consequence, there is the 'Great Resignation' in which a rash of early retirements occurs and people decide to change their current jobs.
- More and more organizations assemble or build digital platforms that provide them more competitive advantages and allow them to manage their workers and supply chains in a more effective way. This leads to an increase in the talent demand. The platforms keep ever-changing, this can result in the escalation in the need for more engineering and IT talent.
Organizations may need to look beyond the traditional approaches and channels to find the required talent and survive the intense talent shortage since they could soon become obsolete and no longer effective enough.
Therefore, these 5 vehicles below might need to be considered by companies in order to deal with talent shortage:
1. Re-train your current employee
Organizations can take advantage of Ed-tech initiatives such as software engineering boot camps or training platforms to provide upskilling or re-training programs for their employees who want to move to different and/or higher positions or earn higher salaries. Aside from building their own boot camps or training programs, business organizations can hire them from other software outsourcing companies on a project-based basis.
2. Build on The Remote-Work Model
Aggressively building on the work-from-home model can help organizations expand their workforce. This model can broaden companies' footprint and help companies to recruit talents across the globe. Companies are enabled to work with software engineering talents that have the qualified skill sets in places such as Vietnam, Malaysia, and China. On the other hand, employees can work virtually, in their most comfortable zones, which can help companies avoid breaching the labor laws in the office workplace.
3. Build Offshore Development Center
There should be small to medium-sized centers consisting of 30-50 workers placed in remote areas, this can help organizations take advantage of the underutilized labor pools. For instance, companies should consider putting in place these centers here because it is a country with a skillful labor pool of fintech or financial services and software and technical expertise.
In the past years, there was a reduction in the cost of establishing offshore development centers because the leadership and ecosystems are now available in more countries, as well as the favorable real estate and tax conditions. Not only is it relatively quick for companies to establish an offshore development center nowadays, but also companies can manage these centers in a more cost-effective way.
Generally speaking, these offshore development centers are just office spaces (or subsidiaries) that are built with a transparent intention, that is to hire talents and capture a labor pool that is needed at a more reasonable price. With assistance from offshore development centers, companies can broaden their labor pool in different locations rather than going big in one location.
4. University Recruitment
Not only is this pipeline model believed to be an affordable-cost investment by large organizations and small firms compared to other methods, but it also provides a steady and robust flow of high-quality talent.
5. Utilize Services from Software Service Outsourcing Providers
Talent can be accessed through IT services vendors on an as-needed basis or on a long-term basis. On the other hand, these outsourcing services providers still struggle with the talent shortage just like their clients, despite the boom in the offshore software outsourcing model. Service outsourcing companies with a wider geographical footprint most likely have a better position to face this issue.
Because these service outsourcing providers also deal with the talent shortage, it is necessary for companies utilizing third-party services to have a balanced approach to avoid being in an extremely high-risk situation while aggressively competing in the marketplace.
During the process of assembling or creating a software product, a business organization's talent pool can be complemented by using talent from third-party providers such as a software development outsourcing vendor. However, because software products are getting more integral to the ability of a firm to compete, companies tend to search for opportunities that can help them get more control over their products, especially when these products and platforms evolve; this can be difficult to achieve through service outsourcing vendors.
Third-party providers having unaligned incentives is another challenge that companies using third-party providers might face. In this current generation with the boom in technologies, fixed talent is needed by companies, as well as persistent teams, where people work together over multiple years. Persistent or fixed teams can help companies significantly increase productivity. However, with the service providers' model, it is indeed a serious challenge, because third-party providers are allowed to move their talents once the project ends and bring in more junior employees of companies over time. As a result, this may potentially have a negative effect on productivity.
Companies prioritizing the value of persistent or fixed teams have to create a different relationship with their service outsourcing vendor, or else they should create their own talent structure.
With the acute talent shortage that can occur in the next few years, if organizations want to acquire IT or software engineering talent, they are suggested to carefully examine and consider each of the alternatives that were listed above.
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