An extensive report by Korn Ferry states that the US could lose out on $162 billion worth of revenues annually unless it finds more high-tech workers.
Surrounded by constant news reports that highlight the rise of robots, machine learning, and artificial intelligence in the workforce, businesses are having a hard time adjusting to these emerging trends.
Additionally, the continuous impact of the pandemic has disrupted tech companies, including well-established ones, as they struggle to attract and retain top talent.
If your company is among the affected ones in finding or building top-skilled tech teams – stay on this blog to find some solutions to address the shortage problem based on our experience as industry experts in hiring and developing IT talent.
Tech Talent Shortage: The Reasons Behind
Before we go into the potential solutions, let’s understand some of the main reasons why talent shortage has become a huge pain point in today’s tech market.
1. Supply Not Meeting Demand
The rapid growth of the tech industry has resulted in an unprecedented demand for skilled tech workers. Startups, established tech giants, and companies across various sectors are all seeking tech talent to power their digital transformation. However, the supply of qualified professionals is struggling to keep pace. One primary reason is the aging tech workforce, with many experienced professionals retiring, leaving behind a significant skills gap.
Moreover, the complexity of tech jobs has been increasing. The evolving nature of technology and the emergence of new tech domains demand highly specialized skills. Unfortunately, the education system and training programs have not been able to produce enough professionals with the required expertise, further exacerbating the talent shortage.
2. Escalating Cost of Hiring
As the demand for tech talent intensifies, so does the cost of hiring these coveted workers. Tech salaries have been steadily rising as companies compete to attract and retain top talent. The scarcity of skilled professionals has given tech workers greater bargaining power, leading to higher compensation packages.
While larger companies with substantial resources might be able to afford the increasing costs of hiring tech talent, smaller companies, startups, and those with limited budgets can find it challenging to compete in the talent market. This disparity can hinder their growth and innovation potential, leading to a lopsided tech industry.
3. A Global Talent Market
In the past, tech companies could primarily rely on local talent pools to fill their tech roles. However, the rise of remote work and the globalization of the tech industry have transformed the talent landscape, especially as a consequence of the recent pandemic. Today, the tech talent market is truly global, allowing companies from all corners of the world to access the same pool of skilled professionals.
This globalization has intensified competition for tech talent. US companies now find themselves not only competing with domestic rivals but also with international firms vying for the same talent. As a result, businesses must up their game and offer attractive incentives to lure talent away from foreign opportunities.
4. Fierce Competition and Employer Branding
The tech talent market is incredibly competitive, with numerous companies vying for the same skilled individuals. To stand out in this crowded field, businesses must offer more than just competitive salaries; they must build a strong employer brand and foster a positive company culture that appeals to tech professionals.
Tech workers are increasingly placing more value on work-life balance, professional development opportunities, and flexible work arrangements. Employers that can create a supportive and innovative environment are more likely to attract and retain top tech talent. Neglecting these aspects can lead to high turnover rates and hinder a company's ability to achieve their revenue goals.
How Tech Talent Outsourcing Can Help Overcome These Challenges
Tech talent outsourcing can be a strategic solution for businesses to overcome the challenges posed by the increasing demand for skilled tech workers, disruptions caused by the ongoing pandemic, and the competitive nature of the global tech talent market. Here's how tech talent outsourcing can help:
1. Access to a Global Talent Pool
Tech talent outsourcing allows you to tap into a diverse and expansive global talent pool. Instead of being limited to local candidates, you can now connect with highly skilled professionals worldwide. This widens the talent search and increases the chances of finding individuals with the precise expertise needed to fill specific tech roles.
Hiring and retaining top tech talent locally can be costly, especially in regions with a high cost of living. Tech talent outsourcing enables companies to work with professionals from regions where the cost of labor is lower, allowing for reduced costs without sacrificing skills or quality. This cost advantage can significantly impact a company's budget, allowing it to allocate resources to other critical areas of business development.
3. Faster Time to Market
In-house recruitment processes can be time-consuming, leading to delays in product development and project execution. With tech talent outsourcing, you can quickly assemble teams with the required skills, experience, and expertise. This agility helps speed up the development and launch of products and services, allowing businesses to stay ahead of their competition.
4. Flexibility and Scalability
Tech talent outsourcing offers flexibility in scaling teams up or down based on project requirements. Companies can quickly adapt to changing workloads, seasonal demands, or short-term projects without long-term commitments. This flexibility ensures that businesses can efficiently manage their workforce and resources.
5. Access to Niche Skills
The tech industry is rapidly evolving, and there is a constant demand for professionals with niche skills and expertise in emerging technologies. Local talent pools may not always have individuals with such specialized knowledge. Tech talent outsourcing allows businesses to connect with experts in these niche areas, ensuring they have access to the latest and most relevant skills.
6. Mitigating the Impact of Pandemic Disruptions
The pandemic has disrupted the traditional work environment, making remote work more prevalent. Tech talent outsourcing aligns well with this new remote work trend, as businesses can collaborate with remote teams seamlessly. It allows companies to continue their tech projects without being constrained by geographical boundaries or the need for physical office spaces.
7. Focus on Core Competencies
By outsourcing tech talent, businesses can offload the recruitment and management of tech teams to specialized firms. This allows them to concentrate on their core competencies and strategic goals, leaving the talent acquisition and HR processes to experienced outsourcing partners.
Tech talent outsourcing offers a wide range of benefits that can help you overcome the challenges of recruiting and retaining skilled IT professionals. Embracing this approach empowers businesses to focus on innovation and growth while leveraging the expertise of talented professionals worldwide.
If you need help finding the right tech talent for your current team or upcoming development project, book a free consultation to learn how we can help.
The future of tech talent outsourcing seems bright, with the practice poised to continue fueling the tech industry's growth and innovation. As the demand for tech talent intensifies, businesses will increasingly turn to outsourcing as a viable solution to access a global talent pool, reduce costs, and remain competitive.
With its ability to offer specialized skills, flexibility, and the benefits of remote work, tech talent outsourcing is well-positioned to be a crucial driver in helping companies stay at the forefront of technological advancements and thrive in the dynamic tech landscape.