We are still dealing with the aftermath of the global pandemic that has ruled our lives and business since early 2020. Economies in Europe are rebouncing, unemployment levels are sinking and projected GDP growth is promising. Though at various rates, this leads to renewed investment within the tech sector across large European markets according to the Comptia European Tech Trends report (full report available for download here).
It is evident that the uncertainty of 2020 meant that new hiring was postponed in most of the companies regardless of size and revenue. Now the activity is booming because a lot of companies are trying to backfill open positions within software development and IT-infrastructure. The competition for available resources is fierce. There are simply too few experts available on the market to meet the all time high demand.
So what can you do to attract the right people to work for you in the current situation?
Here are seven common strategies many executives turn to when in need of IT-competence. There are pros and cons with each. Lets us take a closer look:
1. Hire junior people and grow them. This strategy is often applied in large companies with significant capabilities to invest in junior employees to bring them up to desired performance level and speed.
Smaller companies and start-ups have neither resources nor the time to do it. The risk for large companies is that once juniors gain experience they may start looking for other employment opportunities just for the sake of change and benefits. It is increasingly difficult to keep young people in the same company for more than 2-3 years.
2. Hire experts in another area and train them in your technology or domain. This strategy is executed in both larger and smaller companies due to lack of resources in general.
However, the expectations to seniority level are often crushed when the expert is faced with a new domain or technology. It involves time and resources to get these people to deliver value. The upside is loyalty to the employer since more senior people are less prone to job-hopping.
3. Spend more time looking for the right competence. This strategy is used widely nowadays. Is it even a strategy?
From the perspective of time-to-market for a product, or developing tools to increase efficiency, or for any other reason you are hiring a developer? This is a lose-lose option. When numerous companies are doing the same, the longer time goes – the less likelihood there is to get hold on the right competence.
4. Find ways to become a more attractive employer. Ipsos Mori reported that almost seven in ten companies in the UK have struggled to fill at least one vacancy in the past two years*).
Record number of job offers are one of the reasons the market is going dry of available resources. The challenge is to help the candidates choose your company. Increasing number of companies with limited resources lose this battle as research confirms.
5. Broaden your reach to remote locations and relocate people. This strategy is growing in popularity as more and more executives recognize the importance of getting IT-resources onboard regardless of geographic location.
However many hope to get the people to move in closer physical proximity so that they can fully participate in the company’s life. This has proved challenging, amplified by the pandemic.
Senior experts do not want to relocate any longer. They prefer to work remotely and keep their local networks of family and friends. Another significant factor when considering relocating is the cost of living. Remote work brings better salary from high cost-of-living areas to allow for much better living standards in lower cost-of-living regions in Europe. This is appealing to such an extent that some experts started relocating to lower-cost European countries while keeping their well-paid jobs in high-cost countries. Company executives who recognize and encourage this development do much better in recruiting IT-professionals.
6. Outsource the whole IT-project to a software development company. Many large and small software companies focus on the end-product and deliver on the objectives set by the client.
Often this leads to project knowledge and control accumulating with this third party and not within the client company. In-house competence suffers and project costs escalate. The longer time goes, the more dependent you become on the consultants for progress. While it may be an acceptable strategy in some sectors, for most companies this is not a desired development.
7. Partner up with a local agency abroad to acquire highly qualified IT-experts. This strategy is fairly new
, driven by ever increasing competition. Rather than outsourcing a project to a third party, executives start to source in developers remotely and treat them as their own employees. Local in-market partners deliver value by screening candidates and managing the relationships with hired experts locally. Formal business relationships with IT-experts may be contractual or through direct employment. This depends on agreement between the client, agency and the candidate. The benefits of this strategy are evident. It allows you to get resources with desired skill level in a fast and efficient manner from a much larger pool of available candidates. It saves costs and valuable time while accumulating organizational knowledge and keeping control of the processes. The drawback is that companies have to accept remote work within the IT-department as the norm. Many companies (or their leaders?) are still skeptical of this way of working long-term, therefore they try all other strategies listed above before they arrive at this option.
Why not start here, and save yourself a lot of headache? While many of your competitors still hesitate, you will increase your chances to get ahead in this game.
Imagine your team extended within a month, or a whole new team engaged and working on your project to get it to the market faster. You can lead dedicated people and monitor their progress the same way you would with your employees. Yes, they work remotely, but that is no longer an issue for any business as proved during covid lockdowns. These people stay with you just as you would expect your loyal employees, so you can build up the knowledge in your organization. This is a win-win, so why miss out?
Nearshoring is an effective model – engaging the people, not just offshoring a project. You keep control, cut the costs and ensure knowledge within the company. People hired are not just fitting the tech profile, but with the soft skills and personal chemistry to work as part of the wider team.
If you are looking for a partner to help you on this journey, you are welcome to reach out to us for a discovery call. From the experience with nearshoring on the client side, we know all the pitfalls and work hard to avoid them. We have clients in DACH, Nordics, UK and Hungary. Our IT-experts are Hungarian. They use an agile approach and participate in the whole creative process of developing your product. Our people bring perspective, best practices and their international expertise.
If you would like to explore this opportunity, you are welcome to BOOK A DISCOVERY CALL, or Leave your question here and we will get in touch.
To download the full report cited above, please click here.