Anyone who looks for, hires and manages IT and software development talent knows not only how difficult it is to find currently, but also how challenging the process has been historically— particularly over the last 20 years. The scarcity and expense of technical resources is by far the #1 obstacle to business growth worldwide, but very few understand exactly why this is the case. With this in mind, let’s take a moment to explore how the scarcity of IT and software development talent has evolved, why it still exists, and what you might be able to do about it going forward.
Rapid Technological Advancements Started Everything
One of the primary reasons for the scarcity of IT and software development talent is the breakneck speed at which technology evolves and has been evolving over the last 2+ decades. The list of life-changing technologies that have accelerated business just since the year 2000 is nearly too long to document—high speed internet, cloud services, e-commerce, mobile apps, video streaming, machine vision, blockchain currencies, artificial intelligence . . . you can see the issue almost immediately. This rapid pace of technology advancement has created a perpetual gap between supply and demand for those technology experts who are remaining current.
Education and Training Lags Compound the Issue
Despite the growing demand for IT professionals and software developers, traditional education systems have struggled to keep up with rapidly changing industry requirements. Many institutions find it challenging to update their curricula in real-time to align with the latest technologies and trends. As a result, graduates often enter the job market with skills that are already outdated—requiring additional training to bridge the gap between academic knowledge and current industry demands. Adding to the problem is the fact that organizations are requiring IT and software professionals to contribute IMMEDIATELY, which tips the compensation curve in the favor of those with experience.
Intense Global Competition Creates Scarcity
The globalization of technology and innovation has intensified the competition for IT and software development talent, particularly over the last 10 years. Companies of literally any size now have the ability to source teams from around the world, resulting in a marketplace that is no longer bound by geographical lines. While this change has certainly expanded the pool of available talent for many firms who are good at finding it, it has also increased competition among businesses who are all seeking the same skilled professionals. And as noted previously, increased competition leads to both scarcity and higher rates across the board.
Shifting Expectations Make Talent Harder to Attract and Retain
The evolving expectations and preferences of the workforce have played a significant role in the scarcity of IT and software development talent. Millennial and Gen Z professionals particularly, who make up a substantial portion of the tech workforce, commonly prioritize less measurable factors (work-life balance, flexibility, and a positive company culture) over tangible factors like base salaries and hourly rates. And companies that fail to align with these hard-to-define requirements will often struggle to attract and retain IT and software development talent, without any knowledge as to why.
Rise of the Gig Economy Offers Freedom of Choice
The rise of the gig economy and increasing number of freelancing opportunities have provided tech professionals with alternative career paths, which often lead to more freedom, more variety of work, and of course even more choices for experienced IT and software development talent. Many of the same people your company is attempting to hire on a full-time basis are taking advantage of freelancing and consulting models to achieve greater autonomy, flexibility and diversity in their workloads—and actually prefer the idea of working for multiple companies a few days per week each, versus working for one company every day per week.
A Different Hiring Strategy May Be the Solution
WIth all of the above in mind, the question “What can we do about this?” still remains. And the good news is, there may be an answer. In many cases, nearshore IT outsourcing can offer businesses the opportunity to quickly fill individual IT and software development roles—and even full teams of roles—at a much lower cost and level of risk than attempting to hire directly.
If cost savings, quick access to a skilled workforce and cultural compatibility are important, nearshore IT outsourcing may be the correct strategic choice for your company. If you would like more information on nearshoring an IT or software development team, please feel free to contact Excel directly by calling us any time at (612) 208-7465, or by completing the Contact Us form on our website. We look forward to hearing from you!