The shortage of IT professionals in The Netherlands is already significant, but expected to grow even further in the upcoming decades. A research report written by consulting firm BCG even mentions a shortage of 50,000 IT professionals by 2054. This trend obviously has a serious impact on IT companies. About half of them is already struggling to fill job openings. What can companies do to still acquire the services of good IT personnel in a tight market? And what role can outsourcing play in this endeavour?
Overtaken by Asia
The competition of other countries is one of the main causes for the scarcity of well-educated IT professionals on the Dutch and broader European market. Much of today’s competition comes from Asia. Nations like China, Taiwan and South Korea have shifted their aim towards the IT market much earlier than most European states. The result is that the aforementioned Asian countries now have access to a large and well-trained army of excellent IT professionals. Besides the rise of tech-driven countries in Asia, many IT companies point out that Dutch IT professionals often don’t possess the necessary competences, especially when it comes to complex segments of the IT landscape like software development.
Finding IT professionals becomes harder
The IT staff shortage is good news for highly educated and talented IT professionals. The chances on interesting and highly sought-after jobs are excellent, whilst their financial negotiation positions change for the better. However, the limited availability of suited personnel means that IT companies have to go to much greater lengths to reel in the right tech professionals. After all, everybody is recruiting from the same small talent pool. This means you have to offer extra benefits to make your organization the company of choice.
What makes a company interesting for IT professionals?
Despite the scarcity, there are still a couple of good ways to make your company stand out from the rest. Examples are flexible working hours and attractive locations (the ability to work in the city centre of Amsterdam, amidst all the urban hotspots of the country’s most popular city, is an important asset for young IT professionals). High salaries, permanent contracts, good career options, extra training and education, employer branding and offering an interesting package of secondary benefits are other ways to enhance the status of your company amongst potential employees. Yet the reality is that not all firms are able to meet these requirements. This means that you are often obliged to look for alternatives.
Outsourcing as the solution for IT staff shortage
Even highly attractive businesses, which have all the assets mentioned above, find it nearly impossible to attract good IT professionals in today’s market via traditional recruiting channels like job advertisements. A lot of IT experts think that outsourcing IT tasks is the best way to tackle the low availability of skilled professionals. After all, outsourcing gives you access to candidates and expertise from outside your own region or country. But what specific form of outsourcing is the best option? We will show you, based on the following key concerns.
Develop a clear strategy
To build and smoothen an outsourcing process, you should first develop a good strategy in accordance with your outsourcing partner. By doing this, both parties address important issues, bottlenecks, wishes, needs an peculiarities.
Clarity and open contact
We can’t deny that it is important to properly document and bookmark crucial agreements and important juridical details in a solid contract. However, in the case of software development outsourcing weighty documents are not always the holy grail of success. Mutual trust, honest an open contact and good, solid and transparent forms of collaboration are the main ingredients of a solid and long-lasting partnership. Nourish open contact and short communication lines to generate a click between your business and the outsourcing company. Make sure to also pay attention to the needs and wishes of the supplier. Remember, software development outsourcing is a joint effort and means working together!
Identify your needs
Looking for a good outsourcing partner means identifying what you exactly need. What expertise and which special skills should the IT professional of your choice possess? What kind of people do I need to streamline or perfect certain business processes? How high is my budget? And what is the scope of the project that is being outsourced? Identifying and mapping out these issues beforehand greatly increases the chances on a good match and successful collaboration.
The efficiency of outsourcing
Working together with an outsourcing partner makes your company more efficient and flexible. Especially tasks that require specific knowledge, aren’t your core business and prove hard to combine with daily business activities are really suited for outsourcing. Outsourcing therefore often leads to the flexibilization of your service range.
The specialists that outsourcing companies provide usually work on a broad range of projects and for a wide and varied spectre of different organizations. They know the ins and outs of the IT universe and are well informed on the latest technological and commercial developments within their field of expertise. Hiring these people, while at the same time relying on traditional recruitment techniques, is both financially and time-technically a nearly infeasible task given the current IT market conditions.
What type of outsourcing do I choose?
There are of course several ways to outsource. But what is ultimately the best form to adequately deal with the problem of IT staff shortage?
- Secondment is a minimalistic type of outsourcing. The customer manages and controls the project, while the outsourcing company is solely responsible for training the IT professional.
- Out-tasking takes the outsourcing process one step further and involves the transfer of a specific task to a specialized party. This mode of operation is useful for fast-growing companies that quickly want to purchase a specific service. Out-tasking is usually not the way to go when it comes to implementing and coordinating big and multifaceted projects.
- Standard outsourcing means that a process or project is entirely outsourced to an external party using service levels. Standard outsourcing is an excellent way of finding the right IT professionals when the supply of experts is low.
- Offshoring or nearshoring refer to outsourcing tasks or projects to another country. In the case of offshoring, you relocate tasks to faraway countries (call center services in India or software production in China are prime examples). Nearshoring involves the relocation of tasks to more nearby countries like Hungary, Romania or Russia. Language barriers, cultural differences and alternate time zones are potential disadvantages of offshoring and can sometimes lead to communication problems. These problems aren’t that prolific when it comes to nearshoring, especially since the differences between the countries involved don’t tend to be that big when you choose this form of outsourcing. Nevertheless, it is always wise and advisable to immerse yourself in the unique features of a country before you decide to outsource a task or project to a foreign party. When you do that, offshoring and nearshoring are excellent ways to quickly get access to the right expertise if there is a shortage of IT professionals in your area. An extra advantage is cost reduction in the field of salaries and project spending.
- A business model that is also sometimes used in today’s outsourcing market is the shared service centre. The underlying idea of this form of outsourcing is that companies bundle the demand and cooperatively set up an accountable entity within a multi-unit organization tasked with supplying the business unit, respective divisions and departments with specialized services.
The expectation is that the shortage of IT professionals is going to endure for quite a while. Experts even suspect that the problem will slightly worsen the upcoming couple of years. Even when you devote extra attention, resources and money to human resources, recruitment, secondary benefits and extra training opportunities, filling job openings and getting the right people for a specific project will most likely prove to be a mammoth task.
This means that it is wise to consider alternative recruitment strategies if you want to get top-notch IT professionals. Outsourcing is more and more becoming the most targeted – and often only – method to solve staffing problems which are the combined result of a shortage of good IT professionals and a growing project marketplace. Standard outsourcing, offshoring and nearshoring offer excellent opportunities to acquire the desired knowledge and expertise for your project in today’s marketplace.
Would you like to know what E‑ngineers can do for your company in the fields of outsourcing, general IT expertise and software development? Then don’t hesitate to contact us.