Proven Strategy to overcome IT Staff Shortages

Today, IT managers and CEOs face greater staffing challenges than ever before. One major cause is the lack of the right IT staff.

Not only is there a shortage of the most commonly needed IT staff, but other factors are compounding the problem.

And make no mistake – it is a problem and a serious one. A study by Korn Ferry warns that by 2030, shortages of high-tech workers could cause US companies to lose an eye-watering US$162 billion in revenue a year!

Similarly, a recent survey of US IT leaders by IDC (International Data Corporation) reported that nearly two-thirds of them had missed revenue growth objectives due to a lack of skills. Due to the same issue, they also reported a decline in customer satisfaction and increased quality problems.

The same report highlighted that this skills shortage is a global problem, which could cost industries as much as $5.5 trillion (£4.18 trillion) in losses.

But it’s not all bad news! There is a solution. But first, let’s look at four reasons why IT staffing is problematic these days. You may be facing others, but these four are the most common:

  1.  Insufficient Supply of Skilled Talent

In a different IDC study, nearly two-thirds of the IT management contacted felt that a lack of skills was the cause of lost revenue. Over half had missed revenue targets, had product delays, and saw a clear drop in customer satisfaction. 

Many reasons are given for the terrible lack of qualified IT staff in the US. These range from insufficient emphasis in the education system to an aging demographic increasingly approaching retirement, but they are not being replaced.

Regardless of the reason, the fact remains that the US is facing a potentially difficult short-term period as far as IT staffing is concerned. That will negatively impact many companies. Will yours be one of them?

A Stack Overflow study suggested that as many as 79% of developers would consider changing jobs if the opportunity presented itself, with an additional 15% actively looking, which leads to staff turnover. Such possibilities compound the already severe shortage.         

2.  High Turnover Rates

Even when you have your dream team of IT specialists, the danger of one or more of them leaving can be a constant worry. A report by PWC stated that 28% of IT developers surveyed said they were either very or extremely likely to change employers within a year.

While it is likely that not all 28% will change jobs this year, it is unfortunate that at over 13%, IT has the highest turnover rate of any industry. And, subject to the actual skills involved, the turnover rate can be as high as 23%.

Statistically, the odds are not in your favor in keeping your team intact for long.

And that can be expensive. A recent study showed that by 2030, low staff retention will cost US businesses $430 billion. That’s across all industries, but it’s a good indicator of the potential damage to your bottom line.

What drives this high turnover? That is a topic for a separate article and is open to debate. Aside from the normal reasons for leaving, such as lack of recognition, poor conditions, bad management, etc., the very lack of staff is a big factor.

The shortage means that desperate companies headhunt rather than wait for applicants. That doesn't mean job ads don't pull in applicants. With a high demand for and a low supply of staff, offered salaries are rising and tempting even the most loyal staff in these uncertain economic times.

Replacing lost staff is expensive, and it's not just about the fees.

3.   Recruitment and Wage Costs

Searching for, interviewing, onboarding, and all the other tasks involved in bringing new staff into your team takes time and money. The time needed to complete the process varies based on the skills required and where you are in the country.

Costs vary dramatically based on location, with California and Washington each vying for the most highly paid position! Delaware can be almost 50% cheaper, but good-quality staff can also be harder to find.

Several states have additional laws to protect staff, which leads to higher costs. For example, California enforces a retirement plan and disability insurance, pushing staff costs way above their base salary.

The US Bureau of Labor produced statistics showing that, on average, wages and salaries in the IT industry were approximately only 65 percent of the total compensation package, while benefit costs accounted for the remaining 35 percent. The ratio increases the higher up the corporate ladder one goes.

4.    Keeping up with Ever-Evolving Technology

Ever-evolving technology is a two-edged sword. On the one hand, it helps us improve our efficiency, enhance the user experience, and drive up profits. On the other, it can be expensive to implement.

Hardware, software, and the skills to use new technology can be expensive. But it can be equally as expensive not to keep up if your competitors are doing so.

The number of new technologies is escalating year on year. AI is the current big topic. There is an element of fear of missing out, but AI can offer substantial benefits in the right situations.

It is one thing to justify the expense of new technologies, but quite another to find the right skills to implement them.

These are just four issues facing US businesses today that contribute to their IT staffing worries.

Let’s consider the good news – an easy solution is available.

Why is Staff Augmentation using Nearshoring the right solution?

That solution is staff augmentation. What is it? The Cambridge Dictionary defines augmentation as “the process of increasing the size, value, or quality of something by adding to it.” And that describes staff augmentation nicely.

By using staff augmentation, you are increasing the size, value, and quality of your existing IT team. However, as effective as it is, on its own, staff augmentation using US-based staff may not solve your staffing issues.

Unfortunately, the same IT skills shortage that plagues the US is impacting companies that provide US-based augmentation staff. The difficulty in hiring and keeping such staff in a competitive market is compounded by the high salary costs, which are inevitably passed on to you.

Nearshoring is a way to benefit from staff augmentation but avoid the issues created by using US-based augmentation staff.

As the name suggests, nearshoring involves using skilled IT staff from nearby countries, such as Mexico and those in South America. (Offshoring is different, involving staff based in countries such as India and the Philippines.)

By using nearshoring countries, such as Mexico, the augmentation staff share a time zone and culture similar to yours. With the right provider, they are also proficient in American English.

A big advantage is that these nearshore staff's availability, turnover, and cost make the process more stable and cost-effective.

The benefits of staff augmentation using nearshoring are considerable. Many companies across the US have found solid business reasons to use it and have seen the benefits of doing so.

5 Reasons you may need IT Staff Augmentation using Nearshoring

Here are 5 reasons why using staff augmentation using nearshoring may be attractive to you:

- A specific task or project requires specialized skills or expertise that your in-house team does not have.

- there is a temporary or seasonal increase in workload (and you need quick access to a large pool of talent to find the extra resources to handle it.)

- You want to reduce your operational costs and overheads (by hiring IT professionals who charge lower rates than your local market.)

You want to avoid the delays, higher costs, and challenges of hiring and managing full-time employees. (These costs can be significant, including recruitment fees, training, retention, payroll, taxes, benefits, etc.)

- IT staff with the appropriate skills are normally not available in your area, or the cost makes recruitment an unsuitable option.

Obviously, many other reasons have made this a popular and growing solution to IT staff shortages. Each business has its priorities and reasons – contact us to discuss how we can help you.

The flexibility of IT Staff Augmentation and Nearshore services

One of the great benefits of staff augmentation using nearshoring is its flexibility. You are in control. You can set the timeframe, the skills required, and more. For example:

You can access skills that meet your specific needs and expectations from a large and diverse pool of IT talent, select the individual(s) that suit your environment – and change them if needed.

- Depending on your project requirements and budget, you can scale up or down your IT team as needed. Only use the people you need and when you need them.

- By choosing when and for how long augmentation staff are hired, you can avoid the hassle of hiring and managing full-time employees.

-  Have complete control over the budget – no hidden costs. What you contract is what you pay.

Global Triangles – a reliable and experienced nearshore provider

For staff augmentation to succeed in your organization, you need to choose a provider with experience and proof of client satisfaction. This is even more important when considering nearshoring.

A reliable provider will have references and testimonials to back up its claims of good service. They should also have a flexible approach—the success of your business is more important than their standard methodology.

Global Triangles is a US-based IT staff augmentation and nearshore services provider with a single mission: to offer solutions that help you and your company achieve your goals at affordable prices.

They have been doing this for nine years. All of their clients will provide positive references – some have been clients for more than five years.

Global Triangles’ personalized services and reliable team allow them to be productive and reactive to new challenges that arise in each project. They pride themselves in generating agreements that work for your company and team.

Global Triangles is proud to offer a wide range of IT skills and experience, including software development, mobile development, software testing, artificial intelligence, e-commerce, and more.

A characteristic of this team is its loyalty. Staff are valued and treated as key assets, leading to an average staff retention much higher than the industry average. And that's good news for you!

If you have any questions or simply want to learn more, contact us today. There’s no cost or obligation.