Talent shortages are the top reason why IT executives had trouble adopting 64% of new technologies, followed by costs and security (in a global Gartner report cited by Forbes). If you rely on onshore staffing, that shortage will continue. The U.S. Department of Labor projected that the current talent gap for software engineers could reach 85.2 million as soon as 2030.
According to the United Nations, there’s also been a steady decrease in humanity’s birth rates compared to the population boom of the ‘50s—declining by about half from 1950 to 2021. By 2050, the UN estimates that women will have two children each. Some nations have an even lower number, leading to the Great People Shortage.
These trends combined are bad news for the tech industry. From Washington D.C. to Wall Street, the United States and other major tech nations are searching for solutions to smaller talent pools.
Long-term strategies for this have already begun, such as the Deep Tech Talent initiative from the European Union. But innovation waits for no one. Businesses will have to adapt to survive and fast.
A Shrinking Global Population & Expanding Tech Industry
The hiring needs of tech giants and startups are growing too fast for Silicon Valley to keep up with alone. A diminishing population worldwide will only make the demand for skilled IT employees even higher. Big tech companies will face sky-high salaries to get the best talent, and entrepreneurs likely won’t be able to compete at that cost.
So, what is the solution to the looming Great Labor Shortage?
Worldwide Software Outsourcing
Rather than waiting for a declining population to cripple our global economy, creative thinkers are rising to the challenge. Pioneers followed globalization trends to an effective solution for talent gaps: software outsourcing.
Before talent gaps were a concern, outsourcing was often used for tasks that took up too much time, resources, and attention in-house. To free up their internal teams, C-level staff like Chief Executive Officers (CEOs) and Chief Technology Officers (CTOs) would assign those responsibilities to outside teams. Common service models included accounting, customer service, marketing, IT management, and other business functions.
Now, nearshore software outsourcing has grown to meet the demand for experienced technical staff. These flexible teams can adapt to individual businesses and broader needs.
Read: The Future of Digital Transformation
Applications and Benefits of Software Outsourcing Teams
From right-fit teams for specific projects to improving workplace efficiency, outsourcing software development pays off. Here are some examples of how this practice has helped companies of all sizes with igniting their digital transformation:
Technology consulting:
With a possible recession on the horizon and the Great Labor Shortage, having a digital roadmap for your business can determine your success. Strategize with high-touch, tech-agnostic experts who can share their insights backed by years of experience. Look into case studies and NPS scores for potential partners, so you know their teams can be counted on to align to your values and vision.
Digital innovation:
Because of the pandemic safety measures, global digitization increased 22% from 2019 to 2020. Compared to the stagnant or slow growth before, that was an incredible leap. It called for a lot of qualified digital talent to make it happen so quickly. That over hiring led to the layoffs we’re seeing in Big Tech now, from virtual reality companies like Meta to fintech services like Stripe.
As SMBs and startups try to scoop up new talent, traditional hiring will turn into a race. Partnering with an outsourcing vendor guarantees that you’ll have pre-vetted, scalable teams who are ready to work on your projects in a fraction of the time.
Flexibility and cost savings:
As the average salary for tech talent climbs into six figures, an outsourcing agreement with a set rate is a game-changer. Concerns about a recession are clear, as 70% of enterprises said reducing costs was the main reason to outsource (in a recent Deloitte survey). But in the bigger picture, savings typically take a backseat to flexibility and product quality. With nearshore outsourcing, you can get all three to have a lasting impact on your product ratings, time to market, and bottom line.
Experience the Devsu Difference
With over a decade of experience, Devsu has launched over 500 projects ranging from mobile-first websites to updating legacy software. Our NPS score from clients is +91 and from employees is +78, well above the industry average. We are one of the fastest-growing nearshore providers in the region, with a YoY growth of 94% and a presence in 17 countries. Talk with us today to see how our award-winning talent can help you launch projects and inspire digital innovation.