2020: The Spectre of the Technology Talent Crunch

2020: The Spectre of the Technology Talent Crunch

The Spectre of the Technology Talent Crunch


IT Outsourcing is an exponentially growing Industry that is about to face a drastic skill shortage, according to expert analysis. A projection by the Global Sourcing Association(GSA) shows that on the Customer side, 70% of companies surveyed are going to outsource their IT needs and 35% plan to do so in a significant measure. On the Service Provider(both Internal/External) side, as many as 84% expect the Outsourcing industry to grow and 37% believe it will do so at a rate that has not been hitherto witnessed.

From 2017 to 2022, the IT Outsourcing market is set to grow from USD 64.3 bn to USD 409 bn, predict analysts at Technavio.

The Challenge:
However, it would pertinent to note that these growth figures are indicative of a rapidly emerging need, and not necessarily assurance of the adequate fulfilment of the same. In this regard, one of the most crucial issues facing the market is the Technology skill gap. A CIO survey jointly conducted by Harvey Nash and KPMG shows that this is at an all-time high.

One of the most important and interesting findings of the survey indicates that the single biggest reason senior technology leaders outsource is to gain access to technology skills that are not available in-house. As many as 45% of respondents said they outsource for skills, while 35% were focused on costs savings.

Talent & Skill shortage: Findings & Key need areas

Large, Older & Legacy system-oriented companies are finding it harder: As per survey findings, relatively smaller, newer organisations are managing to cope with the talent deficit. However larger and older businesses are finding it a challenge to meet even 50% of their Technology talent & skill requirements

Automation -an imperfect, knee-jerk solution to Talent crunch:
This has led Company Boards to urge management as well as technology teams to place Automation of jobs at a priority.

However, this is a highly complex task, it requires readiness to make a paradigm leap from existing status quo, and most importantly, it also requires a unique and high degree of talent expertise to set up, manage, monitor and run these systems as well. It therefore does not eliminate the “people” component of this challenge.

The niche nature of skills in demand : Professionals with expertise in emerging fields such as, data analytics, automation, cyber security, and artificial intelligence are in high demand—and short supply.

A Quantitative Look:
Let’s take a look at the findings excepted from a study by Greycampus, a specialist in the field of skill upgradation, outlining some of the skills in high demand and proportionately low availability:

Cloud Computing: The number of cloud computing job openings available worldwide stands at 101,913. In 2018, the recorded median salary was USD 146,350. And the cloud industry’s revenue is predicted to reach $300 billion in two years. Yet the demand-supply gap still exists, with tough competition for existing talent.

Artificial intelligence(AI): is expected to generate more than 2 million jobs in2020, across various fields such as Health, Education, and Public Utilities

Data Science: as per “Indeed” the well-known job site, the demand for data scientists increased by 29% in the past year

Digital Marketing: proliferation of digital marketing applications is boosting the number of job openings in this space. So far, experts expect to see 20,000 open job opportunities in 2024

UI/UX Design: across various global job sites, findings have revealed more than 150,000 UI/UX open job opportunities. This massive demand for the skill explains the inability of companies to keep up with needs

Natural Language Processing: Natural Language Processing (NLP) integrates computer science, information engineering, and artificial intelligence. It aims for computers to understand human languages. The UK alone has more than 55,000 jobs openings in Natural Language Processing, yet it is a term understood by few qualified professionals in the field.

Trends observed in the Global Sourcing Association(GSA) Survey:

GSA survey

A Crystal Ball -Into The Tech Talent Crunch Challenge

Gartner predicts that in the US by 2020 there will be an industry side Technology talent shortage that universities and educational institutes won’t be able to fill by 30% in terms of capacity.

In addition, over 70% of technology employers in the United Kingdom expect to face a talent shortage over the next 12 months. It is estimated that 600,000 vacancies in digital technology currently cost UK £63 bn a year.

A Paradigm Shift: This will lead to an exponentially increasing trend of talent deficit that will have to be addressed by the use of Outsourced Global talent, specifically Offshoring to leverage the rising pool of custom-built emerging talent, exploit cost arbitrage advantages and the growth of Offshore provider(Internal/External) in scale & scope. Another driving force is the evolutionary change in their mindset in Offshore entities to work, not just as service providers, but as strategic partners and extended arms of the parent company/customer*
Source: Gartner

These trends will drive the rapid growth of 3 models of Outsourcing

a. Traditional Outsourcing: A company’s Technology needs addressed partially by Offshore Third-Party Software Services providers, typically on a project or maintenance contractual basis

b. Captive Centres: Company-owned/self-owned Offshore Captives((also known as Global In-house Centres(GICs)/Global Capability Centres(GCCs)) painstakingly built to address technology requirements in a more holistic and integrated manner

Read how the GCC/GIC model is driving Global Outsourcing: India Shining-Catalysing the GCC revolution

c. The ScrumStart Virtual Captive Model: Transforming Service Delivery via Virtual Captives:

At ScrumStart (www.scrumstart.net), we partner numerous Fortune 1000 and smaller, dynamically growing companies alike to enable them set up their own Captives/Global In-house Centres via a unique model called The ScrumStart Virtual Captive (SVC) Model. Our turnkey model covers the entire process of GIC/Captive setup and 24*7 daily operations-with Zero CapEx investment & a transparent, trust-based pricing model.

Clients have the option to completely transfer ownership of all assets of the incubated, fully functional Virtual Captive including resources, infrastructure as per pre-decided Contractual agreements.

About the Author:

Santosh Panicker1

Mr. Santosh Panicker

Mr. Santosh Panicker, CEO ScrumStart, is a specialist in setting up business processes and has established himself as an inspirational leader in the corporate world. Mr. Panicker has demonstrated his capabilities in setting up end- to -end HR, legal, and business process operations for 9 start-ups through his career years. He has over 22 years of experience working across diverse industries including IT, FMCG, Retail, Automobile and consumer durables with blue chip companies

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