Need IT Talent? When (and Why) To Look at Outsourcing

Now that every company is a tech company — everyone from manufacturers to financial services firms to nonprofits is hiring more IT staff — competition for IT talent is at an all-time high. Mass migration to the cloud is compounding the shortage, particularly for experienced IT staff with the right skill sets.

When is the struggle to keep up with your organization’s IT staffing needs not worth the effort and cost? Here are five examples and Gartner’s take on the talent gap risk:

1. When you struggle to sweeten the pot

To attract the right talent, your organization not only needs to match your competitors’ offers but it has to do even better. Matching salary, vacation time, 401K plans, stock options, and other monetary benefits aren’t enough. You also have to offer benefits related to work schedules and lifestyle perks. The annual CIO Survey by IT outsourcer Harvey Nash and auditing firm KPMG found the majority of today’s IT workforce – 62% – wants flexible work schedules. More than a third want regular social events, achievement incentives, and remote work opportunities (34%). Some also look for things like on-site or free gym membership and free food.

Another way to sweeten the pot for candidates is to lower your candidate requirements. Providing on-the-job training can be a very attractive offer – if your organization has the capacity, that is. But while this may broaden the talent pool to choose from, it can leave you with current unmet needs and require a lot of insight into what you’ll need in the future as technology continues to advance.

Even if you put together a sweet package with plenty of perks or can provide training, there’s still a lot of competition for few IT candidates. Rather than try to compete, many companies find outsourcing is the better option. Let the outsourcer deal with the details.

2. When you might not have the most attractive company culture

When employees hold the power, as they do during talent gaps, organizations must spend more time looking at themselves from the point of view of prospective employees. What does your corporate culture look like to those on the outside? What’s your online reputation? And what are your current employees saying and sharing about you in person and on social media?

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Powderkeg, a community that connects technology innovators, found that company culture is the single most important factor to tech talent when deciding which position to accept. It’s even more important than the actual package you offer.

If your company has a reputation as a great place to work and your employees talk you up, then you definitely have a leg up. Better yet if you also deliver a product or service that tech employees can become passionate about. Having a passion for the end product or service ranks a close second to company culture. Actual compensation ranks third in Powderkeg studies, and sometimes even lower. And your organization’s IT infrastructure? It should be best of class to retain IT employees whether there’s a tech talent shortage or not.

If your organization can compete on culture and passion potential, Powderkeg recommends trying a culture-first recruiting strategy. This includes focusing on attracting people who already have a cultural fit, and hiring people who already feel like part of your team. On the other hand, if your organization would struggle to compete within these areas, then you’re at a disadvantage. Outsourcing all or part of your IT staff to IT providers that excel in these areas makes more sense.

3. When you don’t have the capacity to Always Be Hiring (and training and retaining)

IT talent not only wants to be well-compensated both financially and with perks, welcomed by your culture, and feel passionate about their work, they want to keep moving. Whether that movement means learning and growing within your company or moving on to better opportunities as they come along, it’s important to them. Turnover for technology companies and tech workers tops the turnover list. Which means you shouldn’t get too comfortable with your current team — hiring, training, and retaining is an ongoing process when you staff your IT department internally. Unfortunately, many organizations don’t measure up when it comes to training, despite good intentions. The organizations that train effectively are the ones that continually devote time and resources to it. Nothing stands still, especially when it comes to cybersecurity and cloud integration. Training must keep up with current technology.

Capgemini and LinkedIn conducted interviews about the digital talent gap and found more than half of IT talent report being dissatisfied with their training or are not given enough time to complete training. Close to half describe their training as “useless and boring.” Sometimes the reason for dissatisfaction is the people responsible for the training and training strategy are not IT experts themselves, so they don’t make the optimal choices. As a result, most IT personnel end up investing their own time and money into their professional advancement. You can guess what’s likely to happen next.

Stagnation is as much of a turn-off as subpar training. More than half of the Capgemini and LinkedIn respondents said they’d leave their current job if they felt they were stagnating. Building opportunities for IT advancement into your program is critical for retention. Small and medium-size organizations often can’t provide that. Outsourcing IT staff can free them from the continual cycle of talent training and churn.

4. When you need IT staff with a lot of know-how but you don’t need them all of the time

The talent shortage can be even tougher to overcome when you need highly skilled personnel but don’t have enough work to keep them busy all the time. They’ll likely get bored and look for employment elsewhere (and they’ll find it). Even if they’re passionate about the work they do for you, unless your organization can provide them with enough interesting side work during the downtimes, you’ll struggle to hire top full-time talent.

Instead, your organization might consider looking for candidates who are excited to work part-time. Or you can look for IT talent that embraces contract, shared, or temporary work. While this may be a workable solution for organizations that need an elastic IT workforce, it will alter the available talent pool and create timing challenges. Most qualified candidates are looking for challenging full-time work and want to build solid career trajectories. You’ll also need an internal team or a staffing partner who’s ready to jump into action to find the talent you need during your ramp-up times. The tech talent shortage makes this increasingly difficult. It can also put your organization at a disadvantage when it comes to IT innovation.

Many organizations choose to outsource because it’s the best solution for having both top talent and elasticity. An experienced managed IT service provider has IT professionals standing by and can jump in for IT projects and ramp-up periods and go away when you don’t. In fact, highly skilled IT talent often choose to work for managed IT providers instead of in-house IT departments precisely for this reason. It’s more interesting and challenging to work for many different client accounts.

5. When you need to leverage the cloud to stay efficient and competitive

Moving at least some IT operations to the cloud is the best business decision for companies of all sizes, including, more recently, enterprises. Forrester reports more than 60% of North American enterprises now rely on public cloud platforms — that’s a five-fold increase from 2013. Private clouds, including on-premises clouds, are becoming more popular, too. What was once a way to save money by moving storage and servers to the cloud has become the preferred way to run and grow organizations. This continued march toward modernization is compounding the tech talent gap. The market needs skilled, experienced, highly trained people to integrate and manage all these cloud services.

Cybersecurity Partner Interview Guide

RSM and partnered on a survey that found more than a third of respondents said their organizations lack IT staff competency, knowledge, and strategic capabilities. More than two-thirds said their operations are severely impacted by these shortages. What’s more, moving to the cloud presents data security and privacy risks (along with the loss of control and performance risk) and increases the potential for disruptions to their businesses.

Outsourcing to leverage the cloud can both enable digital transformation and fill the talent gap simultaneously. Managed IT service providers, especially those with decades of cloud experience, offer organizations a way out that’s much more efficient than trying to compete for top talent and do all the work in-house. Staying current with the latest cloud advancements is no longer an issue either. The Capgemini/LinkedIn report found half of the respondents agree that outsourcing could give them access to the capabilities they need and free up their internal teams for other work. More than two-thirds said an outsourced company would do a better job managing their IT than an internal team.

The talent gap is also a business risk

For the first time, Gartner concluded in its 2018 third-quarter Emerging Risks Report that the shrinking talent pool is now a top business risk. In the CIO survey, 65% of technology leaders said not being able to find the tech talent is impacting growth. And 54% of organizations in the Capgemini/LinkedIn study feel they are at a digital disadvantage because they can’t find the talent they need.

And Robert Half’s 2018 Salary Guide found it takes an average of 4.5 weeks to find and onboard tech staff, with healthcare, financial, and manufacturing professionals citing the slow process having the greatest impact on business. Clearly, the talent gap is not just an HR issue.

Getting IT staffing under control and access to expert advice

When your organization is dealing with one or more of the issues above, now could be the ideal time to use outsourced IT staff. It’s not an instant panacea (expect a transition period) but the tech talent shortage is only going to get worse each year. The sooner your IT staffing issues are under control, the sooner you can move forward to meeting your business goals. And, depending on the provider you choose, you can gain a partner who will give you IT insights and advice you can’t get internally. These advantages are particularly useful to CFOs who are responsible for IT strategy but are not IT experts themselves.

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