Success in business requires training and discipline and hard work. But if you’re not frightened by these things, the opportunities are just as great today as they ever were.” – David Rockefeller, world-renowned banker.
A common challenge many mid-sized US businesses face is the inability to close the skills gaps among their tech teams. Can they benefit by looking into how outsourcing can provide them the specialized knowledge and abilities their IT teams need to spur innovation and stay ahead of the curve in the quickly changing world of technology today? Time to find out!
In today’s fast-paced technological landscape, the demand for specialized skills within tech teams is continually evolving. As new technologies emerge and business models shift, maintaining a workforce with the necessary expertise can be challenging. Skills gaps can hinder productivity, innovation, and ultimately, a business’s competitive edge.
Outsourcing offers a strategic method to close these gaps, bringing in the required expertise without the long-term commitment and costs associated with hiring full-time staff. Of the nearly 2.4 million jobs outsourced to other countries, nearly a quarter of a million were IT-related, says zymr.com.
This article will examine how outsourcing can bridge skills gaps within tech teams. It will also highlight the benefits of outsourcing and offer best practices for successful implementation. By recognizing skill deficiencies, businesses can efficiently address these gaps through outsourcing, enhancing their tech capabilities.
Understanding the Skills Gap
While the demand for high-tech applications and products is at an all-time high and still accelerating, the US is facing a serious shortage of qualified, trained workers in a number of skilled occupations, including programming, software development, and computer engineering.
According to a Gartner report, estimates put the number of new computer-related jobs in the US at nearly 1.5 million, while the US educational system will most likely only be able to supply less than half a million qualified candidates to fill those jobs. Also, according to Deloitte, organizations are struggling to find the technical talent they need to drive innovation-focused initiatives. Moreover, an IT Skills Gap Report for 2023 by Forbes highlighted that 93% of UK businesses reported a gap in IT skills in the job market. All these reports hint towards a common solution: outsourcing.
Why does this situation arise in the first place? A skills gap occurs when the capabilities of the current workforce do not align with the skills needed to achieve business objectives. This gap can be due to various factors, including rapid technological advancements, shifts in market demands, and the complexity of modern software development.
To effectively address a skills gap, it is crucial to conduct a thorough skills gap analysis. This process involves identifying the skills required for specific roles and comparing them to the existing skill sets within the team. There are several methods for conducting a skills gap analysis, including employee surveys, performance reviews, and the use of skills matrix tools like the ILU (Identify, Learn, Utilize) matrix.
Once these gaps are identified, outsourcing can play a pivotal role in bridging them by providing access to specialized expertise and resources that may not be available internally. Let’s explore its role further in the next section.
The Role of Outsourcing in Closing Skills Gaps
Outsourcing is the practice of hiring external firms or specialists to perform tasks that would typically be handled internally. For tech teams, outsourcing can provide access to a global pool of talent, offering a wide range of skills and expertise that may not be available locally. It has some benefits to offer, and some of them are mentioned below:
- Access to Specialized Skills: As highlighted by orientsoftware.com, outsourcing firms often have experts in various fields, like AI and machine learning. This diversity enables businesses to tap into specialized skills that are otherwise difficult to find. This specialized expertise then enhances the ability to scale their teams up or down based on project requirements, as outlined in the next point.
- Scalability: Outsourcing allows businesses to scale their teams up or down based on project requirements. This flexibility is particularly beneficial for businesses experiencing fluctuating workloads or those embarking on large-scale projects that require temporary expertise.
- Cost-Effectiveness: Hiring full-time employees comes with significant costs, including salaries, benefits, and training, states callexperts.com. Outsourcing can reduce these expenses by offering skilled professionals on a project or contract basis, making it a cost-effective solution for addressing skills gaps.
- Focus on Core Competencies: By outsourcing non-core activities, businesses can free up internal resources to focus on their primary business objectives. This strategic allocation of resources can enhance overall productivity and efficiency.
Let’s discuss some examples of how outsourcing can close skill gaps, in order to understand better. Curiositystream, a global video streaming service known for its extensive collection of documentaries and factual entertainment, faced a talent gap as it aimed to expand its offerings. To bridge this gap, the company turned to outsourcing for key engineering roles. In 2019, Curiositystream hired six outsourced programmers who enhanced the platform with new video features and mobile background playback. This development led to a significant boost in viewing hours and supported the company’s growth.
In another example, Oktopost, a social media management platform, partnered with Grid Dynamics in 2018 to access additional software engineering talent and extend the development team. The budding organization was able to advance on services that had previously presented challenges, enhance their product pipeline, expand their operations, and ultimately draw in additional clientele.
These examples are proof that outsourcing has proven to be a transformative strategy for businesses seeking to bridge skills gaps and drive growth. The success stories of Curiositystream and Oktopost underscore the tangible benefits of this approach. However, achieving these benefits requires careful planning and execution.
Implementing Outsourcing Successfully
To leverage outsourcing effectively, it is essential to follow best practices that ensure seamless integration and alignment with business goals.
- Define Clear Objectives: Defining clear objectives involves clearly outlining the skills gaps that need to be filled and the specific outcomes expected from the outsourcing engagement. This clarity assists in selecting the right outsourcing partner and setting realistic expectations, which is essential for the subsequent step of choosing the appropriate partner.
- Choose the Right Partner: Not all outsourcing firms are a right fit for all kinds of businesses. Amr Saafan, a software consultant, suggests in his LinkedIn article to seek out businesses with a solid track record in your sector, satisfied clientele, and an impressive portfolio of previous work. Request case studies or examples of similar projects they have completed, and evaluate their proficiency in software development, project management, and quality assurance, among other areas. Once you have selected a suitable partner, establishing effective communication becomes crucial for project success.
- Effective Communication: Establishing robust communication channels is crucial for the success of any outsourcing project. Regular updates, progress reports, and open lines of communication help in maintaining transparency and addressing any issues promptly. This communication is also vital for effectively integrating the outsourced team with the business’ internal teams.
The above-mentioned examples and advantages highlight the fact that outsourcing has become a strategic tool for addressing tech skills gaps. It provides access to specialized skills, scalability, and cost-effectiveness, helping businesses stay competitive and innovate. When implemented wisely, outsourcing supports both immediate needs and long-term growth.
As mentioned above, choosing the right partner is a crucial step, and Menal Partners understands the unique challenges faced by midsize businesses in the USA. Our services are designed to be accessible and hassle-free, providing tailored solutions that meet the specific needs of mid and small sized businesses. We offer a structured model that ensures seamless integration, effective communication, and continuous support, allowing you to focus on your core competencies while we handle the rest. Partner with us to unlock the full potential of your tech team and drive your business forward with confidence.
By embracing outsourcing, mid-size businesses can not only bridge existing skills gaps but also position themselves for future success in an ever-evolving technological landscape.