If IT talent recruiters think that 2022 is turning out to be a difficult year for staffing, they might want to take a deep breath before 2023 comes crashing down on them.
Team builders are well aware of the worldwide shortage of software developers and engineers. Even though talent was difficult to come by before the Covid-19 pandemic, the job market became even tighter thanks to the technological adoption forced by the outbreak. Companies tried to adapt to digitalization at a breakneck speed, throwing recruiters into a mad scramble for talent in a landscape where supply remained below the skyrocketing demand.
Players within the tech adoption market see the process accelerating in 2023, as companies see digitalization as a bigger priority and allocate resources accordingly.
“I think next year will be critical. In 2022, companies are still working on their tech budgets. Next year, they’ll try to execute it,” said Gustavo Parés, Founder and CEO at NDS Cognitive Labs, a Mexican firm that specializes in tech adoption and transformation processes. “It’s visible already this year; next year, it’ll be evident.”
According to Parés, many companies in Latin America are still in the stage of reimagining their processes through a technological lens. Though they have dedicated resources to the transformation, they haven’t gone all out with it. He expects that most of them will begin to take the process more seriously next year, causing even more tension between high demand for tech experts and the low supply available.
“We’ll witness an inflation of local costs, plus execution time frames that will be prolonged by 40% or 50% versus what’s expected in ideal conditions,” he said.
The concern was echoed by Marco Antonio Mejía, a Mexican cloud architect who works with several clients all over Latin America in the adoption of cloud-based solutions.
“It’s going fast. So fast, in fact, that we need more hands,” he said in an interview. “We don’t have enough engineers in Mexico that can handle the cloud. There’s not enough people who can work the cloud in Latin America. We’re few.”
Mejía noted that cloud adoption is growing at a fast rate in the region, with countries in the South Cone working at an even more rapid pace than the rest. “I think it will accelerate even further. There’s so much room for growth; the pipeline is huge,” he added.
It Was All Covid
Latin America had an edge over other regions when it came to the availability and affordability of talent. The quality of software developers and engineers in the region is high enough that IT firms are willing to hire them, with the added advantage of lower wages that are still considerably high for the vast majority of Latin American workers.
Nevertheless, the outbreak made things more difficult for IT recruiters due to the sudden push in demand coming from players within and outside of the region.
“When the pandemic started, we faced some challenges because many other companies started working remotely and it was more difficult for us to continue growing the team, but now we have developed other strategies,” said Giuliana Corbo, CEO at staff augmentation firm Nearsure. “We have improved our services, our value proposition, and we have seen better results when it comes to being competitive.”
“A year after the outbreak, it [wage inflation] started to be more aggressive. We have experienced a growth in the salaries in our team, and also of prospects. It might be about 20% or 30%,” she added.
Though wages in the region remain low enough to be attractive for firms looking to cut costs in the midst of wage inflation in the US and other developed countries, they are beginning to standardize at a global level, according to Corbo.
“Companies are not willing [to pay extra], but they’ll have to”– Gustavo Parés.
The US Bureau of Labor Statistics expects yearly job openings for tech to reach almos 190,000 by 2030, which would represent a 22% growth between 2020 and 2030. The national average growth rate for IT professionals is 8%.
The Gears Won’t Stop Turning
Next year is shaping out to be extra difficult for IT team builders. Between the accelerating demand for talent, wage inflation and a more competitive landscape, recruiters will have to look even harder for workers.
Things are already shaping up to be tough for recruiters looking for engineers specialized in certain technologies, like the cloud. The job market for cloud architects is becoming more and more dominated by Amazon, Microsoft, Google and Oracle. In Latin America, salaries have climbed rapidly, reaching a point where not even companies such as HP are able to compete with the giants in the sector, assured Mejía.
The gears won’t stop turning, though, and IT firms will have to do their best to keep up with the fast pace of the machinery.
“Companies are not willing [to pay extra], but they’ll have to,” said Parés.