Lately, Nearshore custom software partners are having a tough time keeping their software engineers away from “the bench”.
A host of macroeconomic pressures have resulted in a downturn in business for several providers of IT services, both Onshore and Nearshore. While the market remains healthy, executives in these sorts of firms have noticed a reluctance among their US customers to green-light bigger or longer projects, with some getting delayed for 2024 or even moving to other geos, with India being a prominent destination.
A RevOps survey showed that 80% of software providers said that they’ve faced challenges in achieving their 2023 goals, “pointing to a downturn in the market”. To boot, the waves of massive layoffs remain as one of this year’s top stories in tech. As of July 2023, it is estimated that the bigger players in tech have laid off more than 225,000 employees.
For the rank-and-file software engineers who are still employed, the state of the market has resulted in a lot more “bench time”, which can lead to demotivation or, in some cases, not getting paid due to a lack of projects.
NSAM spoke to several IT executives who have encountered the problem of benched engineers. What follows is a list of solutions or recommendations which could help business leaders keep the negative effects of bench time at bay, or even make the best out of it.
Think about Better Utilization
The best remedy to inactivity is, fittingly enough, activity. Project managers and IT executives know that bench time can kill a team’s motivation. That’s why they find other tasks –usually smaller ones– that their engineers can work on in order to keep them away from the limbo between projects.
At SoftServe, for example, engineers are assigned to tasks in the company’s R&D departments, where they can help with demos and products that are in development.
“Those [departments] have specific, tech-oriented lines of work in which our collaborators, during those pauses, can contribute with demos or product segments with client-specific information,” explained Vladimir Mendoza, VP and Mexico Country Manager at SoftServe.
“We tend to funnel benched developers into socially-oriented projects […] Our aim is to use bench time in a way that directly benefits the community”—José Sáenz, Senior Partner and Chief Business Development Officer at Proactiviti
Another way of dealing with bench time during a dry spell of revenue-generating projects is assigning staff to projects which are engaging while not necessarily profitable. That’s the model used by Proactiviti..
“We tend to funnel benched developers into socially-oriented projects; while paying our staff, of course. Our aim is to use bench time in a way that directly benefits the community,” José Sáenz, Senior Partner and Chief Business Development Officer at Proactiviti, shared with NSAM during an interview.
Double Down on Learning
Upskilling is one of the main drivers of growth in the IT industry. Software engineers (as well as executives and non-tech staff) are always learning about new technologies and other developments relevant to the industry. If programmers can’t be engaged in other tasks, their downtime can be used to accelerate their learning process.
The current demand for cloud, ML, generative-AI and other technologies is a perfect incentive to upskill at a wide scale in any company. Besides, having a higher number of talents trained in these technologies could result in actual projects.
“If the talent is current, the clients fight for you to keep them,” stated Pradeep Menon, Executive VP and Global Head of Delivery at Orion Innovation. “Just last month, we launched 50 AI training programs, which include CEOs, managers, and leaders. We also created a new designation within the company called ‘prompt engineer’”.
“In a ‘business as usual’ context, everyone is spending the bare minimum. But they [clients] are repurposing that money for betterment of new modern technology,” he added.
Engagement is Crucial
Downtime is the perfect moment for engineers to reflect on the work they’ve done and the processes involved in that work. Some business leaders have seized on that fact and thrust their benched staff into a cycle of process assessment and evaluation.
“When demand goes down even a bit, that’s the proper time to adjust processes and for identifying potential improvements,” said Guillermo Carreras, Head of Agile and Digital Transformation at BairesDev.
“When an engineer has no assignments, we look at the documentation he/she has been managing at the moment, which are the lessons learned and what sorts of improvements can be made,” he added. “Those observations are then submitted for review among a group of peers and, eventually, implemented. That gives our engineers a feeling of tranquility and satisfaction”.
Keep ‘Em (Economically) Satisfied
Two of the most unfortunate consequences of a downturn in the market are layoffs and salary cuts. Not every company can keep the entirety of their staff around when projects come less often and revenue goes down.
Some Nearshore IT agencies, however, have been fighting hard to keep their engineers around with their wages intact.
“When demand goes down even a bit, that’s the proper time to adjust processes and for identifying potential improvements”—Guillermo Carreras, Head of Agile and Digital Transformation at BairesDev.
“We keep them [developers] within the company during their time on the bench, whether that lasts a week, a month or a year,” commented Proactiviti’s José Sáenz. “We keep paying their standard salaries, with benefits, but we seek to use their time in other ways”.
Talent shortages are still a problem in IT despite the waves of layoffs. A recent survey by ManpowerGroup shows that 78% of employers in the tech industry have encountered “hiring challenges” this year. Several of these firms use current staff to deal with the shortages: 71% said they use upskilling and reskilling to fill vacant jobs, and 37% stated they are looking to hire contractors or temporary workers.
In other words, talent remains one of the most important assets in IT. Companies should do as much as possible to keep theirs around.
Evaluate Freedom to Roam
The validity of moonlighting is a controversial topic in IT circles. Major firms like Infosys, HCL Tech and TCS lashed out at their two-timing engineers last year. It was reported that Wipro fired 300 engineers for working with competitors, and its Chairman Rishad Premji characterized the practice as “cheating”.
Employees seem to disagree, though. A Randstad survey shows that 9 in 10 workers find employers “much more attractive” when they allow them to work additional jobs, either under a “two-timing” scheme or as freelancers. Women are comparatively more willing to take a second job than men (92% vs 89%), an indication of pay disparity in the industry, according to Randstad.
If your company has nothing for benched engineers to do, and if you can’t pay them as much as if they were working on a project, perhaps allowing them to do some outside work or dabble with the gig economy might give them some peace of mind and an reason to stay in your organization.