No crisis lasts forever, and company executives in the Nearshore information technology outsourcing (ITO) industry already sense an easing in the tech talent shortage that has been strangling the IT ecosystem at a global level for months.
Though the tech industry is no stranger to talent shortages, the problem grew out of hand after the Covid-19 pandemic. Worldwide lockdowns forced companies to sharply accelerate the adoption of new technologies and the digitalization of all sorts of processes, pushing demand for tech expertise while supply was unable to keep pace.
Companies face a very complicated landscape now. The low supply of tech talent shot salaries to the stratosphere in the midst of high inflation numbers and the threat of recession hanging over the US economy. Recruiters have been forced to look all over the world to fill job positions, but there’s no abundance of prospects. Software engineers are not coming out of universities fast enough. To make matters worse, war in Eastern Europe cut three of the world’s main sources of tech talent: Ukraine, Russia and Belarus.
“This is not going to be like this all the time. We are going to settle down; we’re going to figure out where the workers want to be”–Anurag Kumar
In spite of the grim landscape, ITO executives have high hopes that the crisis will begin to yield as soon as the end of 2022. That’s the outlook at least for Latin America, one of the regions most favored by companies hunting for capable tech talent at a lower price.
“I do see some of it stabilizing now. It was very difficult to find talent for three to four months,” said Ashish Patel, Founder and CEO at custom Nearshore software developer Simpat Tech during his participation in the Nexus 2022 panel Opportunities and Alternatives: Confronting Latin America’s Talent Crisis. “We’re starting to see that it is becoming easier. Nowhere near where it was a few years ago, but I see it stabilizing probably by the end of the year, or it being more stable than it is.”
Patel’s fellow panelists agreed with his comment. “The only thing I can share with you is, having seen this movie or similar movies before, we will have a stable situation very soon,” said Anurag Kumar, Managing Director and President of Nearshore Region at Improving. “This is not going to be like this all the time. We are going to settle down; we’re going to figure out where the workers want to be.”
Though with difficulties, team-builders have been able to make due. ITjuana’s CEO, Maritza Díaz, commented during the panel that her company was able to recruit around 700 people over the past three years in spite of economic difficulties and the low supply of talent. Nonetheless, she added, ITjuana has had to build alliances with universities in Baja California (Mexico) and expand their hunt for talent to other engineering careers aside from software in order to find enough prospects.
Although they’re fishing for talent in the same pool, Nearshore ITO executives know that head-on competition without cooperation could spell disaster for the business in the long run under current conditions.
“I think it’s a responsibility for everybody to try to solve the problem, because if you just try to compete with each other, then everybody loses,” said Issam Gharios, VP of Software at Highres Biosolutions.
The Dilemma of Remote Work
The pandemic affected almost everything, even the meaning of the word “office”. Millions of people were forced out of office buildings during the lockdowns, launching a merging of home-space and work-space at a massive scale. With the lockdowns pretty much over, the question remains: will employees be forced back into the office?
The answer remains to be seen. Very few companies are calling all of their staff back into the office. In the US, about a third of employees said they would take a pay cut if that meant they could keep working from home, according to a recent survey.
Governments are taking notice. Mexico and Colombia have already made changes to federal labor law in order to regulate remote work, while also permitting the return to offices, opening the path for a hybrid model.
Some bosses are not as keen on remote work, though. Anurag Kumar, for example, said he has “mixed feelings” on the issue. “How do we deal with this remote work thing? I think there’s a sense of entitlement [from employees] peeping in with this experience, and I think that entitlement is probably going to wear off”, he commented. “The jury is still out. I think the truth is there will be a balance somewhere in between.”
Maritza Díaz also has her doubts on whether remote work is here to stay, especially in Latin America, where home-offices are not always as snug and well-adapted as in the US. In the region, she said, some workers might find it more convenient to commute to the office, at least every once in a while, if it means having a dedicated workspace.
Opportunity Amidst the Tech Talent Crisis
While the storm unleashed by Covid-19 wrecked companies, industries and even whole economies, Latin America and the Caribbean are in a position to make the best of it. The landscape is changing in a way that could favor the region.
“When there is disruption is when the biggest opportunities arise. And I see that this opportunity for us in Latin America is bigger than ever”–Maritza Díaz
High inflation and talent shortages are pushing companies to hunt for employees in the region, and some are willing to make hefty investments in hopes of high returns. While the pandemic hit Latin American and Caribbean economies with particular ferocity, the BPO/IT services industry opens opportunities for job creation, economic growth and development.
“When there is disruption is when the biggest opportunities arise. And I see that this opportunity for us in Latin America is bigger than ever,” said Maritza Díaz. “This is the time in history for us to no longer be third world countries and build these new economies that are going to be as significant as that of any other country in the world.”
The landscape is changing fast, though, and the region has to change with it. While Latin America and the Caribbean have grown into hotspots for Nearshore investment, their public and private sectors will have to think on their feet and move fast in order to upgrade the portfolio of services offered to foreign markets.
“How do we de-stigmatize Nearshore as just software developers and move upstream to be analysts and data scientists?,” asked Ashish Patel. “Like that, you’re providing more value than just writing code.”