How Companies Can Address The Tech Talent Shortage In 2022 With IT Outsourcing

Posted by KMS Solutions on May 11, 2022 4:48:24 PM


The growing demand for digital applications combined with the severe IT skills shortage has given rise to IT outsourcing. This article explores the current state of the tech talent gap and covers various aspects of outsourced IT services with the hope of helping businesses make the most of outsourcing. 

Talent shortage moves to a chronic challenge 

The need for technology and digital transformation has reached fever pitch because of the COVID-19 pandemic. Organizations have rushed to quickly apply digital solutions to allow for efficient remote working conditions and adapt to changing customer behavior, worsening the IT talent gap. As the demand for employees escalates, so does the cost of labor, owing in part to the comprehensive training necessary to onboard new software developers and engineers. Subsequently, the digital skills gap is widening, and the demand for tech talent has become more urgent than ever. According to Datapeople’s 2022 hiring report, the available labor pool in the tech industry has reduced considerably. The market reported a 25% decrease in applicants while the number of posted jobs nearly doubled over the same period, affecting 69% of enterprises. 

Alarmingly the talent shortage is found as the main obstacle to emerging tech adoption as per a Gartner, Inc. survey. Regardless of talent shortages, infrastructure and operations (I&O) and other IT leaders have boosted the adoption of advanced technologies to create new competitive advantages since businesses begin to recover from the pandemic. Across all technology domains, 58% of participants reported either an increase or a plan to enhance emerging technology investment in 2021, compared with 29% in 2020. Moreover, I&O functions have recorded a decrease in deployment timelines, with all technologies in deployment anticipated to attain adoption within the next 6 to 18 months.

Technology Domains Facing IT Skills Gap

Developers in IT Outsourcing

1. Data Analytics

AI and IoT technologies are creating more and more data, yet, a large amount of data doesn’t mean much if companies can’t deploy it effectively, explaining why the tech sector has progressively sought staff skilled in analysis. Since 2014, tech recruiters have specifically targeted IT professionals with advanced analytics skills such as machine learning, data science, natural language processing, image processing, data engineering, and visualization.

See more: Data analytics service at KMS Solutions

2. Software/App Development

Recruiting developers with the right skills is predicted to be the biggest business challenge in 2020. According to the Top Software Development Challenges for 2022 Survey Report by, Blazor (64%) is the platform that most managers are looking to employ skilled developers for, followed by .NET (48%), Angular (40%) and React (37%). To tackle this issue, some businesses are planning to use low-code/no-code (app builder) tools or design-to-code platforms for citizen developers. 

See more: Digital App & Platform Development Services at KMS Solutions

3. Software Testing

The growing need for software development has given rise to an increased demand for software testing. The Skills Gap in the Software Testing Industry article by David Blanks showed that most software testers don’t have the required technical skills including: 

  • Programming skills
  • Database skills
  • Project experience skills
  • Automation skills
  • Structured training

See more: Digital Testing at KMS Solutions

Bridging The Gap With IT Outsourcing

To overcome talent shortfalls, different strategies can be applied based on the enterprise’s demands and capacity. Some popular strategies include:

  • Additional training and development
  • Offer flexible working options
  • Enhance perks and benefits
  • Generate an employee referral program

Yet, this might not be a financially sustainable solution for all firms. Furthermore, unlike technology companies that already have heaps of tech talent and can only focus on retention strategies, non-traditional tech firms like banks would need to invest strongly in both talent attraction and retention tactics to appear more appealing to developers. Consequently, outsourced IT operations are now one of the most preferred methods to relieve the stress of the tech talent gap, considering the numerous benefits that it brings to businesses.

Benefits of IT Outsourcing 

The main advantages of IT outsourcing services are:

1. Access high-quality labor

While an internal tech team is restricted by the company’s resources and the training it provides, with outsourced IT support, employers can approach high-quality manpower and access to enterprise-grade support tools

Outsourced IT services also empower organizations to quickly increase or shrink their human resources in different development periods without being worried about personnel organization, hence aiding them to improve labor productivity.

2. Cost-effectiveness

Outsourcing IT operations allows businesses to reduce their overall labor expenditures. Firms can pay for the service as they go rather than making large upfront investments. Additionally, it helps firms gain expert support without acquiring the latest IT infrastructure or hiring full-time professionals to improve the efficiency of the business.

3. Flexibility

Outsourced digital team assists in tackling the short and long-term demands of organizations. Whether businesses need to scale their tech teams for complex project developments that cover several years or only require a certain skill for a short period of time, outsourced service providers can efficiently satisfy the requirements.

4. Knowledge of the industry and innovation

If the business’ core activities have little to no relevance to information technology, there is a decent chance that the company is missing out on the latest trends in the industry. Thus, it is a good idea to opt for IT outsourcing as they can get an innovative look at what the organization needs in terms of information technology.

Best Practices for IT Outsourcing

IT outsourcing-1

To ensure a successful IT outsourcing partnership, companies are advised to follow these practices.

  • Make a plan

Clear, practical objectives with well-defined timelines are suggested. This not only gives firms more control over the project but also puts them in a better position to choose the appropriate staff augmentation model for their specific industry. Clearly outlined goals will also enable vendors to generate thorough proposals and estimate the size and cost of the project. 

Another recommendation is to document each stage of your outsourcing venture involving deliverables, alterations, updates, and reassessment. It can include email, meeting notes, bug tracker submission, or even code comments. This helps companies keep track of progress effectively. 

  • Go Agile

Agile development is the leading approach to software development. 71% of enterprises employ agile and agile projects are 28% more successful than traditional projects. 

Agile development is implemented in multiple short iterations. Each iteration is done in a few weeks and entails building, testing, and launching new versions. In contrast, traditional development can take several months to accomplish a new release.

Agile also entitles businesses to perform new changes with greater flexibility and speed. Corporations as large as Microsoft have achieved success with agile in everything from small-scale initiatives to enterprise-level projects. Therefore, it is highly recommended that organizations adopt Scaled Agile mindset and frameworks for successful project implementation. 

  • Communication clearly

A lack of communication is a recipe for a collaboration disaster. Roadblocks, development issues, and requirement modification will have detrimental influences on a project if not communicated swiftly and clearly. Thus, frequent communication is essential to keep both parties engaged and aware of updates to the project. With outsourcing, language, culture, and time differences can be barriers to effective communication. Nevertheless, considering the tools and technologies available today, there’s no excuse for teams to not share information. 

Vendor Selection Criteria

Vendor Selection Checklist - KMS Solutions

To choose the right IT outsourcing providers for your business, here are a few critical qualities you need to carefully consider while evaluating vendors

  • Experience: You want to look for outsourced IT service providers who do not only have years of experience but also have the expertise in your industry
  • Experts: IT offshore outsourcing is advised when technology experts in your area are limited. Software vendors should also be able to provide adequate infrastructure to ensure a seamless and secure implementation.  
  • Portfolio & References: Outsourcing vendors’ portfolios and references should also be investigated thoroughly
  • Location & Communication: When looking for offshore outsourcing suppliers, it is suggested that you search for those within 3-6 hours flying distance to help both sides build relationships. In case an outsourcing vendor’s location isn’t that vital to you, communication is still a must. 
  • Pricing: Even though pricing is an important factor to consider when selecting the IT outsourcing vendor, you shouldn’t base your choice solely on it. This might result in poor quality and extensive postponement in receiving the end result. 

To better assess the outsourcing partners, corporations can consider creating a checklist for selecting IT sourcing vendors.

About KMS Solutions

Working closely with leading software companies across the globe, KMS Solutions prides itself on delivering superior IT outsourcing services across different technology domains, from data analytics, and software testing to digital apps and platforms. With 12+ years of experience in the industry, we have helped multiple companies develop innovative digital solutions with agile methodologies.

Learn more about our Digital Team services


Topics: Digital Applications, Software Development