Companies are now facing an acute talent shortage which is leading to employers having to pay more to both bring in new talent and to retain existing talent. This will result in companies not meeting budget expectations in 2021 and has already resulted in more offshoring.
In a Forbes article, Peter Bendor-Samuel went into detail on this new issue and whether or not this will be a long-term or short-term issue.
He concludes that the answer is somewhat mixed.
There were three main factors that led to this shortage in the first place: Pent up demand for projects that got put on hold following the COVID-19 pandemic, demand connected with a V-shaped recovery in an economy that continues to expand, and demand for digital transformation that focuses on embedding and building technology platforms in businesses that equip organizations to compete more in the marketplace.
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Because of this, it was only natural that there was going to be a talent shortage, but it will most certainly die down at some point. Companies will work through the pent-up demand caused by the pandemic mostly likely by the end of the summer, and with the current presidential administration being more open to immigration than the previous one, companies will be able to import more talent with H1B visas being easier to obtain.
Also, the natural cycle of the economy means that at some point there will be a downturn which will decrease the demand for talent.
But Bendor-Samuel also points to secular trends towards digital transformation in the market that are driving the demand in the first place, and how they are not set to change. Companies are now fully aware of how significantly they can boost efficiency and effectiveness by introducing IT and engineering in their business.
Most companies became aware of this trend right before COVID-19 and probably would have implemented them sooner if not for the pandemic. This could lead to a five-year cycle of talent demand for companies to compete to reach these goals.
Companies should build offshore Global Business Service centers to properly adapt to this trend as it will help them compete for international talent more effectively by getting better access to the talent in the country they reside.
Companies also should analyze their purchases of third-party services providers and consider whether they should expand their use of the service.
But overall, companies should look to evolve their service portfolios so they will have a guaranteed supply of talent in order to properly grow and adapt to these new trends in the market.
