We broke the global software talent industry. According to various sources, the global IT outsourcing market value reached over 400 billion dollars in 2020. Highly skilled software engineers from all around the world are the key actors in this market. Yet, they can only get 60 billion dollars/year (approximately 15% of the talent capital).
Global pandemic changed the way we work and put all of us into a forced remote work situation, this may sound insignificant, but its butterfly effect is highly disruptive. Here’s how:
Problem #1 — Outsourcing and the middle-men
Software is eating the world. Amazon Web Services, Azure, Google Cloud Platform, and others only accelerated this transformation by reducing software delivery costs and increasing efficiency.
Every single hiring manager worldwide realized they need to learn how to get more effective in a remote work environment. As a manager who managed teams remotely for most of my career, I expected this remote work adoption level to happen around 2030 before the pandemic. Unfortunately, (maybe, fortunately) my conservative prediction is now the reality.
This global disruption brought a handful of meaningful questions into the minds of software engineering hiring managers:
- What is the real value I’m getting from an outsourcing company? Is this the true worth of my money?
- Do these outsourcing companies have a monopoly on talent from emerging markets?
- Since I now see that I can manage my whole team remotely, how can I get more effective with my software engineering budget?
- What percentage of my outsourcing budget is going to the software engineering talent, I’m supposed to work with together?
- What if I go ahead and contract these highly skilled individuals myself? How do I assure quality? Is my engineering playbook ready to accept remote software engineering talent as individuals or managers?
These valid questions are the message birds of global disruption. They will lead to actions and help us transform the global software talent industry slowly but surely.
Although money is not the #1 motivator for most great software engineers, taking their fair share from the outsourcers (which should be 100% of the talent capital) will motivate them to take more ownership and produce better results.
Problem #2 — Non-tech recruiters
I spent my last seven years in global software companies. As a result, I happened to have many technology decision-makers, software engineering managers, and hiring managers in my close circle. Regardless of their location, the problems they face are almost identical.
Today, almost all of these managers have to spend over 20% of their work time trying to find, test, and hire great software engineering talent to join their teams and help them build their products.
These are the main challenges of a relationship between a highly experienced technical manager and a non-tech recruiter:
- Technology decision-makers and software engineering managers are more concerned with their lost focus and time in nonsense interviews than their recruiters’ headcount cost. So bosses of software engineering are willing to pay but not getting what they want continuously.
- According to a grand experiment, a software engineer receives 8–12 new messages from recruiters daily. They are reducing their chances of success dramatically.
- In a pool of 2500 recruiter messages sent to software engineers, all recruiters are using almost the same template, overly using “opportunity” (966 times) and “urgent” (515 times). There are explicit knowledge, expertise, and innovation problems in this industry.
- Recruiters don’t know how to assess software engineer quality, which is not only the technical qualities. They are also failing to understand the engineering culture of your company.
Imagine this as a gold rush where outsourcers pollute the market for that 85% (approximately 340 billion dollars in 2020) cut from the global IT outsourcing market.
Spamming great talent is not sustainable as recruiters created a “recruiter blindness” on software engineers and their messages convert less and less great talent every day.
Objective hands-on software engineering testing at scale
There’s no chance of success without software and automation today. Regardless of the industry, we need software to get more efficient and grow our businesses. None of these massive sectors is an exception to banking, Pharmaceuticals, Insurance, Telecom, Fintech, Retail, Automotive, Hospitality, or others.
Once you go remote, you are opening your company doors to 8 billion people. It would be best to have an objective testing strategy for eliminating noise and focusing on the signal for your business. A multi-layer testing structure is proven to be successful in my previous experiences:
- Cognitive skills testing
- Mapping personality treats of the candidate (personality index)
- Objective hands-on coding challenge
- Technical interviews
It would help if you had centralized, objective hands-on software engineering testing, not only for testing the software engineers in your zip code or your country. In the end, due to the limits of STEM education, low numbers in Computer Sciences graduations, the overall engineering talent production rate is known and extremely limited in your local. No thanks to the competition, your company’s share of talent is minimal; this is why you need to start thinking global.
I hired over 4000 tested remote software engineers with this strategy and decided to build a platform for offering it to technical employers worldwide to focus on signal vs. noise and keep building unique products.
Hire direct, pay direct
Remote hiring is easier now than ever before; thanks to excellent onboarding and payroll services like RemoteTeam, Deel, and Remote, all you have to do is decide how you’d like to onboard your talent once you find them. You can offer a full-time contract of 40 hours/week or provide full-time employment; this is all a single click today, thanks to massive investment in this area.
Here are some key benefits of this approach:
- Arbitrage opportunity: Your local salary averages might be 2–3x higher than many other emerging markets. While it’s challenging to hire a great junior developer for $120K/year in San Francisco, that budget gets you a Chief Software Architect in Brazil. As a bonus, your next tested remote hire could have over ten years of hands-on engineering experience, plus specific domain experience (like Fintech, Banking, Telco, Insurance, etc.), plus fluent English speaking abilities and remote work experience in Brazil.
- Remote work experience: People with no real remote work experience tend to believe it is easy. Misleading blog posts and videos showing remote work as sipping your mojito next to a pool with your laptop are not helping either. A Senior Software Engineer from Argentina with five years of remote work experience, knowing how she should manage her agenda autonomously and add value is a lot more productive than your regular office employee. At Exceptionly, we’re whitelisting candidates with a proven track record of working remotely. Not sure? I’m happy to help you experiment for free.
- Use 100% of your engineering budget: Once you cut off the middlemen and pay directly, you can get up to 10x more productivity and loyalty from your remote employees. Your understanding of remote talent quality and loyalty is not valid if you did it through an outsourcing company before. Simply because while you were paying $100/h for a Senior Java Software Engineer, the guy who did the actual job only gets $15/h for that work. Usually, he can’t connect, is less likely to take ownership, make more extended plans with you, and jump off the moment he found a better opportunity.
- Around-the-clock product development opportunities: As you learn and transform your engineering structure to adopt async communication over time, you’ll realize a magic effect occurs. As you work with highly-skilled, tested individuals from different time zones, team members will have a clear plan every day as more and more work gets produced by other team members and creates action items for them as the wake-up.
Engineer-to-engineer hiring strategy
Test yourself or ask your team members if you are delegating this work. If you are not enjoying every single software engineering candidate interview you are having; you are doing something wrong. At Exceptionly, we have a total commitment to never becoming a recruiters company. Here are the key benefits of this strategy:
- Save time, focus, and money: You don’t let a non-tech person manage your software engineering budget, so you shouldn’t let a non-tech person bring engineering talent into your company. Software Engineers are 5x more likely to understand each other in full. A typical outsourcing company provides his trust for pocketing up to 85% of your engineering budget. They come with a rockstar delivery manager collecting your requirements and then providing poor service at an individual level.
- Quality before volume: While you’re working with a Software Architect with over 10+ years of experience as your talent acquisition partner, you can get the quality you need in a much shorter timeframe. It may sound bold, but I can challenge you to hire ten non-tech recruiters and compete with the software engineering talent quality Exceptionly can provide a single Software Engineering Manager we’ll dedicate to your hiring needs. There is no magic, just a combination of essential data, great process, and expertise. I’m happy to risk my dollars. Let’s test.
I tried to share my domain expertise in this post to revolutionize the software talent industry by showing you the inside of a sausage factory. Here are our frequently asked questions and answers. I’m happy to chat in a quick call to discuss your disagreements and suggestions.