Crisis: Shortage of Software Developers

It is no news that a shortage of Software Developers has arisen during the last decade. Even more so, during the COVID pandemic the IT industry grew dramatically forcing big and small companies to add developers to their lines in order to satisfy their primarily needs as well as the new needs that arise when a great part of the world has turned around to home office, online stores, internet communication, news and social media. Each one of us has been more deeply connected to the internet in different forms.



We need to not only acknowledge the shortage of software developers. We need to discuss how it affects the marketplace and how to fix this problem.


According to Statista, in 2019 the number of software developers in the world grew to 23,9 million, while in 2018 there were only 23 million programmers and it’s predicted to reach 28,7 million software developers by 2024.


The U.S. Bureau of Labor Statistics states that in 2020 there were 1.4 million computer science-related jobs available to the public with only 400,000 computer science graduates to fill those roles.


But these increasing numbers seem not to be enough to cover for the IT market demand. Every day IT recruiters are struggling to get the attention of young programmers that might not have the experience or full knowledge required for the position to cover. With only 1 to 3 years out of college, programmers have noticed that the market is savage and that they have “options” to start their journey on this career. On the other hand recruiters are forced to take them as more experienced programmers could be quite expensive these days and not easy to get.


The main challenges for companies nowadays in terms of finding the right candidate are:


  • Lack of Experience

  • Lack of Technical Skills

  • Lack of Soft Skills

  • Lack of Formal Education

  • High Salary Demands


This is the reason why US companies are now looking for new or experienced talent abroad. But not as far as Asia as they did some years in the past. There are other regions looking to capitalize on the programmers shortage in the US for their own benefit.


According to DAAX.com there are other countries in Europe and Latin America growing their numbers. More than 100,000 software engineers graduate from Mexico’s universities yearly so, apparently, the Mexican software development market should comprise no less than 1 million developers.



Looking abroad seems to be a good option if you can find new and experienced talent with English proficiency and of course, the cherry pie, 40 to 75 percent cost reduction in terms of salary.


Outsourcing to Mexico seems like a good idea if we point out that there’s talent available, cost competitiveness, time zone alignment and a strong comprehension of the so-called “American culture”. Seems like a smooth step for current and future IT recruiters.


First, let’s take a look at the current situation. As it stands, there’s a risk of instability with this new work scheme - one that nobody is considering to its full extent.


There are plenty of options for hiring workers internationally nowadays and a common one today is that US companies are paying in dollars to Mexican technicians. They can issue a formal contract to incorporate them to the company or just contract them as freelancers.


However, this raises a new issue which was not foreseen at the very beginning. The high wages (on the employees' context) offered by these companies are encouraging developers to be highly selective about where they work, which is translated in a bidding war amongst companies when trying to attract them to fill their own demand. This has led to an unprecedented rotation in staff, where people don’t last even a minimum of 1 year at a company before jumping to another. And the main reason - better salary.


On the other hand, working remotely has opened the door for another phenomenon. Such individual hires present the risk of a single person working for multiple companies simultaneously to cash a bigger check. This obviously leads to reduced performance and output on one side, and burnout of the person and lack of focus on the other.


Ultimately all the above reasons are reflected in a high staff turnover rate that generates (as mentioned before) lack of experience, high salaries demand and most concerning, the engineers will not be qualified for the position they are targeting, which affects the company that needs to start looking for a new candidate all over again.


And let’s not forget that the hiring process has changed from one that used to last 15-20 days on average, to one that lasts up to 3 months. Imagine having to interview candidates for the same role every 6 to 8 months, and last 90 days trying to find the right fit!


Is there a way to solve this situation?


Fortunately, yes. It is possible to overcome this problem with a well established, yet often overlooked solution in recent years.


US companies can still get the talented software developers they need from foreign engineers with the cost-benefit advantages by hiring IT consulting agencies that have already done the hard work. They have looked for, screened and selected the talent, trained them and even offered IT engineers the assurance of complying with their country's regulations - such as tax payments, employment benefits and health insurance.


We already mentioned that outsourcing software development to Mexico with a qualified IT service provider can bring significant cost savings. We are talking 40-75% lower than what you would pay a local counterpart which might be struggling to find and maintain talent themselves.


Another benefit of hiring a software development agency is that the staff is managed by an internal project manager or a HR associate, so there’s little risk that a single person might be working on multiple jobs at the same time. Agencies usually care for their customers and the opinions they generate, so they often offer guarantees to ensure quality and satisfaction.


And finally, the most important part - they can start working virtually immediately!


Time for self-promotion…


If you are in the market for software developers or IT consultants but are facing the challenges of the current state of affairs, contact us at hristovdevelopment.com. We understand the difficulties you are going through and we would be happy to help.




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