Build, borrow or buy – where to find the best talent in the IT sector
The acquisition of talent is an essential element of any successful organisation. Such an endeavour in the IT sector is fraught with danger and challenges – most notably a shortage of in-demand technical skills resulting in a plethora of options for experienced IT professionals.
We are in a constant bidding war for candidates with highly valued technical skills (particularly in areas of Software Development, Data Science, IT Security and Cloud Engineering) and how a company approaches Talent Acquisition can have a significant impact on a P&L.
When seeking to enhance the existing skill set of a company there are three options:
- Build: upskill existing staff
- Borrow: hire experienced contractors / freelancers who charge by the day / project
- Buy: hire someone to join the company as a Full-Time Employee (FTE)
There are advantages and disadvantages to each of these which we will explore below…
1. Build – Through internal talent development
This is considered the most cost-efficient and risk-averse of the three options as the employee is already inducted and fits the existing culture of the company. Therefore the risk of making a bad hire (i.e. one that ends in resignation or termination within 6 months) is greatly reduced and the cost of such an error (30% of the employee’s first-year earnings according to the U.S. Department of Labour) is avoided.
A welcome side-effect of this strategy is that it cultivates a learning culture and growth mindset that increases staff retention and acts as an incentive to would-be hires.
There are two disadvantages however:
- Developing such skills takes time and will not address an urgent need for expertise at short notice
- Upskilled staff increase in value and may decide to leave for more senior roles with other companies thereby negating the investments made in their development
2. Borrow – Through the services of contractors and freelance Consultants
Engaging the services of IT contractors provides a level of flexibility for employers which enables them to hire teams of specialists to quickly implement new projects.
At the high-end of the market these professionals tend to be highly-skilled and able to quickly integrate into new environments. Onboarding is quick and uncomplicated due to the (usual) short-term nature of the relationship. There are no negotiations around Annual Leave or other benefits as these are not offered to contractors. Savings are made by the employer who does not have to pay pension contributions or Employers PRSI.
Disadvantages include the cost of such resources as IT contractors tend to cost 30% more than FTE’s (based on a daily rate). There is also a risk of losing valuable project knowledge and client rapport if / when a contractor decides to leave.
3. Buy – Through advertisement, internal Talent Acquisition team and external Recruitment Agencies
The traditional approach and the one that springs to mind when Talent Acquisition is mentioned.
This is quicker than upskilling existing staff and less expensive (short-term at least) than hiring IT contractors.
However, costs can mount up when factors such as advertising, agency fees, job board licenses etc. are considered.
The costliest aspect of this approach is the time spent by existing staff (often high-ranking managers) to assess and interview potential hires. The internal IT Recruitment team, HR, Marketing and Procurement teams may also be engaged. A greater degree of due diligence is practised (when compared to hiring IT contractors) due to contractual obligations associated with FTEs.
While some requirements can be easily filled through advert responses the specialised roles such as IT Security Architect or Azure Consultant require dedicated searches by experienced “head-hunters” in your Talent Acquisition team. If these do not exist in your internal TA team then you may have to engage an external IT Recruitment agency who typically charge 15% – 20% of the salary further increasing your overheads.
Furthermore, due to the market demand for highly skilled IT professionals it may take 2 months to find a suitable candidate only to have your job offer rejected due to a counter-offer from their current employer or a better offer from a competitor. This results in a new search and many hours of wasted time by all stakeholders up to this point.
As mentioned above…fraught with danger and challenges.
Conclusions
Bearing the above in mind there it becomes clear that one option is not necessarily better than any other and a robust Talent Acquisition Plan should incorporate all three utilising short-term contractors to fill urgent requirements whilst upskilling existing FTE’s to meet future demand. All the while making new hires with a view to development potential and career growth.
Such an approach is part of the Ergo operating model and we offer exceptional career development opportunities to both junior and senior hires through a number of incentives including:
- Ergo Academy
- Graduate programs
- Educational Assistance – including access to Professional Certifications, study time and bonuses
- Structured career plans
For more information on how Ergo can help you to develop your career contact me today.
