The Talent War—It’s intensifying

When you’re talking workforce, there’s a statistic out there that’s quite eye catching: since January 1, 2011 about 10,000 baby boomers reach age 65—typical retirement age—every day. And that’s supposed to go on for another 18 years!

And while plenty of people stay on past age 65, there are lots of people retiring. That combined with the recent explosion of growth in IT means there are more open positions than ever. (More on that next time.)

There are many other things in the mix that make the IT field extremely exciting to be in too. Take our metro area: with unemployment for certain IT specialist positions at less than 2.5 percent—pretty darn low—it’s a tight market, one that candidates can take full advantage of. It is candidate-oriented, candidate-driven and companies are scrambling to snatch up talent whenever they see it.

Outsourcing less and less; near-sourcing more and more

And then there’s this, the focus of this article: Rising prices of outsourcing in India.

The “war for talent” is only going to get tougher. McKinsey and Company, who came up with that term in 1997, were right on target when they coined it. The search for the top individuals in IT keeps heating up. And it was hot already!

For awhile, it was pretty straightforward regarding outsourcing work to India. It cut costs for U.S. employers and allowed them to “focus” on the core responsibilities of their company. However, it’s not as cut and dry as that now.

Prices of outsourcing are rising—not just the monetary amounts, but the unforeseen costs of having to totally change how a company is managed when it’s outside of U.S. borders.

And costs in India—IT’s top location for outsourcing jobs—are increasing too. Because of how quickly outsourcing has grown there, there’s some wage inflation as a result, especially for more top level positions. In 2010, wages in India’s outsourcing sector rose 10 percent. In 2011, that number was about 12.9 percent, and this year, it looks like wages will increase again by about 12 percent. Those are some big jumps!

So what this all comes down to, is that many employers are finding that they can do work just as cheaply at home, or almost, anyway. Plus, with the added ease of managing employees within the U.S., real costs can sometimes be lower. In fact, some Indian companies are now outsourcing work here too.

We’re also seeing a shift in US companies: some are starting to use in-sourcing or near-sourcing as their mode of operation in order to keep their top talent close at hand.

That means more IT jobs on the market. Candidates, especially those with more knowledge and experience, will have their prime pick of positions to choose from and it really puts the squeeze on employers. They either find ways to take their recruiting strategies to the next level, or they lose talent to their competitors. And that’s a battle no one wants to lose.

The bottom line is this: IT candidates are in an even better place than before. In the war for talent, the war is all about you. You’re not going to have to struggle as hard to find work. Keep your skills fresh, your resume up-to-date, and employers will be doing more and more of the fighting for you!

As always, let us know when you want to make a move and we’ll be happy to help!