In times of economic downturn, managing talent can be a challenge. Keeping the existing staff happy, while trying to get through a recession presents a different set of challenges when things are going well. Bearing all that in mind, the wheels must keep turning and that means staying on track with strategic objectives, including technical and software projects.
Increasing the headcount in one’s company always seems like the mark of growth and success, and in many ways, it is. But something to consider in business, particularly in times of constraint, is adaptability and how you can best make use of external partners to reach your strategic objectives, without taking on additional overhead costs, such as hiring and retention costs.
The challenges and considerations for hiring internally during an economic downtown
Hiring in a time of economic uncertainty can pose a particular risk to a business, particularly when one considers how much companies scrutinise operational and capital expenditure during times of economic downturn. Some of the challenges of hiring during a recession are caused by the following:
Economics: When companies institute hiring freezes, coupled with mass retrenchments, it means that the supply in the talent pool increases, resulting in a large number of applicants for a single job.
Job market dynamics: People are always less willing to leave a secure job and explore new career opportunities, so attracting top talent becomes more challenging in the recruitment realm.
The cost of hiring and retention: As with sales, hiring (and eventually retaining) new talent outweighs the cost of purely retaining your current contingent of talent, because it’s not just about the recruitment cost, it’s salaries, benefits, employee wellness and increases. And that’s in a regular financial cycle, let alone a financial cycle in decline. It’s a potentially risky move to increase your headcount in a time of economic uncertainty.
What to consider before hiring internally during a time of constraint
Competitive talent markets
Let’s take a deep dive into what happens to the talent markets during a time of economic downturn.
Some large organisations implement retrenchments to mitigate the risk of a recession, which results in an inflated talent pool of skilled workers. As the talent pool inflates, so too does the demand for jobs in that field. Unfortunately, the supply of jobs in that field doesn’t usually fluctuate with the demand.
For a hiring team, that means an influx of potential candidates who are looking for stable employment, where perhaps your business only has a specific project requirement for say a software developer or two. Not necessarily a full-time developer.
Talent retention and what it means to software companies
A software company is just that – an entire organisation aimed at partnering with businesses to design and build software. The majority of staff in a software company are software developers and as such, efforts go into retaining and developing (excuse the pun) these employees.
So, when you partner with a software house on your next big project, you’re partnering with developers who are well-equipped to solve problems and build great software.
Many companies source top talent in-house and have their own designated team of software developers. It seems worthwhile to have an in-house development team, however, when economic uncertainty hits, the teams or individuals within teams, that are not fundamental to the operations of your business, these teams and individuals, unfortunately, become the first to go.
How software companies offer a better value proposition versus hiring internally
Skilled and experienced teams
Software companies by design are far more experienced in solving across a broad range of problem sets, and by default, so are their team members. When one partners with a software company, you’re not hiring a team of developers whose sole purpose is focusing on one set of problems, you’re working with a team of dedicated problem-solvers, who have knowledge across various problems, industries and technologies.
The flexibility of team size and structure
Partnering with a software company means you get to scale the size of the team you take on, according to your business and project needs at that time. Whether the project requires two skilled developers, or five, you’ll be able to negotiate that and get exactly what you need.
Scalability is one of the biggest considerations when it comes to success. If your business is able to adapt and scale appropriately in times of constraint, imagine what you’ll be able to do when the economy is in good shape – spoiler, this is where you win.
End-to-end teams
If you were to hire an internal team to work on a new software project, you would have to consider hiring a business analyst and a product owner, along with a cohort of architects and developers. And, if one is to consider the fact that your software projects won’t necessarily be coming in constantly and consistently, it wouldn’t make financial sense to keep an in-house team.
Compare this previous scenario with partnering up with a software company that has the necessary team(s) at hand to design and build your software, it seems the best choice.
The cost factors
The long and short of it – hiring and retaining staff can be a costly exercise. The cost of hiring top talent, throughout the recruitment process, through to onboarding and then retaining them makes sense if your core business function requires that skillset. Something to consider here too is time. The time it takes for your recruitment team to source and onboard staff and how that fits into your overall budget.
However, if you’re engaging with a software company to partner up and manage software projects for you, you won’t be concerned with hiring a team to finish your project – one less thing to worry about!
Long-term development partnerships
Forging long-term business relationships can be a defining factor and what sets you apart from your competitors. The bottom line is the bottom line – business comes down to money. Beyond that though, are the long-term development partnerships you’ll forge through working with a software company. They’ll get to know your business on all levels, particularly from a strategic point of view, whereas your in-house team may not be privy to some of the strategic goals you may have. And who wouldn’t want that kind of (and let’s call it what it is) strategic alliance?
Growing your team is an important part of growing a business, but so is partnering with the right people. Working with a team of people who can understand your business, and your set of problems and create an appropriate solution, can be what makes your software project a success.
Software companies, for example, can offer up a talent pool of skilled and experienced individuals who work across a variety of problem sets and who are able to solve nuanced problems, in line with your business needs.
We could list more reasons why it’s better to partner with a software company than to hire your own development team, but the most important one is by far the collective knowledgebase a software company brings to the table, from directors, architects, analysts, product owners and of course, developers.
