The World Is Not Flat, And Good Help Is Still Hard To Find (Apologies, Tom Friedman)

There is many a pearl of wisdom to be found in Berkshire Hathaway Inc.’s celebrated Shareholder Letter, where in its most recent installment, Warren E. Buffett, the great value investor, Sage of Omaha, and all-around good (and very rich) guy issues the following warning: “Don’t ask the barber if you need a haircut.” Something about wandering into Lloyd Blankfein’s office and wondering if you should be doing more M&A deals. Tougher Wall Street regulations? For the birds! Having Goldman Sachs traders worry about global risk management – like having Saddam Hussein watch over your nuclear weapons stockpile or the brothers at Delta Tau Chi curate your wine cellar. The point: don’t ask me whether you need a remote IT workforce …

Instead, ask any economist what would happen if a given commodity – such as oil or lithium, hey you, I’m-sitting-on-a-thousand-laptop-batteries Tesla-driver – became scarce, and you might just receive a textbook, two-part answer: firstly, make more efficient use of what you have (indeed the hybrid car comes to mind); and secondly, explore alternate sources towards the same end (think windmills and solar panels). And if consumption cannot be limited regardless, the price of that commodity will, of course, continue to rise.

Whether you’re filling up at the gas station, amping your Prius, or filling positions for IT professionals as your company’s hiring manager, you’ll encounter much of the same problem: IT talent – as a local market commodity – has become preciously scarce and hence expensive and difficult to procure. And just like discussions around our Nation’s dependency on (mostly foreign) oil and other precious goods, it is impossible today not to consider the local-global context behind the demand for and supply of IT talent. Given the post-recession blues that surround us, it may come as a counter-intuitive shocker that government estimates put the shortfall in talent still this year at 10 million individuals – which it measures as the number of domestic workers required in order to just keep up with the nation’s productivity levels. (On that very point, however, on how we did manage through a jobless recovery, increasing productivity with fewer workers, I’ve just witnessed a most Dilbert-esque exchange in our Silicon Valley office, with folks now associating being no longer stuck in traffic for hours on their morning commute along the nightmarish Highway 101 as “great for me but unhealthy for the economy.”)

Driven by such irreversible demographic macro-trends as declining birth rates and the coming vacuum left by the soon-to-retire Baby Boomer generation paired with steadily dropping enrollment rates for science graduates, the impending “Talent Shortage” will become one of our great economic challenges for decades to come (making assorted trading-floor shenanigans of recent memory look paltry). Already – and especially in the field of IT – it is taking hiring managers longer to find fewer qualified candidates at higher salary levels (even in a job market where anybody fit to as much as just fog a mirror is applying for Java developer roles). (And it is perhaps a troubling matter of fact that the U.S. produces more board-certified sports therapists than computer scientists; and in Germany, another fast-aging country, there are now more landscape architects than electrical engineers.)

The Talent Shortage – I predict – will bring out the textbook economist in all the rest of us: either we make our existing people more efficient, and/or we find alternate (non-domestic, speak global) sources of talent. (The former, an exercise in what is known as “talent management,” is about creating just the right match between work and worker as well as striking an optimal balance between full- / part-time workers and internal / external positions.) The latter, often referred to as “remote staff augmentation,” works on the principle that there is an asymmetric distribution between work and workers in high- and low-cost countries, respectively (for example: the U.S. or Germany vs. Brazil, Bulgaria, or India); and that it is more practical (in most cases and for all parties concerned) to move the work, and not the worker (see my previous blog).

There are some fundamental changes in the world of work that are re-shaping the nature of both the workplace and the workforce; changes brought about by technology and globalization that are calling into question the traditional proximity between the work and the worker. Most IT professionals today have experience with distributed development teams – either as part of a geographically dispersed organization across multiple office locations or during the course of working with an offshore services provider. The notion that IT (and other forms of knowledge-) work can be done remotely, in a virtual fashion, now seems hardly revolutionary.

Just a quick statistical account of ‘Remote Working / Teleworking’ here in the States and in Europe will help make the point:

  • “It is estimated that 100 million U.S. workers will telecommute by 2010.” (Kiplinger)
  • “In a survey of 178 U.S. businesses with between 20 and 99 employees, the Yankee Group found that 79% had mobile workers, with an average of 11 mobile workers per company and 54% had telecommuters, with an average of eight telecommuters per company.” (Yankee Group)
  • “15% of the EU workforce can be described as ‘mobile workers’ (spending more than 10 working hours per week away from home and their main place of work) and 4% as mobile teleworkers.” (Statistical Indicators Benchmarking the Information Society)

Through remote staff augmentation, employers can remotely deploy individuals (and teams of individuals) across geographic distances and time zones, managing them and collaborating with them (almost) just as effectively as if they were all in one physical location. This is typically accomplished through enabling processes and technologies – giving rise to something akin to a “Virtual Workplace,” a collaborative and often web-based environment for performing distributed work. By electronically moving the work, rather than physically placing the worker, employers can effectively augment their local staff with global talent that is situated off-site for tasks that can be performed remotely. And given the sheer population size and ample talent pools in many low-cost countries (my current “there-is-IT-services-export-beyond-India” favorites include: Philippines, Argentina, Ukraine, Egypt, Vietnam – but let us revisit again China next year), seemingly poised to do just the opposite from our high-cost countries in terms of high fertility rates and the wholesale graduation of IT workers, the long-term fundamentals behind global talent sourcing appear to be solid.

To be an effective strategy to address the Talent Shortage remote staff augmentation must be implemented (and its effectiveness continuously measured) along the following three success factors:

  • Access – give yourself the flexibility you need to meet all your skills requirements, as the likelihood of finding just one offshore partner that has the breadth, depth, and ready availability of all skills required is low (consider multi-vendor arrangements for reasons of both readiness and redundancy);
  • Quality – remember the adage “quality is not a function of size;” find suitably sized offshore partners that will commit quality resources, regardless of business volume (there are thousands of high-quality firms in India alone that may be successfully engaged on smaller or mid-sized projects – i.e., for business volumes generally too low for the top-tier Indian vendors);
  • Cost – follow a diversified country approach and be careful not to over-invest in one particular offshore location which may overheat due to popularity.

If indeed the world is flat (as it has been famously and convincingly argued), or at least, if the world is becoming bigger and smaller at the same time, the dual realities of a global workforce and a virtual workplace are forcing us to simply think differently about workers and their work. Remote staff augmentation is a key part of that new thinking, as the Talent Shortage combined with rising cost pressures and the fact that many of today’s IT jobs can be performed remotely, call for a more global and virtual view of talent acquisition and delivery.

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