Decoding the IT skills shortage

How independent contracting will revolutionise IT recruitment in 2024 and beyond.

As businesses plan for 2024, no doubt one of their most pressing priorities will be to fill critical roles in their organisations. With the usual spike in resignations towards the end of the year, many, especially those seeking to fill critical IT job vacancies, will be interested in recruitment trends and whether they can use any insights or knowledge to boost their own recruitment efforts. They can. But it requires the bravery of shifting their mindset.

We are looking down the barrel of an interesting, but dangerous, dilemma. Companies need skilled people and they can’t find them. Skilled people need jobs and they can’t get them. This dilemma needs careful consideration because there needs to be a viable connection between the two sides.

A notable trend in 2023 that will be extrapolated into 2024 and beyond is the high demand for critical technology skills. The top of the pile are any jobs involving software development and software engineering. Joining the most-in-demand list are jobs related to cloud adoption and cloud deployment. Then, we have ancillary functions such as DevOps engineering, solutions architecture and enterprise architecture – in other words functions that support digital transformation. There has been an exponential increase in requirements for these skills, far beyond the market’s supply.

One could spend days arguing about the causes in South Africa, but it is a global phenomenon. And so, in the ruthless arena of competing for a small skills pool, businesses who relentlessly pursue full-time employees have had to throw more money at the problem. Over the past few years, salary inflation across critical IT skill sets has reached a level that threatens businesses’ margins. With a swelling payroll cost base, businesses have little option but to increase prices to a point they feel won’t alienate their customers. Beyond that the margin becomes smaller.

One of the most damaging consequences of diminishing margin is that it compromises innovation, instead shifting an organisation into a survival state. This becomes a vicious circle because, especially among SMEs, if there is no innovation, then there’s no growth, and if there’s no growth, no new jobs are being created. Everyone is aware of young graduates bemoaning their lack of experience preventing employment, but if there are no new jobs, where will these young people get the experience they need to advance their careers?

On the other hand, highly skilled and experienced people have followed the global trend and moved into the independent contracting arena. These people are excellence-driven, competent and available, but businesses aren’t giving them a second look.

It’s time for reflection: Is the model that we have been peddling for the last three decades serving us or slowing us down? We all know it is slowing us down but there is still a wide scale reluctance to embrace a candidate pool which will deliver, and deliver quickly.

One of the main complaints bandied about is that contractors charge more per day or per month. This may well be the case, but has a business considered the opportunity and resource cost of pursuing full-time staff at the expense of an independent contractor? Full-time employment and onboarding takes months: How many opportunities did I miss out on by not having a competent person already delivering in that role? Similarly, what did the acquisition process cost? The recruitment software licensing costs? Third-party agency recruiter costs when a suitable candidate couldn’t be found? Within 18 months, what is the cost tied to the near-inevitable task of replacing the person again when they move on?

On the other hand, if a business is willing to invest in an independent contractor, it will get the resource up and running in record time because the resource is available. Contractors are wired to deliver excellence or else they won’t get new contracts or contracts renewed. On the other hand, when the time comes to part ways there is no reputational damage associated with axing a permanent employee, and no retrenchment payouts or long drawn out and costly processes to find another employee.

I have been in the recruitment industry for more than 20 years and as such have seen the world of work evolve. The speed at which the move toward independent contracting in the tech skills space is moving is astounding. If I turn the lens inwards at Acuity Consultants, the number of independent contractors on our books has grown 350% between end-2022 and end-2023. This shift is 100% driven by clients who brought their contracting requirements to the consultancy because they could not find full-time candidates. This trend is expected to continue.

This is the genesis behind One Degree– to connect skilled IT independent contractors with businesses that have critical technical roles that need to be filled quickly and affordably. Only then can businesses shift from survival to innovation and growth, and the promise of creating new jobs and valuable experience for graduates. It’s like putting together a large, complicated puzzle without trying to force incorrectly shaped pieces into the picture. Perhaps the biggest benefit for businesses, if they acknowledge the blindspot and embrace the future of independent contracting, is the type of person they engage. Independent contractors are mature, entrepreneurial, positive, self-governing and are driven by a pursuit of excellence because their success depends on it. I don’t know many businesses that would turn down these attributes. And if it doesn’t work? It is exponentially easier, faster and more affordable to try another resource

Gary Silbermann, Co-founder and Innovation Director at One Degree