Six reasons why you should outsource the IT skills you need
IT and/or Technology are no longer just one of many industries and business types. They are now the core infrastructure of any company, regardless of industry or sector. And in this increasingly digital world, the key to a company’s success is to make use of IT to optimise operations and to create new viable business models.
IT professionals continue to be in high demand
Since the pandemic started in 2020, this has led to significant changes within recruitment and the talent landscape in Japan. However, the IT product and solutions companies that Global Enterprise Partners supports, as well as companies in other sectors, have not experienced a drop in demand for internal IT infrastructure roles. On the contrary, we have conducted a research which shows that those who move into IT in 2020 earns an average of 21% more than those who move out (see graph below). The results of this study has shown that even in times of slow recruitment or redundancy, retaining skilled IT employees continue to remain a high priority for all companies.
How to secure IT talent and skill-sets, particularly within ERP?
Japanese companies have traditionally employed mainly permanent staff, and often manage to secure the necessary skills and technology either for launch of their products and services, or for subsequent maintenance of various projects, including the development of new business models or optimisation of internal systems.
Below are three main ways companies secure IT talent and we discuss what are some of the benefits as well as disadvantages:
1. Appointing different roles to employees and recruiting people internally
- Benefits: Hassle-free recruitment and low additional costs
- Disadvantages: If the employee in question does not have the necessary skills needed for the project, training may be needed which could be time consuming. It also becomes difficult in handing their work over when they leave the company.
2. Create a dedicated position and recruit on a permanent basis
- Benefits: You just need to source for the people who already have the relevant skill-sets you require.
- Disadvantages: Recruitment can be time consuming, and there is a risk where you might not be able to find the right person to do the job (including the right culture fit). If the project only lasts for a short period of time, a new position will need to be created for this hire after the project ends which could mean additional cost.
3. Subcontracting to IT vendors and consulting firms
- Benefits: A high level of expertise which gives you the support you need. You will also be able to attain independent advice which can be beneficial for the company in more than one way.
- Disadvantages: There may be potentially huge costs as consultancies can be more costly. You also cannot use these vendors to help teach and transfer any skills to the people in your organisation.
How do you decide which method to choose?
It all depends on the size of the organisation, the type of project and the results required. This is why in addition to the methods above, there may be better solutions that can be cost-efficient, help you attain effective results, and attain transferrable skill-sets. And this doesn’t require a large investment in hiring but instead, opting for the option of outsourcing (Gyomu Itaku).
Outsourcing (Gyomu Itaku): What is it and what are some of the benefits?
Outsourcing is a term for contracting with specialists in a particular field either as a freelancer or sole trader. The benefits include:
- The ultimate quick-response solution
Through outsourcing, you can find the people with the specific skills you need, saving you the time and effort of having to train your employees. Because this is an outsourced service as opposed to a recruitment service, the long on-boarding process that is usually required for employees isn’t needed in this case and the employee can be expected to work immediately.
As an experienced outsourced IT professional who has worked on a variety of projects, they have a clear understanding of what is expected from them in their role and how they can deliver results in a set timeframe. This allows them to contribute to the organisation in a way different to permanent employees who tend to focus on their long-term career path within the organisation instead of immediately thinking of the end results.
- Cost effectiveness
Recruiting a new permanent employee involves a number of costs including salary, insurance and benefits. Hiring itself could also be a time-consuming and expensive exercise as you want to ensure you hire the right fit instead of a mismatch. Outsourcing to vendors or consulting firms are also often very costly, as is the cost of maintenance. Hence, outsourcing (gyomu itaku) may be more expensive than paying a full-time employee on an hourly basis but far cheaper than outsourcing and is a very cost effective way to bring in a specialist with the right knowledge and skills.
- Easy approval and internal coordination
If you have a new project which requires you to transfer an employee who is already working in another role, you may have to make a lot of internal adjustments and get approvals from various parties. Outsourcing (Gyomu Itaku) means that you don’t have to move people around or create new positions to recruit permanently. This makes it relative easy to coordinate internally and reduces the time it takes to find the right people within the company. Because it isn’t a permanent headcount, the cost to hire is usually tied to the project and would mean easier approval on headcount.
- An ability to bring in a third party’s perspective
As you would hire IT professionals who already work on an outsourced basis, they would have the experience of working with companies of all sizes and types, even if the skills required may be the same. This allows you to bring in some of the best practice in the market from similar projects, as well as wider perspectives based on their experience in other sectors or industries that you may not have been aware internally.
- Possibility of switching to an employee if needed
If your project turns out to be longer than expected, it is possible with your consent to switch from an outsource to a permanent or contract employment. You also gain new skills for your organisation if you choose to convert them. This can be far more efficient than outsourcing to a vendor or consulting firm for a long period of time, as you won’t be able to inherit the talent into your organisation.
Global Enterprise Partners is experienced with outsourcing (gyomu itaku)
The above are just a few of the many benefits of outsourced talent. If you are looking for an effective strategy to grow your business, please feel free to contact our dedicated team by filling up the form below or visit our LinkedIn page for daily updates on market trends, and other information around tech.