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The World Is Headed Towards a Severe Talent Crunch; Globalization Is Key to Bridge the Talent Chasm, Says Zinnov

Globalisation

– 69% of employers find it difficult to fill job vacancies; increased demand in technology & logistics segments

– 76% of the tech talent supply does not possess the required skillsets to fulfil tech job roles

– Digital Engineering and the resultant spend are expected to accelerate across industries, resulting in a convergence of skills, further widening the talent supply-demand chasm

– India, China, Canada, Poland, and Mexico emerge as top COE hotspots in the world

The unprecedented need for companies to innovate and digitalize faster, has made talent a top priority. With the ongoing talent wars, organizations have been scrambling to manage the ‘Great Resignation’ as well as find the right talent. This is evidenced by the ever-widening gap between the talent demand and the woefully inadequate supply. A case in point is the global Artificial Intelligence (AI)/Machine Learning (ML) talent gap that companies are grappling with as they adopt platforms and data-driven models. Zinnov‘s analysis shows that while the global AI/ML talent gap stands at a massive ~1.2Mn, there are only ~650,000 AI & Big Data/Analytics professionals who are directly employable in these roles.

To bridge this gap, companies will need to explore newer talent strategies including leveraging global talent hotspots. Zinnov’s one-of-a-kind study titled, COE Hotspots of the World,” is a comprehensive look at the top global destinations with under-tapped talent pools. It explores the factors that make these locations conducive to set up full software engineering teams, and how globalization is a critical lever in winning the talent wars.

 

COE Hotspots of the World

An amalgamation of extensive primary and secondary research, the Zinnov study covers 13 countries from across Asia Pacific (APAC), North AmericaLatin America (LATAM), and Eastern European regions, evaluated across four key dimensions of talent availabilitysoftware engineering ecosystem maturityease of doing business, and cost analysis. The countries evaluated include IndiaChinaPhilippinesCanadaBrazilMexicoLithuaniaEstoniaPolandBulgariaBelarusRomania, and Czech Republic using data from the US as the baseline.

Building scalable Centers of Excellences (COEs) with the capacity to house complete software engineering teams requires the organizations to identify the best-fit location. Although all 13 countries evaluated exhibit high potential for setting up software engineering teams, they show different degrees of potential in terms scalability of teams, availability of diverse talent to build complete software engineering teams, affordability, and ecosystem maturity. The maturity of these ecosystems is reflected in the presence of academic institutions for building talent pipelines, Service Provider companies to leverage local partnerships, start-ups, and ease of doing business in terms of languages spoken, government regulations, geopolitical stability, IP, and data privacy.

 

Globalization – A Talent Gamechanger

The pandemic brought the criticality of globalization into razor sharp focus, not only to ensure business continuity, but to future-proof organizations against disruptions. The role of talent in future-proofing organizations, especially now with the proven success of the remote work model, is undeniable. Zinnov’s analysis shows that enterprise software companies with globalized engineering R&D locations are valued higher at a 7.1 multiple, compared to companies with domestic ER&D at a 5.4 multiple. Adding to the fray, the acceleration of global Digital Engineering spend across industries will result in a convergence of skills, hence putting a premium on skilled talent around the world. This global talent crunch, if not addressed by solving for the source of talent, rather than competing with the same pools, will inevitably lead to a stalemate, that will not only hamper business growth but also cripple organizations with scaling challenges.

As organizations chase talent around the world, a distributed multi-hub strategy will become imperative to drive business growth and accelerate innovation. And trends such as increased adoption of business communications platforms, development of Cloud-based infrastructure for closer collaboration, and the emergence of new regulations have further emphasized the effectiveness of a multi-hub strategy.

Speaking about the unique study, Pari Natarajan, CEO, Zinnov, said, “Talent will be at the core of decision-making for organizations across the globe. As leaders grapple with the increased talent crunch, it will become critical for them to identify new talent hotspots to build Centers of Excellence where full software engineering teams can be housed, that can take end-to-end ownership and be scaled at optimal costs. Our experience with our customers in a post-pandemic construct, highlights the potential that Eastern European countries possess in terms of high-quality talent; however, this is hampered by scalability challenges due to limited talent pools. India emerged as the best-fit location as it will be home to 1/8th of the world’s digital talent by 2030.”

“Additional dimensions such as geopolitical stability; ease of doing business; a mature ecosystem of technology start-ups, universities, and Service Providers; and strong processes that go well beyond business continuity to create business excellence, are what continue to make India the top choice for companies. With a continued focus on human development programs, Asian countries specifically, have the potential to outpace other economies in growth, primarily due to the talent advantage,” he further added.

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