Are IT consultants your best solution to the talent shortage?
Demand for tech talent is fierce. The Twin Cities alone boast 164,500 opportunities for tech pros, and that number is projected to keep growing. Unfortunately, high competition also means that employers face high tech talent turnover. Though many have implemented retention-driven strategies and launched specific perks designed to hold onto these fleeting IT pros, reports still reveal a turnover rate of between 9.1% and 10.6% for employees in the tech industry.
For companies, finding ways to minimize the cost of these empty seats can be as high of a priority as developing retention strategies. In addition, some solutions that minimize turnover costs can be easier and faster to implement. One such solution: working with tech consultants.
Though working with IT consultants won’t be the right solution for every employer, we’ve compiled some key information surrounding the ways consultants can minimize the cost of an empty seat. You may find that this change to your hiring strategy is all you’ll need to combat the tech talent shortage.
Understanding the Hefty Prices: You’re Already Paying
Replacing top tech talent can cost you a pretty penny. More than likely, you’re already aware of the tangible, trackable investments, such as recruitment costs and/or staffing service fees and training expenses. These are by no means to be disregarded. The cost of losing an entry-level Millennial IT pro is estimated to be between $15,000 and $25,000, and the cost of replacing a developer making $90,000 a year estimates between $45,000-$67,000 – a hefty sum.
However, the greater costs are not as easily measured. The most dangerous of these include lost productivity and engagement from other tech employees and lost productivity from your new hires while they train in at your company, which in turn can lead to your tech team feeling overworked and dissatisfied – resulting in even more turnover. It’s a dangerous cycle. One study suggests a company can expect to pay 50% of an employee’s salary and benefits each week a position is vacant, due to production and productivity loss. Another estimates that a company’s “true loss” can be up to 213% of the previous employee’s salary when all is said and done.
Given the startling numbers, what are hiring managers doing to keep their tech teams – and budgets – afloat? For many, developing new retention strategies has been a top priority. However, despite best efforts for retention, the facts remain: it’s a competitive market. You will face the occasional empty seat. It’s the cost of that empty seat that can be managed.
Tech Consultants: High Value, Low Obligation
When companies turn to firms like ESP seeking experienced tech consultants to help manage turnover costs, they are sometimes surprised to find that consultants’ competitive hourly rates can end up costing “more” per hour than a full-time IT pro’s salary would. However, we encourage our clients not to let a consultant’s sticker price prevent them from reaping the many hidden cost savings to consulting services. And keep in mind: choosing to work with an IT consultant doesn’t necessarily mean an end to your search for the perfect permanent tech hire. While some companies find consistently working with IT consultants is their best long-term fit, others see consulting services as a short-term solution – allowing for continued productivity while giving hiring managers the time they need to find the right fit for a permanent IT role. Either way, we’ve pulled out some of the key reasons why investing in IT consultants can lead to long term-savings for your company:
- Jump Right In: Not only is consultant staffing the fastest way for you to fill your talent need, but it also significantly cuts down on onboarding costs. Experienced IT consultants are very adaptive and innovative, which means that they can jump in and start helping your team out right away. What’s more, they aren’t required to participate in any company-wide onboarding procedures, presentations, or trainings, making it truly possible for you to see a fast turnaround on your investment.
- Slash “Extra” Costs: Part of the reason consultants bill at a higher rate is that their clients (that’s you) are not responsible for providing them with benefits and perks – including PTO, health insurance, 401Ks, etc. In some instances, consultants even work remotely or with their own technologies – saving you set-up time and the costs associated with it. Some of these details are dependent on whether a consultant bills as a 1099 or W2 status, which is a distinction your recruitment firm will be able to explain to you. Contact us for a more comprehensive understanding of the different types of IT consultants.
- Don’t Pay for Thumb-Twiddling: Sometimes your tech needs won’t be extensive enough to justify opening up a new permanent tech role. Perhaps you’re looking at a website redesign, or are wanting to move forward with some specific maintenance or development projects that your team doesn’t have the bandwidth to take on. Working with consultants allows you to complete these projects without taking on the commitment of another salaried employee.
- Reap The Benefits Of An Empty Seat: Though the end-goal is to increase retention and keep your tech team’s seats “filled,” there are many benefits to working with a “rotating” team. Because consultants work on short-term contracts or a project-to-project basis, they are much less likely to burnout or check out from their work. Remember that a tech pro who has given his or her resignation may have been disengaging from your team and his or her work for a while, and that such behaviors in and of themselves can be detrimental to your team’s overall productivity and workplace satisfaction. Ensuring that your team is comprised of only those who are engaged and satisfied with their work, including consultants that you have on board, is essential for maximum team productivity.
- Embrace The Snowball Effect: For companies who work with revenue-generating software, empty seats are a major hit to the bottom line. By filling your IT pros’ seats faster, you not only help to control lost revenue and productivity, but you also drive additional revenue – a snowball effect that benefits your tech team and leaves your company on top.
The tech talent shortage means that demand for IT pros is no longer limited to the Silicon Valley. Hopefully, the tech hire initiatives of today will mean a future where tech talent supply meets demand. Until then, companies will need to continue to employ hiring tactics that both attract talent and effectively manage the costs of their empty seats. While working with IT consultants is certainly an effective tactic, it is by no means the exclusive solution to your talent needs. We’ve found that offering both consulting and permanent tech hire solutions to our clients has helped them to meet their short and long-term needs: introducing them to faster and more flexible hiring (and a new pool of qualified candidates) while maintaining permanent opportunities that are also an important part of their company’s culture. By identifying the ways IT consultants can support your unique tech team, you can mitigate costs and propel your success.
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