After a tech talent hiring boom during the pandemic, labor markets have begun to normalize, including many layoff announcements from tech companies in 2023. But the gap between graduates with computer science and other relevant degrees and the number of job openings in the industry is expected to persist over the next several years.
We believe this is a catalyst for technology services spend and the outsourcing of work to third party vendors.
While the question of how to secure enough tech talent is not a new one, we believe that the pursuit of technology expertise and vendor relationships in the coming years will be influenced by COVID-19 and recent geopolitical turmoil.
As a result, for IT services providers, the winners of wallet share will be those have the most optionality for clients.
This idea of optionality can mean several things:
First, a global talent base. Providers with onshore, offshore, and nearshore services will have a variety of price points, more language capabilities, cultural affinity with clients, and around-the-clock service. We've already seen several examples of M&A in the industry engineered to increase global delivery, and in particular Latin America has gained traction as a tech talent hub in recent years.
Second, employees with breadth of expertise. We expect that the providers that will succeed will be those have expertise across many technology ecosystems and platforms, in many ways remaining agnostic in order to best serve clients.
Third, embracing advances in technology. Providers that augment human-based services with automation and artificial intelligence will enhance value to customers and drive down their own costs.
Ultimately, the world events of the last several years have put a spotlight on the need for technology talent and partners that deliver that talent in a way that increases agility for clients while decreasing risk.