With technological advancements pressing more industries and businesses to go digital, the demand for tech professionals continues to grow each year and tech roles become harder to fill in. In fact, based on an Indeed survey on hiring managers and technical recruiters, 86% of the respondents said that it's a challenge for them to find and hire software engineers.
In addition, Jobvite's 2018 Recruiter Nation Survey stated that 74% of recruiters believe that hiring will become more competitive this year.
Given the growing demands for the tech workforce, one could say that software developers have become a valuable resource for any industry and any company.
When hiring software developers for your startup, here are the five common challenges that you might encounter as you build or complete your tech team.
Limited pool of candidates with relevant technical skills
It is already a well-known fact that there is a workforce shortage in the tech industry; however, one of the leading causes of this issue isn't the lack of graduates. Rather, it is the lack of tech graduates and professionals with the right skills set.
Despite the growing number of tech graduates in recent years, 67% of recruiters still struggle to find top quality candidates with the right skills they need, according to Jobvite's 2018 Job Seeker Nation Report.
The most common skills or experience that recruiters find difficult to recruit roles in big data and analytics, security, and legacy systems.
When hiring software developers, you might receive several applications yet still have a difficult time actually hiring a developer, since most might not have the expertise you need. Additionally, 86% of qualified candidates are already employed, according to 2018 recruitment insights by TalentNow.
To resolve this common challenge, recruitment strategies are now also utilising AI and analytics. According to TalentNow, businesses leverage tech to make good hiring decisions; they also use organisational network analysis, use new HR tools, and understand the roles and workflow patterns to efficiently and effectively hire talent.
High recruitment costs
Many people and businesses most likely underestimate the complexity of recruitment, especially when hiring software developers. It takes lots of patience, time, skill, and money to find the right developer for a position.
One of the most crucial factors when businesses start hiring is the costs of recruitment. A study by the National Association of Colleges and Employers estimated that it costs an average of $7,645 to hire in a company of up to 500 people. In another research, the Society for Human Resource Management says it costs $4,129 to hire an employee within a 42-day recruitment period.
In addition to this, according to Entrepreneur, business owners spend 40% of their hours at work doing tasks that do not generate income such as recruitment.
Needless to say, hiring software developers is not only time-consuming but also a very costly endeavour. To solve these issues, many companies opt to hire the services of a third-party outsourcing provider in order to reduce hiring costs.
If you are thinking of hiring a developer, be aware and understand that it would take your company a higher amount of cost because of the period of time you would have to spend on looking for a developer. According to LinkedIn's 2017 global survey, recruiting software developers can take from a few days up to four months. It is best to be financially prepared before you start looking for your ideal developer.
Related Article: How much does it cost to hire a mobile app developer?
Lack of formal IT education
A study by Digital Ocean found that 39% of hiring managers find that lack of formal IT education is the top challenge to hiring software developers.
While most IT professionals have a degree in Computer Science and the like, there has been an increasing number of bootcamp graduates in recent years. And these bootcamp graduates are now also filling in recruiters' job ads.
While there is a generally positive view on hiring bootcamp graduates, companies are still not too keen on hiring online graduates. In the same study, only 14% of survey respondents from the UK are extremely positive about coding bootcamps, while 44% are neutral about it.
In the same survey, when asked if their company was able to fill positions with bootcamp graduates in the past few years, 23% responded with ‘Yes, a few', while 48% did not hire bootcamp graduates.
Fortunately, according to the survey, 55% do not discriminate between IT college graduates and bootcamp graduates; however, 23% said that it would depend on the position they were applying for.
Even though bootcamp graduates are helping to fill in the demand for tech professionals, most companies still prefer hiring university graduates when hiring software developers. As a business owner or manager, it will be your call whether you would look at the educational background as a deciding factor for hiring your tech team.
Competitors with better offers
75% of recruiters have met candidates who did not push through with an offer, and 53% of this was because the candidates received a better offer, according to the Jobvites 2018 Recruiter Nation Survey.
Part of the difficulty in hiring software engineers for recruiters is due to the tight competition in the industry right now. Almost every company needs developers, and each company provides different benefits or perks to attract the best talent.
In CareerBuilder's 2018 Midyear Job Forecast, companies highlighted various perks in their job offers as an effort to engage potential candidates and ultimately hire new developers. In the study, companies offer the following office perks:
- 36% - Casual dress code
- 31% - Employee discounts
- 25% - Flexibility to work remotely
- 22% - Extra paid time off
- 21% - Signing bonus
- 14% - Free lunch
- 12% - Gym membership
- 10% - Work from home Fridays
- 8% - Daycare
These are just some of the many benefits companies offer to entice new tech talents to join their team. Job seekers, including IT professionals, are now looking more than just competitive salaries. They are also considering other factors such as benefits, perks, company culture, and opportunities for career growth.
When hiring software developers, what unique benefit or perk can you offer to attract your desired tech talent?
High salary demands
According to the US Bureau of Labour, there will be 1.4 million new developer job openings by 2020, but there will only be 400,000 IT graduates who can fill them. This huge gap explains how software developer salary levels continue to increase as companies offer higher salaries as an attempt to gain more tech talents.
Based on StackOverflow's 2018 survey, a developer's salary depends on the following factors: professional experience, education, location, tech stack, and tech tools. However, the increasing demand for software developers has made salaries higher year after year. According to TemplateMonster, developers' wage growth rate is expected to increase by 4.5% this year, and by 5% in 2020.
When hiring software developers, keep in mind that in-house developers definitely costs more, especially considering the factors given above. With the added competition, it is up to you how you can provide an excellent offer to your new developers while keeping your budget at bay.
Your next challenge…
Keeping all these challenges in mind when hiring software developers, how do you overcome these?
One of the effective ways to further reach out to tech talents is to leverage the power of social media. Based on a study by SHRM, 84% of organisations use their social media accounts as an effective recruitment tool. True enough, 59% of candidates use social media to research companies that they are interested in, and 48% use social media to look for their next job as stated in a study by TalentWorks International.
In addition, after successfully hiring your ideal developers, the next challenge comes with retaining them. You wouldn't want to be a business that often looks for new talents because of a high turnover rate. True recruitment success is also measured by the loyalty or longevity of a new hire.
Part of how you can retain your new developers is to implement a good onboarding process to help the new hires transition to your company's policies and work culture. Since onboarding has been proven to increase retention rate, 39% of businesses dedicate 1-3 business days for the whole onboarding process, according to Jobvite.
It is also best to find out the causes of your employee turnover. A TEKsystems survey found that 40% of tech leaders and professionals struggle to retain developers and other tech talents because of the following reasons:
- They are hiring for roles, not careers
- They treat software development as a task-based job
- They don't make retention as a priority
- Projects become stagnant
- There is a lack of opportunities to grow
- There is a lack of similar-minded talent
Considering these factors will help you determine the best course of action to find, approach, hire and retain your new tech talents. In a fast-changing environment, keeping up to date with trends and continuously shaping your structure and culture accordingly can help you overcome these five common challenges when hiring software developers.
Hiring software developers doesn't have to be tedious and time-consuming. Learn how Cloud Employee works, see our Developer Pricing Guide, or talk to us. You can hire dedicated offshore developers with us across many technologies.