Business & Finance
January 31, 2019

How to Recruit Tech Talent for a Startup

We are in the thick of the digital age, where the bulk of our daily activities rely on the use of computers and digital machines and their transmission of information from one device to another. In fact, our economy is now largely based on and dictated by information technology.

IT professionals are a hot commodity. Building a career in this field is often paired with landing a well-paid job. The market value of a specialist with a rare set of skills, extensive experience, etc. can result in the prominent salary rate not every employer can afford. As a result of chasing cost reduction and global talent pool, new employment models like outsourcing, working with freelancers and even building a distributed dedicated team emerged.

Meanwhile, the IT industry has seen rapid growth in the past decades and continues to grow beyond limits. In fact, 2018 sees a total global spending on information technology of about $4.8 trillion, according to CompTIA. This growth is largely matched by a dramatic rise in the demand for IT professionals, whose growth has shown no signs of decline. In fact, IT professionals are the most demanded across nearly all industries and countries.

In this article, we take a look at the different ways by which you can recruit tech talent in a world where competition for any kind of resources is at its peak, and we’ll be looking at some tips to make the hiring process as smooth as possible.

The Challenge of Recruiting Technical Talent

With the rising demand for IT professionals in many countries, it isn’t surprising that there is a shortage of sufficiently skilled IT professionals that match the requirements of different businesses across different industries. In the United States, for example, LinkedIn researcher Jacqui Barrett finds that there is insufficient IT professionals skilled in software development, software tuning, and database administration, and a number of companies have resorted to reskilling to solve the problem. Moreover, according to research by TechRepublic, cybersecurity is another area of IT that needs more developers. In fact, 57% of businesses are reported to be unable to find enough IT professionals skilled in this direction.

With this shortage in cybersecurity, it becomes a challenge for businesses to hire IT professionals with the skills that they require. With this in mind, it is crucial for businesses to explore various business models and hiring options that can help them find the IT resources they need. Let’s take a look at the different ways on how to recruit tech talent and examine when it’s best to resort to each method.

In-House vs Remote Hires

One of the first considerations you’ll likely come across when hiring IT talents is whether to recruit tech talent in-house from the local market or remote employees who can stay in their homes or wherever they wish to work. Let’s take a closer look at each route.

In-House Hiring

Hiring in-house employees entails that you scout the local market for candidates that best match your qualifications. This may most easily be done by posting jobs on various job posting websites. Among the most popular ones are JobStreet, Glassdoor, and Indeed. From here, you get to a list of applicants who are interested to fill the position, and you can invite each one to your office for an interview or whatever other application procedures you may have.

Once you have selected your preferred candidate, you’ll then be required to prepare a contract for the candidate which documents all the details of his/her employment, including salaries and benefits, both company and government-mandated ones. You’ll then also have to prepare a workstation for the candidate once he/she gets hired, and you have to take note of employment laws governing your state or country, including minimum hiring duration, minimum wage, required taxes and fees, and required benefits like health insurance.

When hiring in-house employees, one of the things you have to work on is building your brand. If your company’s brand is unheard of and does not have any online presence, it’s unlikely that the best candidates would want to apply for the position you’re offering. You also have to make sure that your job description and your desired qualifications are clearly stated on your ads in order to minimize the chances of unfit or unqualified candidates applying for it and extending your screening process. Also, you should carefully plan out your screening process so that you’ll be sure you’re gonna get the most qualified candidate at the end. And if you’re finding it difficult to get qualified applicants to apply for your posting, you can extend your reach through social media.

Remote Hiring

Hiring remote employees means that your employees don’t have to work within your office premises, and instead work from outside, depending on the set-up. There are lots of different options for hiring remotely, and we’ll be exploring these options in succeeding sections. Typically, remote hiring involves screening your applicants online by means of online voice or video conferencing applications or other communication means, instead of having to ask your candidates to proceed to your office. Moreover, your remote employees will be working on your projects from outside the confines of your office walls, so it will typically involve some monitoring system so you’ll be able to track the work progress of your employees even when you can’t physically see them. Usually, this includes time trackers to track when they start and end working, screen sharing applications so you can ask to see what their output from time to time, or some online collaboration portals so you can work with them on different tasks and projects.

When hiring remote workers, it’s also critical to design an effective screening procedure, especially since you will likely only be communicating with them remotely either through voice or video conferencing applications or via phone. It’s important that you test and evaluate their skills. It’s also of crucial importance that you select candidates who are able to communicate satisfactorily well, as communication will be critical with remote hires. It’s also recommended to conduct an interview that will measure their personality and work ethic, as these are highly important in remote jobs where you have to bank on their reliability in order to succeed.

Comparison

In-house hiring is often the default option for many businesses because it’s the traditional way of hiring. If the job you’re offering strictly needs the physical presence of the one who will be performing it, then in-house hiring should is the way to go. Otherwise, for most IT tasks that can be done online or through collaboration and which do not need physical interactions, remote hiring may prove to be a much more affordable option. Since the rates of IT professionals in other countries tend to be much cheaper than in other countries, it’s worth considering hiring remote developers from these regions to take advantage of this rate disparity.

In the next section, we take a look at the different types of remote hiring and see which one will best suit your needs.

Hiring Freelancers

Hiring freelancers involves finding self-employed talents who offer their skills and services without being employed under a company. To find these so-called independent contractors, you often have to post jobs on freelance portals, among the most popular of which are Upwork, Freelancer, and Toptal. On these portals, freelancers whose skills match your qualifications are able to apply for your job, and you get to select which freelancer you’d like to award the job to. Often, you can provide a preliminary screening activity that all your applicants must first perform in order for you to more effectively evaluate your candidates and more easily choose your preferred freelancer. You may also first interview a subset of your applicants in order to help you with your decision. Upon selecting your freelancer, you’ll have to agree on a working rate, and hourly rates are typical for freelance work. You’ll also then have to agree on a time tracking system for payment settlement and work monitoring. Additionally, you might have to agree on payment milestones, which are specific points on your project when you’ll need to settle payments with your freelancer.

Hiring freelancers is a good option when you have a very small task or project that can likely be done by a single individual without the need for collaboration with others. It’s often the cheapest route for remote hiring, because intense competition among freelancers drives their rates down. However, it’s also the riskiest one, because you’ll have virtually no control over your freelancer and their work, and your freelancer will have minimal accountability over your project. Therefore, it’s important to weigh the risks and choose this route only when your project isn’t too critical and doesn’t have to meet aggressive deadlines.

To maximize the result of your work when hiring freelancers, it’s important to impose your own measures to ensure that your freelancer shares some accountability and takes responsibility for their work. Moreover, some freelancers may be working on multiple projects at the same time, and it would help if you ask about his/her other projects so you can gauge how available your freelancer would be. This will give you some idea on how much time your freelancer can put into your work and how likely it is for your freelancer to get delayed due to commitments to other projects. Moreover, it’s very important to maintain regular communication with your freelancer, as this will help you stay on the same page and avoid misunderstandings that may have some serious impact on your project.

Project-Based Outsourcing

Project-based outsourcing involves delegating your entire project to a third party company that will work on your project from start to finish. The process usually entails first talking with one or more outsourcing companies and explaining your requirement specifications and business needs with them. Then, the outsourcing companies will come up with a proposal on how to go about the project, and this will likely include a timeline and cost estimates, as well as details on their solution, design, and architecture. Once you’re able to select your outsourcing partner, you’ll then have to begin diving into greater detail about your project, and oftentimes this involves you talking with a business analyst who will elicit your requirements in full details. Your outsourcing partner will then begin breaking down your requirements into workable tasks and allocate resources for each, and you’ll often be able to collaborate with a project manager to monitor the status of the project. You’ll also have to agree on payment schemes and contracts with your project manager before they embark on your project.

Going the route of project-based outsourcing is ideal when you have a fully-formed idea of your project with all the details set in stone. Oftentimes, this option is effective in such scenarios because your outsourcing partner will be able to offer you a concrete solution to your problem and give you details. Also, it’s effective in such cases because project-based outsourcing takes a lot of the management work off your hands, so you’ll be having minimal control over the low-level details of your project and the profiles of your individual project resources. It’s also a good route when you have a bigger budget for your project, as you’ll have to be prepared to pay more for services such as business analysis and project management.

In order to maximize the effectivity of project-based outsourcing, one thing you have to remember is that you should have a clear and well-defined goal in mind. It’s not recommended to start outsourcing your project when you still have a cloudy idea of what you want to be done. You may also request to play a part in the selection process of the resources who’ll be working on your project so you’ll be more assured that you have the right talents working on your project. Moreover, it’s important to insist on documentation, as the project will be done with minimal involvement on your part, so you’ll need documentation to serve as your reference on the various parts of the project. Also, it’s helpful to include in your negotiations the support and warranty arrangements after your project is complete so you won’t be left hanging when issues arise once the project has been turned over to you.

Distributed Dedicated Teams and Outstaffing Services

With the outstaffing model, a legal agreement is made and a service provider is to handle everything while you get the full control over the processes, ownership over the product and continuous communication with feedbacks. Typically, to start hiring, you choose and contact a dedicated teams provider to inform who you need to hire along with your requirements and expectations. They will then give you a pool of verified candidates that match your criteria, and you can do an interview and screening process to select the ones you like the most. It makes even more sense if you take into account that IT outstaffing companies are located in countries with the biggest concentration of tech talent and the lowest salary rates.

What’s different about this solution is that unlike with in-house employees, there will be much fewer things to worry about. For instance, you won’t have to worry about things like office space, hardware and software, because these will all be covered by your offshoring partner. Moreover, you won’t have to worry about paying taxes and other fees as well as government-mandated benefits to your employees as these will all be taken care of too. Instead, you’ll be paying your service provider a fixed rate for each employee you use. Thus, you get the pure remote resources on a full-time job position strictly on your project who report directly to you, but work from the office premises of the service provider that obligated to manage the workflow, stick to your idea and vision and keep you updated. They will, therefore, be working similar to an in-house employee, because they will have scheduled working hours when working on whatever task you give them. This gives you the freedom of scalability because you can add or remove resources from your dedicated team as your project requirements change, giving you more room and cost effectivity.

Hiring a dedicated offshore team is best for those with medium to large projects whose requirements aren’t necessarily set in stone but can change and evolve as the project progresses. As long as you’ll be able to give tasks to your dedicated resources, this option will prove effective. It’s also good for projects that you want to have control over, as this option grants you full control over your employees and their work. Also, it’s great for those who want to save on budget and maximize cost effectivity while retaining the reliability of an in-house employee, as hiring dedicated offshore employees tends to be both very affordable and highly reliable. Your offshore partner will be accountable for any misconduct or improper behavior that your dedicated team members may show.

In order to maximize the benefits of offshoring, here are some things to remember. First, you’ll have to pick your offshoring partner wisely. Among the things to consider here are location, language, and cost of living of the country. It’s best to begin recruiting top tech talent from a country that’s relatively near you so that time zone differences will be minimal. Moreover, since communication plays a crucial role in this model, you’ll have to make sure that you and your dedicated resources will be able to speak a common language. Moreover, to allow you to maximize your savings, it’ll be best if you go about filling the position with someone from a country with a low cost of living, as this also means lower cost for their employees. You’ll also do well by having a concrete means of communication and collaboration with your team members, and by assigning at least one in-house employee to collaborate and manage your dedicated teams in case you’re not always available.

Conclusion

With the rise of information technology, the IT industry is on the rise, and this is matched by an equally rapid growth in the demand for IT professionals. With so many businesses looking for IT talents in different areas, the competition for skilled and qualified IT workers is becoming stiffer. This has led to IT skills shortage in many countries. As such, it becomes highly beneficial to explore the wide range of options for hiring IT professionals other than the traditional in-house hiring method.

We’ve taken a look different methods of remotely hiring IT professionals. Hiring freelance workers is very cheap, but can be risky due to lack of control, so it’s best for small and low-risk projects. Project-based outsourcing is good for large projects whose requirements are complete and set in stone, but it can be quite expensive. Hiring dedicated offshore teams gives you the perfect balance of affordability, control, and reliability, and is perfect for medium to large projects that may change and evolve as you go along.

Whatever option you choose, make sure to follow the tips and best practices that we’ve provided to ensure that you get the most out of the hiring method you chose. Good luck and happy hiring!

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