5 Best Practices to Overcome Resourcing Challenges in the IT Industry
Research reveals that the IT industry is forecasted to grow at 104% between 2018 and 2023. ~ Statista
Due to the growing digitization and automation, this industry is set to grow manifold in the years ahead. However, this proliferation of the IT industry has also brought along myriad challenges, such as cyber-security risks, outsourcing risks, resource-related constraints, etc.
Out of these, resourcing challenges like last-minute firefighting, widening skill gaps, increased bench size, etc., form some of the most significant ones. They can cause numerous repercussions, including delays, budget overruns, client dissatisfaction, and loss of business opportunities.
Therefore, IT companies should implement appropriate strategies to combat these challenges.
This article highlights major IT resourcing challenges, elucidates the effective strategies to combat them, and how SAVIOM’s resource management software can help.
- Major Resourcing Challenges in the IT industry
As we already know, the global IT business landscape has witnessed a paradigm shift. The major reason is the emergence of advanced digital technologies, such as artificial intelligence (AI), the Internet of Things (IoT), Machine Learning (ML), big data/analytics, technical architecture, etc.
As the workforce in most IT companies is not proficient in these latest trends and technologies, it’s a no-brainer that the skill gaps in this industry are widening. In addition, as the IT industry is ever-evolving, some high-in-demand skills may become less relevant and obsolete over time. So, IT firms are finding it challenging to adapt to changing demands, prevent skill obsolescence, and future-proof their consultant pool.
Another challenge is optimizing IT consultants’ utilization levels to maintain a healthy resource index. Managers often book high-performing or critical professionals on multiple projects, resulting in overallocation, burnout, and unplanned attrition.
In addition, the difficulty in effectively managing sudden ramp-down activities results in excess consultants staying idle or benched for a long time, resulting in increased bench size and billing losses. It also lowers the engagement levels of the benched personnel, making them quit for better opportunities outside the organization.
Now that the IT resourcing challenges are clear, let’s understand the most effective ways to overcome them.
- How to Combat Resourcing Challenges in the IT Industry
As already evident, the IT industry faces several resourcing challenges. Though each firm may follow certain custom approaches, here are a few standard practices that can help combat these challenges effectively.
2.1 Foresee future skill demands and take appropriate actions
As technologies continue to evolve, it is imperative that IT managers stay abreast of pipeline projects’ demands. It helps them understand the existing skill gaps and shortages and take measures to bridge them proactively. For example, conducting suitable training/ upskilling programs help the existing workforce hone their skills and acquire new ones to take on multifaceted projects.
In cases where internal measures don’t suffice, managers can consider leveraging external measures, including generic or project-specific hiring. For example, they can hire either a permanent consultant pool for recurring demands or an on-demand workforce for one-time requirements. It will help create the right mix of contingent and permanent workforce and enhance profitability and sustainability.
2.2 Maximize productive utilization of each employee
Most IT companies fail to optimize their professionals’ utilization levels and end up allocating them to admin or BAU activities for a significant portion of the capacity. As a result, it reduces the overall billability and results in disengagement and unplanned attrition. Hence, managers should consider current and future bookings of individual employees and identify if any individual is under/overutilized.
For example, if a developer is assigned to any BAU task like data entry for around 40% of their capacity, the manager can deploy them on a billable or strategic project to leverage their skills better. To prevent overutilization, managers can either readjust the project timeline per the employee’s availability or deploy additional resources and ensure uniform workload distribution.
2.3 Manage ramp-up/ramp-down activities effectively
IT firms experience rapid changes in resource demands, resulting in ramp-up and ramp-down activities. Therefore, managers should stay abreast of project demands to identify the upcoming ramp-up activities. It helps avoid last-minute firefighting by procuring the requisite resources in advance.
Moreover, they should also keep a tab on when resources are getting rolled off from their ongoing engagements. They can then evaluate the skills of the professionals to be rolled off and book them on projects ahead of time. It helps minimize idle time and billing losses, enhance profitability, and increase client satisfaction.
2.4 Leverage suitable resource optimization techniques
Managers often tend to deploy high-performing consultants on multiple projects beyond their available capacity, causing overallocation. It, in turn, results in subpar performance, burnout, and unplanned attrition. So, managers should implement suitable resource optimization techniques based on the nature of the project to prevent it.
For projects with stringent timelines, they can leverage resource smoothing to procure additional professionals to get the work done within the stipulated timeline. For projects with flexible timelines, they can use resource leveling to readjust the start or end date of the project as per the availability of the professional.
2.5 Encourage employees to work on projects of their interest
While assigning projects matching the skills of the IT employees is essential, managers must also consider individuals’ interest and willingness while assigning the work periodically. For this, they can leave open positions in various projects to allow the consultants who match requirements in terms of skills or qualifications show interest.
When IT professionals get work that aligns with their interest in addition to their skill sets and competencies, it enhances their engagement. Moreover, it also increases their level of commitment, dedication, and accountability, improving overall performance and productivity. It further makes them feel valued and empowered, reduces the monotony of the job, and reduces unplanned attrition.
Given the best practices to combat resourcing challenges, the following section highlights how resource management software can help.
- How can resource management software help?
A resource management solution helps overcome resourcing challenges in the IT industry as it provides advanced functionalities as follows.
- Unified visibility into IT consultants’ profiles combined with advanced filters, including skills, competency level, location, etc., expedites the search for the best-fit available professionals for each project.
- Capacity-vs-demand report helps managers foresee consultant demands, identify skill gaps, and fill them proactively to future-proof the workforce against market volatility and resource constraints.
- A centralized view of consultants’ current and future allocations helps identify the professionals booked on non-billable work, mobilize them to appropriate strategic/billable tasks, and maximize productive utilization.
- Utilization reports facilitate real-time tracking of individual consultants’ utilization levels and initiate suitable optimization techniques to ensure uniform workload distribution.
- People-on-the-bench reports help identify the professionals on the bench or are about to hit it soon and deploy them to suitable vacancies ahead of time.
- The Open Seat functionality empowers resource managers to publish open positions and select suitable candidates with matching skill sets who show interest and apply for them. It will help make consultants feel valued and motivate them to work on multi-faceted projects and diversify their portfolios.
Information is at the core of how you do your business and how your business model itself evolves. ~ Satya Nadella
One of the key aspects involved in ensuring an IT firm’s sustainability and profitability is overcoming resourcing challenges. One can always follow the best strategies mentioned above and implement a resource management solution to overcome them and ensure success.