Shortly after the crisis began, rumors began to spread that it would be easier to recruit developers in the domestic market. But what has become of this rumor so far?
Until the crisis, it was clear that the market for recruiting developers was clearly overheated. The success stories of IT companies, the good business environment, and the recruitment feaver of successful start-ups created a situation where supply clearly fell short of demand.
It took an average of 2-6 months to recruit a developer and salary demands kept increasing. However, after the outbreak of the coronavirus, recruiting companies hoped that developers could finally be recruited under normal conditions. Maybe even at a lower cost.
There were good theoretical preconditions for the normalization of the recruiters’ market. It was clear that many companies stopped investing in new IT projects and recruitment also dissolved. IT companies are likely to be forced to downsize due to declining demand.
One could also assume that start-ups that were unable to raise money before the crisis will not be able to maintain their teams for an extended period, and many aspiring talents would re-enter the market.
Having spoken to several top recruiters last week, it does not seem that such a scenario has become a reality. On the one hand, there are companies hoping to recruit, but job vacancies do not receive significantly more offers, let alone anyone remarkable. Perhaps not enough time has come to pass for the changes to apply?
A good developer is worth keeping. Everyone knows that. Would the companies get rid of them in case of a crisis? Definitely not.
Even as orders fall, the best developers will not be let go. We also keep in our teams primarily those with whom we have worked together for years and on whom we can also rely on bringing the company out of the crisis. We also try to keep other developers by investing the previous margin in the company’s own projects or by slightly reducing the salary.
When all else fails, those who create less added value, do not fit in with the team or have been hired with a high salary during the boom, must go first.
Thus, it seems quite unlikely that a large number of top developers will move in the labor market. The next few months will show whether I’m wrong or not.
What happens if the crisis lasts longer than we think? Another half a year? A year? Even longer? High recruitment can lead to high redundancy costs and the flexibility needed by both start-ups and mature companies will be lost if costs are reduced.
To maintain flexibility in cost management and scaling up the development team is to use 30-50% of development in the form of a service e. Perhaps hired developers from neighboring countries (Poland, Ukraine, Romania, etc.).
Firstly, buying a service from these markets is much cheaper than buying from a local market and, at the moment, even cheaper than hiring locally in the Nordics or UK, US & Germany.
Furthermore, the availability of developers in neighboring markets is much better and it takes much less time to build a team. Finally, the entire team can be contracted quickly without special costs if there is an urgent need to save costs.
Start-ups know that meeting a new round of funding can be delayed, and if costs are not slashed, a good company can expect a sudden death or dilution of founders.
The redundancy of existing developers would also reduce loyalty among other employees and send a very interesting message to the labor market, which would make further recruitment even more difficult.
However, the use of external developers is gaining in importance during a crisis. The profitability remains, but the flexibility that this form of work allows is currently invaluable.
We created one simple calculator for every company manager to calculate how much he or she would save (and extend the runway) if they replaced even part of their development team with, for example, qualified and experienced Polish developers.
Even Estonian companies can discover that the savings amount to hundreds of thousands to a few million a year, depending on the size and price level of the development team.
