Nearshore Americas

Breakdown: Hiring Engineers Directly Gains More Momentum

Data expertise is amongst the most in-demand tech skills in the market today. In spite of the many options available for hiring engineers globally –from freelancing and EOR arrangements, to the use of staffing agencies and tech consultancies– companies remain partial to the traditional route: hiring directly.

The data: 51% of executives surveyed in the latest edition of Nash Squared’s Digital Leadership Report stated that they expect to hire data engineers directly over the next twelve months. Of the more than 2,100 digital leaders surveyed, 28% said they’ll outsource and 24% will use more “indirect” hiring methods (consultants and contractors).

  • Of the most in-demand tech skills, data saw the highest preference for direct hires. For cybersecurity, preference for direct hiring reached 39%; for software development, it was 42%.
  • 71% of the surveyed say they prefer to hire directly when it comes to tech talent in general. The larger organizations (with tech budgets of over US$250 million) have a lower preference (65%) for direct tech hires.

Close to the chest: Given the importance of proper data collection, classification and storage for matters of business value and regulatory compliance, organizations would rather have an in-house data expert instead of an outsourced or freelance one.  

Bang for buck: Cloud, big data/analytics and AI/ML were identified as the three technologies that generated the most ROI over the past three years.  

  • Cloud saw the largest levels of deployments amongst organizations, with 92% saying they had implemented it in either small or large scale as of the time of the survey.
  • Big data followed with 61% of either small or large scale deployment.
  • In spite of its relatively small levels of implementation (28% small or large scale deployment), AI/ML was identified as a top three ROI tech.

MVPs: Data engineers are the architects and builders of systems for the massive collection, storage and analysis of data. In an age where data science is used by businesses to generate valuable insights, develop powerful solutions and set the building blocks for other transformational technologies –like AI–, it’s no surprise that data engineers are so highly sought after.

Thirsting for skills: Data engineering was regarded as the skill with the most severe shortage of talent, followed by enterprise architecture, technical architecture and software engineering.

  • 54% of respondents reported talent shortages, down from 70% in the previous year.

High hopes: 45% of the surveyed by Nash Squared said they expect increases to their organizations’ tech budget this year. 

  • They expect, on average, a 10% increase.
  • 50% of respondents expect to see headcount increases this year too.

NSAM’s Take: Although the term feels unfashionable today, we still live in the age of “Big Data”. Massive data management and analytics has proven itself over the past three-to-five years as a highly valuable investment for companies, whether it is used for internal purposes or as part of organizations’ portfolio of products and solutions.

The crucial role that data plays in the proper development of AI/ML technology will turn data engineering into an even more valued skill. Most organizations are still in a phase of small-scale deployment, piloting or even planification when it comes to AI. However, if Nash Squared’s survey is to be believed, the technology is already showing promising ROI numbers.

Talent shortages are nothing new in IT. However, the large amounts of hype around AI will allow us to see how far organizations are willing to go to get the skills necessary to achieve their transformational and revenue goals for the next couple years. Engineers in general are already scrambling to be the experts the market needs, and data scientists find themselves amongst the top-paid workers in the field.

Such high levels of scarcity might represent an opportunity for offshore and nearshore territories seeking to carve themselves a highly lucrative niche in the market. Chile is very well-regarded among IT sourcing professionals in need of tech workers experienced in high-skill or niche technologies. Nevertheless, the country is not built-up for scale. For the moment, Brazil and (to a lesser extent) Mexico are more popular options due to the sheer size of their market-ready talent pools and the potential of their large populations.

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We wonder if, pressured by the increasing need for talent, organizations shopping for skills in offshore or nearshore territories will opt for other arrangements besides direct hiring. Staffing agencies, EOR firms and freelancing platforms offer an easier avenue for foreign companies hiring from abroad, lightening the burdens of red tape and regulatory hoops which can be quite the nightmare for any organization without a presence in the territory.

But even then, businesses seem to be growing partial to having talent in-house when it comes to more complex technologies which are now part of their “core” business operations. As we’ve reported before, EOR and freelance platforms are sometimes used as ways to take developers and engineers for a “test run.”

One thing’s for certain: the current scarcity of data engineers and other high-skill tech talents can potentially lead to a true globalization of the IT job market. Locations which were regarded as good sourcing spots for low and mid-level developers have a chance to mature and build up their reputations as generators not only of affordable labor, but of knowledge and innovation urgently needed by the market.

Cesar Cantu

Cesar is the Managing Editor of Nearshore Americas. He's a journalist based in Mexico City, with experience covering foreign trade policy, agribusiness and the food industry in Mexico and Latin America.

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