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Software Development Outsourcing Will Grow 70% by 2023, Commit Study Finds

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New Research Reveals How Tech Start-Ups Are Handling Talent Shortages, Team Building and The Future of Work

Outsourcing for software development at start-ups is expected to increase by 70% between 2022 and 2023, according to new research from Commit, the leading global tech services company focused on custom software and IoT solutions. Furthermore, 99% of senior technology and HR leaders today recognize the benefits of remote teams, with 3 of every 4 (75%) seeing an increase in productivity from their remote staff, a clear indication that concerns about remote teams are all but gone.

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“The increasing gap between supply and demand for developer talent, along with emerging trends like the growing gig economy, more remote work and the great resignation are driving a need and opportunity to rapidly outsource skilled talent,” said Max Nirenberg, Chief Revenue Officer and Managing Director of Commit USA. “This is especially true for startups, who now face enormous growth potential but struggle to scale quickly and efficiently.”

These are just a couple of the findings that surfaced from Commit’s ‘2022 State of Tech Staffing’ report, an in-depth research survey of 200 US senior leaders in hi-tech start-ups. The report addresses the many critical challenges and opportunities faced by tech start-ups today when staffing for success – from talent supply and demand issues to the benefits of remote work, talent sourcing and much more.

The True Cost of Staffing

The time required to recruit quality talent – as well as the seemingly inevitable turnover – carries significant hidden costs which many organizations are not prepared for, per Commit’s study. More than 68% of companies spend one month or more to recruit a single developer. At the same time, one in five (20%) new recruits must be replaced. To avoid these hidden costs, organizations need a better solution to quickly onboard quality developers.

“While finding the right skillsets is essential, it is also vital to consider the hidden costs of lengthy recruitment processes, as well as inevitable challenges like rapid turnover or new hires not working out,” said Arik Faingold, President and Chairman of Commit. “To address these obstacles, organizations need new strategies for outsourcing and tech team building that enable rapid onboarding of quality talent with reduced risk and insurance if new recruits aren’t the right fit. This applies not only to attaining developers but also tech leads and project managers as well.”

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Senior Managers Diverge on The Benefits of Outsourcing

Outsourcing tech talent is becoming an essential ingredient for success, but the benefits are perceived differently across roles and organizations. Commit found that while HR leaders see the top benefit of outsourcing as cost savings (48%), CTOs perceive outsourcing as a key to quickly scaling (42%). However, regardless of the role, the greatest concern over outsourcing talent is the quality of work (56%).

Founded in Israel in 2005, Commit has solved the challenges of work quality when outsourcing. As a global top tech R&D and software development firm, Commit offers a comprehensive range of engineering capabilities and resources to design and deliver any project on time, on budget and with superior quality. The company supports clients in a range of advanced technologies and applications for multiple industries including Fintech, Medtech, Martech, IoT, consumer goods and more.

Leveraging more than 600 multi-disciplinary experts from around the world, Commit has successfully led software development projects for more than 1,000 organizations globally. Its customers range from early-stage start-ups to international brands including IBM, Pentera, Maytronics, JFrog, Sapiens and Cisco.

The ‘2022 State of Tech Staffing’ survey polled start-ups who had received a Seed, Round A, or Round B investment round of $1M or more over the past six months and included CTOs, CEOs and leadership in HR, Recruitment or Talent, as well as VPs in R&D, Engineering or Technology.

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[To share your insights with us, please write to sghosh@martechseries.com]

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