As the talent crisis intensifies in the global IT services industry, the need for a viable, sustainable solution becomes greater by the day. Either the industry works to fix the issue, or it suffers inevitable loss of contracts, increased costs for clients, and disheartened students with no motivation to join the industry.
Few people in our industry have bilateral experience on the client-vendor fence, even less so holding executive-level positions on both sides of the relationship. One such individual is Fabio Bittencourt Daniel, a veteran IT executive whose career has taken him from CIO at Transportación Marítima Mexicana (TMM Group), to CEO at Softtek for Mexico and Central America, and VP/Head of LatAm at Wipro. These high-level positions have enabled Daniel to amass unique insight into the region’s very well-documented talent crisis, something which he has taken a deep personal interest in.
Cracks in Latin America’s Talent Model
“In Latin America, the talent generation model is not delivering what the market needs; demand is growing much faster than the market is able to generate talent,” he said. “The talent crisis is actually a global issue, but is far more noticeable in this region. If we want Latin America to have a fair stake in the global IT market, we need to change that.” Daniel argues that the methods used by both industry and academia to develop sufficient IT human resources are inherently flawed.
But how exactly is it flawed? Where are the cracks in the system that are leading to this negative trend in the industry? Daniel attributes it to the lack of preparation students receive before they leave university. “In Latin America, you’d be lucky to find 7-10% of IT talent that can speak good English,” he explained. “There is not enough language preparation; people need English skills if they want be in the global market.”
Aside from language, Daniel has noticed that the number of IT graduates is actually dropping in the region, not because of lack of available work, but because they lack the necessary skills and experience restrict their abilities to secure jobs upon graduation. “Often times, students are working in non-IT-related roles alongside their studies, which is actually hurting their future opportunities,” he explained. “What they should be doing is looking for IT-related work experience to complement their studies.”
The vicious cycle continues: many talented individuals in the region cannot afford to pay for education, and those that can afford it get demotivated to enroll when they see how difficult it is to find employment, according to Daniel. “Not only that, but the cost structure in Latin America is absurd, compared to India or the Philippines. The whole system is flawed and is begging for a new model.”
How the Buyer Suffers
On the buyer side of his career, Daniel helped TMM Group to grow from a US$300 million company to US$1.2 billion company through the use of technology in the late nineties. “We were one of the first ones to implement SAP in Mexico, but it was a nightmare to find the people who could support it,” he said. “Even today, the problem lies in good consultants moving from one place to another and getting more expensive, mainly because there is simply not enough people.”
In this talent crisis, buy-side clients are the ones who suffer, as they end up paying more for worse resources. For example, in order to deliver a project on time, vendors have to put together an effective team in a timely, cost-effective manner. If they can’t do that, then a project is delayed before it even begins, which can lead to desperate, expensive measures.
“The struggle to source talent with precise capabilities and assign it to a project is the number-one reason why projects get delayed,” said Daniel. “This leads to desperation and companies pay whatever it takes to fix it, raising costs for the client, potentially reducing quality, and creating bad business. Then the project gets loaded with resources in order to make up for the lost time. This is not a one-off story; this is the norm in the region.”
A Vision for Solving the Crisis
Breaking away from the tried-and-tested (yet broken) systems is the only way to address this issue, something which Daniel is working on in Merida, Mexico. Daniel’s vision is for Latin America to boast IT universities that can create talent for the global market. This includes language skills, a shift in cultural perspectives, and developing more globally aligned concepts of quality.
“Culturally, Latin America accepts lateness as the norm, something which the global market does not tolerate,” he said. “The importance of quality must also be understood in this region, as quality is often seen as a burden instead of a priority. If you have quality, if you have behaviors aligned with global culture, and if you have the soft and technical skills, then you begin to have somebody who is a top-tier professional. The only thing missing is exposure; you need to place these professionals in an environment where those skills can be put into practice.”
Daniel’s concept (which he is actively putting into practice in Merida) is to develop IT-centric universities that train these necessary skills, and connect them to an IT service “megacenter” where they can apply those skills and pay for their studies from the very beginning. Still, he is aware that students have to be hungry to work in the industry and have to be malleable to expectations, which means discipline and commitment. “If they can do what is necessary, they are rewarded with the funds to pay for their studies, as well as the skills the global industry needs to address this talent crisis.”
The idea is an ambitious one: Daniel hopes to create 20 megacenters like this across the region, each with 5,000 people. If successful, the strategy could deliver 100,000 new people to the industry every year, each with the competitive abilities to succeed on a global scale. “This is how you begin to change the game,” he said. “If you inundate the market with talented, well-prepared resources, then companies will not need to snipe talent from their competitors as often, benefiting everyone.”
Daniel is personally funding his vision with the help of a business partner. While it was too soon for Daniel to reveal any more specific details, he expects the Merida center to onboard the first graduates by the start of September 2017. He’s also targeting the countries with the highest populations (Mexico, Brazil, Colombia, etc.) to be home to most of the 20 centers. If the concept works and the region embraces it, we could soon start seeing a much needed shift in the approach to talent development and perhaps an end to the talent crisis.