Talent Bottleneck Impacting Software Outsourcing in China
Software outsourcing has been a promising growth area for China’s Information Technology industry. However, at the same time, the shortage of talent and inadequate talent structures is now a major reason that has hindered the growth of the sector.
The talent shortage in the structural sector
The software and outsourcing of information services made a profit of $ 2 billion for 2006, an increase of more than 50% over the comparable prior time. In this context, businesses that are involved in outsourcing services for software are growing rapidly, emphasising the importance of recruiting talented people. Technology and talent are the main factors to getting outsourcing contracts.
In actual fact, there are numerous universities and colleges that have created courses related to software, and a lot of training establishments have been involved in this area in recent times. There was a report that it was 1.02 million software specialists in China in 2007. Why is it that software firms in China aren’t able to cope with the pressure to recruit talent?
The main reason is that in terms of graduate education, many of the classes taught at universities are not up to what is required by the business. New employees in companies are still required to go through a relevant training program before they are able to become proficient, which could cause the employer to incur time and expenses for personnel. When the process for training is contracted out to outside training institutes, the outcomes are typically disappointing. The late Mr Liu Jinran, Vice-CEO of EDS Asia, commented, “We did have some experiences working with training establishments, but some were not worth the effort. The instructors had not even touched the systems, and the teaching materials were out of date. The training programs are required to be in line with the needs of outsourcing service providers. Training should be linked to the evolution and growth of market and industry, not taking a look at only a few months’ worths of tuition costs”.
A further reason could be that even though there are plenty of professionals in the field of software, experts with a high level remain scarce in China. In a recent interview, Mr Xu Chengjun, an IT director at the China Development Bank, revealed that when the Bank was outsourcing software projects to outside firms, they discovered that there were Chinese outsourcing companies, there was “lack expert experts”, “expensive experts”, “long process needed to cultivate expert experts” and “expert easily switching jobs”. Also, it is quite common that the top software talent is attracted by high-paying multinational companies in China. Some have stated that foreign companies don’t just will take your business contracts. However, they also take away your talent.
Exploring new training models
In recent years, the need to establish a talent-matching and training system has become a major goal of all of the Chinese government, business and educational institutions. In the past, China’s Ministry of Information Industry of China was involved in national-scale IT capabilities and outsourcing projects to develop talent, like outsourcing training project that is jointly run through MII and NEC.
The Ministry of Commerce of China has launched an outsourcing professional training program in the year 2006, which offers funds to assist students in universities to gain additional outsourcing abilities and expertise and encourages outsourcing companies to implement innovative training procedures. The goal of the program is to create 300,000 to 400,000 experts to perform outsourcing work and create between 200,000 and 300,000 jobs for graduates of universities over the next five years. The hope is that this program will be able to reduce both the outsourcing skill shortage and graduates’ employment issues.
Businesses are also looking at new methods of learning. For instance, Beyondsoft, a leading software outsourcing service for international clients, has been using the apprenticeship system to bridge the gaps left by traditional course-based training models. Its results are successful; however, it can be costly, lengthy and slow. But the director of human resources at Beyondsoft, Mr Yao Shuang, thought that basing his decision on the principles for corporate learning, “Tutors can first educate apprentices within their area, and then apprentices can transfer their knowledge to different departments, making it the largest-scale training system.”
Additionally, experts have suggested that China’s talent in software development needs to be re-professionalised. This idea has been acknowledged by the China Software Industry Association (CSIA) and industry participants. In the early part of the year, 2008 CSIA started its process improvement talent initiative, which was attended by a variety of software firms to investigate new training methods. The project focuses on the field of improving the software process that has become an important aspect in companies that have won outsourcing contracts. The project targets areas with the highest talent shortages like software testing and evaluation and defect management.
The purpose of this initiative is to create an improvement in the improving the efficiency of software processes at an organizational level to a mix of individuals and the organisational levels. Let us consider the scenario of a Capability maturity Model(r) Integration 5 (CMMI5)-qualified enterprise. Engineers in this company can be part of the certification evaluation for MII and the other pertinent bodies through CSIA. CSIA project. If 10 engineers are who have been awarded senior certifications and an additional 10 have middle-level certifications, clients could make a decision about the company’s capabilities from both the organizational (CMMI) and individual (certification) levels. It is important to note that this CSIA initiative is a crucial test to develop China’s skilled software engineers. The project will reveal its know-how framework by June and begin pilot certification processes in July. It is anticipated to offer significant amounts of practitioners training and certifications in the years 2009 and 2012.