Can Government Digital Projects Compete for Talent In a Developer Shortage?

A digital skills shortage, and lack of skilled developers is the number-one issue for Canadian businesses.

This is a very real and significant problem, right now, the global developer talent shortage already amounts to 40,000,000 skilled workers worldwide. Can it get worse?

In a recent poll by KPMG, the digital skills shortage, and lack of skilled labour (spelled labor for our U.S. friends) is the number-one issue for Canadian businesses. Corporate giants like Amazon, Microsoft, Google, and Twitter have set up tech hubs and development shops across North America and are expanding quickly.

So, what is the challenge?

Let’s look the tech scene in Vancouver as an example. This booming technology city is now recognized as one of North America's fasted growing hubs. In fact, the third-fastest rate of growth (20.9%) among the 30 top cities. Now, let’s factor in three considerations:

  1. The average annual wage earned by a local developer in Vancouver and across Canada is $76,030 per year or $38.99 per hour. Entry-level positions start at $63,512 per year, while most experienced workers make $106,017 per year, and up.
  2. The Vancouver and British Columbia region has an estimated 9,500 tech companies now, according to the BC Tech Association.
  3. Amazon, Microsoft, Google, and Twitter are examples of companies with deep financial pockets, swooping into the local markets, recruiting directly from the 9,500 tech companies, offering salaries well above the average, and significant signing bonuses too, in some cases up to $100,000.

How are Vancouver and the British Columbia region expected to compete with this type of financial clout? Further, how can any small or medium-tech company in San Francisco, Toronto, Montreal, Austin, Seattle, or other regions complete? The simple answer is, they can’t.

And just like that, you have the tech and developer shortage we are all faced with.

Are you feeling the impact on the digital marketplace?

This scenario is unfolding in almost every region in North America. There are two significant market impacts occurring, in the private sector and within the public government area. Even traditional institutions like big Canadian bank TD are trying to recruit 2,000 technology experts this year alone.

The governments across Canada are experiencing the hit, and unfortunately, most have not wrapped their arms around the rapid changes, nor are they aligned with new emerging market costs, yet. As an example, if the government wants to award a digital services RFP at a rate of $130/hour, and a vendor needs to come in at a rate of $180/hour in order to pay their team, sustain margins and a healthy business…the model is clearly broken. Currently, the model is very broken.

The outcomes are getting a little messy

This ultimately creates an unsuccessful vendor ecosystem based on what is referred to as the "race to the bottom" on both price and quality of the outcome. Government procurement and product owners are then choosing to feed this process, resulting in failed projects that lack value and a meaningful outcome.

Why? In simple terms, the race to the bottom creates vendor scenarios with low-skilled resources being used, companies that mask offshore resources as local, and tools that leave citizens with a lack of outcome they expect and now demand.

Building ethics into design and implementation, combining code and the public good, that’s what it should be about, not the cheapest price. The challenge of the digital divide and digital equity is going to be negatively impacted in this current scenario. A significant gap will remain, between people who have and do not have access to the internet and technology tools required to access the important and critical information available online.

What is your takeaway from this post?

How can the digital community create meaningful outcomes for industry, government, and citizens in this talent shortage environment? Let’s start a conversation and make a difference, contact us.