Excuse: IT skills shortage in SMEs – Every company can win over talent

Experts interview
Martin Bernard
Founder of Tribe.xyz

The staffing agency specializes in connecting top recruiters and sourcers with companies in urgent need of personnel. The HR experts they place work as in-house temporary employees, allowing them to more accurately understand the companies' requirements and find suitable candidates more quickly.

Janet Klin
Director HR & Talent Management of FLEX Capital

FLEX Capital is a private equity fund founded by successful serial entrepreneurs. The fund invests in profitable and growing companies within the German internet and software mid-market.

It’s a persistent issue: the IT skills shortage. What can companies do to become more attractive to IT specialists? How can they find tech talents faster and more cost-effectively? In an interview, Janet Klin, Director of HR and Talent Management at FLEX, and Martin Bernard, CEO of the personnel service provider Tribe.xyz, share their best practices. They are convinced that those who make an effort and take a professional approach have no problem attracting tech talents.

What do you see as the biggest challenges currently facing companies looking for IT professionals?

Martin Bernard (MB): The challenges today are the same as they were a few years ago. There is intense competition for talent. Therefore, companies need to be fast in their recruitment processes, or else the competition will snatch candidates away from them. Ideally, they should proactively approach candidates rather than waiting for applications.

From your perspective, what are common mistakes that companies make in recruiting?

Martin Bernard (MB): Many companies underestimate the effort required. We often see cases where internal IT professionals take on the sourcing and reach out to contacts within their network. While involving employees in sourcing can be beneficial, it should be done in moderation. If the highly paid IT specialist’s work hours are predominantly spent on recruiting, it can be a waste of resources.

Another mistake is a lack of alignment on the desired profile. We search for specialists for six months, present the candidate to the company, and only after the final interview do supervisors become involved and veto the choice because they disagree with the profile. To avoid unnecessary costs, all stakeholders should align their requirements from the beginning. Scorecards can be helpful in this regard.

What companies often underestimate from my experience is the importance of an internal recruiting team.

Janet Klin (JK): I agree with Martin. What companies often underestimate from my experience is the importance of an internal recruiting team. Many are not willing to create a full-time position for a recruiter. They want to save costs, but an internal recruiter is often more cost-effective than external support. Many companies also lack knowledge of where IT professionals look for job opportunities. They post on general job portals and wonder why they aren’t getting results. Many tech talents don’t actively search for job listings; you have to approach them proactively.

Another issue is response time: companies need to be fast. Reaching out to candidates through social networks is good, but it won’t help if companies take days to respond to messages. During that time, the candidate could have already advanced to the final interview round with a competitor.

40 to 50 percent of hires could come through active sourcing if done right.

You mentioned active sourcing. What role does it play in the search for IT specialists?

Martin Bernard (MB): There was a recent study by researchers from California. They examined the sources of new hires, and their findings align with my observations. According to the study, companies should source one-third of their candidates through active sourcing, one-third through applications, and one-third through referrals. From my perspective, active sourcing is essential. I would even say that 40 to 50 percent of hires could come through active sourcing if done correctly.

Data and facts

IT skills shortage in Germany

  • 86,000 IT jobs in Germany were unfilled at the end of 2020, according to Bitkom.
  • 70 percent of the companies surveyed by Bitkom are currently looking for IT specialists.
  • 60 percent assume that the shortage of qualified IT specialists will continue to worsen in the future and that recruiting will become even more difficult.

IT skills shortage in Austria

  • According to the Infrastructure Report 2021 of the Future Business Austria initiative, almost 60 percent of Austrian managers see a shortage of IT specialists.
  • Over 90 percent are demanding political measures that make it easier for companies to find and retain candidates. There is a growing call for government support for research and development efforts related to digitization in companies, as well as for the promotion of IT skills training. This is because all previous measures seem to have not yielded sufficient success.

IT skills shortage in Switzerland

  • Despite the country not being known for a shortage of skilled workers, there are also fewer IT specialists available here than needed. A study by ICT-Berufsbildung Schweiz predicts that the situation will worsen in the future.

How to do it right?

Martin Bernard (MB): It depends on the staffing needs. It’s always a good idea to engage a recruiter. If you’re looking to build a larger team, working with recruiters and sourcers is advisable. Sourcers search for candidates on relevant platforms, reach out to them, and generate leads for the funnel. The recruiter then screens the pre-selection and manages the subsequent interview and selection process. Regarding tools, I consider LinkedIn to be the most crucial channel. This is where most companies start.

Janet Klin (MB):Active sourcing is, in my view, the foundation when you’re looking for IT professionals. It can make up to 60 to 70 percent of your recruiting efforts. I agree with Martin that LinkedIn is the most important and straightforward channel. In addition to that, there are industry-specific job portals like StackOverflow. Many excellent candidates apply for positions through these portals. Once you’ve built a strong tech team, you can establish a referral program and incentivize team members to promote job openings through their LinkedIn profiles. But active sourcing is always the basis and the key in tech recruiting.

Another issue is response time: companies need to be quick. Reaching out to candidates through social networks is good, but it’s not effective if companies take days to respond to messages. During that time, the candidate may have already advanced to the final stages of the application process with a competitor.

Many HR professionals say they don’t have enough time for active sourcing (…). In good weeks, I send more than 500 messages per week – as Head of HR.

How much time should you invest in active sourcing?

Martin Bernard (MB): It’s less about the time and more about the contacts you reach out to. We encounter many companies that claim to be doing active sourcing, and when we ask how many contacts they reached out to in a week, we hear: five. That’s too few. You need to invest several hours every day.

Janet Klin (JK): Many HR professionals say they don’t have enough time for active sourcing, but it helps to block off dedicated time slots in your calendar. That way, you can achieve different results. In good weeks, I’ve sent more than 500 messages per week – as a Head of HR. So, I had plenty of other responsibilities but still managed it. At least 50 messages should be possible for everyone each week when searching in the German-speaking region. If you’re looking internationally, you should be able to do even more.

Do you have any tips, specifically for active sourcing on LinkedIn?

Martin Bernard (MB): One should create a clear candidate profile to know which individuals they are looking for. Additionally, having a template for the initial contact that can be customized can significantly speed up the process. And as a final tip: always follow up. It’s quite possible that candidates may read your message during their lunch break but forget to respond. Sending a follow-up message two or three days later can significantly increase response rates.

Janet Klin (JK):It’s important to filter the search correctly to only reach out to candidates who possess the necessary skills. Otherwise, it may come across as unprofessional and harm the reputation of your own company. You can gradually expand the search later, but it’s best to start with a focused approach.

3 Mistakes Almost All Midsize Companies Make When Hiring IT Professionals

  • They do not practice professional active sourcing.
  • There is a lack of agreement on the candidate profile.
  • There is a lack of willingness to invest.

What do you think of traditional job postings? Do they still play a role in the IT sector?

Martin Bernard (MB): They still play an important role because they are also needed for active sourcing. You should include them in the first or the first follow-up message. Besides that, you can still attract great candidates through job postings. The biggest challenge here is that candidates often apply to multiple companies simultaneously, so you need to react quickly and effectively sell your own company.

Janet Klin (JK): Job postings can work well, in my opinion, when you publish them on industry-specific platforms like StackOverflow or GitHub, as I mentioned earlier. Posting them only on your own website may not be very effective unless your company is well-known and candidates proactively visit the website to apply for open positions.

Martin Bernard (MB): That’s interesting. We have hardly used these platforms for the past two years. However, for larger companies where employer branding is important, we still recommend them. In this case, it’s worth considering providers like Join, where you can create job ads once and then automatically post them on various platforms.

When should companies look for skilled workers from abroad? When is searching in the local market sufficient?

Martin Bernard (MB):If it’s important for IT professionals to have a similar background, companies should start by looking locally and then expand their search nationally. Bringing someone from abroad can be more complex, especially when offering relocation support, which might not be worthwhile for smaller businesses. However, if you have several positions to fill or are seeking specialized skills, the national market may be too limited. Nevertheless, it’s advisable to begin the search nationally before expanding the scope.

Janet Klin (JK): We’ve always had a very international approach because we aim to find the best talent in the market. For relocation, you can seek assistance from agencies that handle visa formalities. This typically costs around 400-500 Euros per case but is worthwhile as they manage the entire process. However, whether to conduct an international search or not is ultimately a decision that depends on the company’s strategy and needs.

In which countries is it currently particularly worthwhile looking for IT talent?

Martin Bernard (MB): It’s difficult to pinpoint specific countries as it depends on the company’s specific requirements. However, some interesting countries for IT talent recruitment could include Spain, Portugal, France, and Brazil. It’s worth noting that recruiting IT professionals in Eastern Europe has become more challenging, likely due to rising salaries and the presence of favorable tax environments in some of those countries in recent years.

Janet Klin (JK): The choice of location can also depend on the specific tech stack used by the company. If the company uses a modern tech stack, recruiting from Eastern Europe, Russia, parts of Asia, South America, and other regions can yield positive results. Locations like Canada and Silicon Valley have strong talent pools, but salaries, especially in the USA, tend to be higher.

7 steps with which every medium-sized company can find suitable specialists

  • Active Sourcing: The Method Makes the Difference
  • Job postings: The right online: Choose job boards
  • Harnessing the potential of talent pools
  • Employer branding: the basis for creative personnel marketing
  • Referral Programs: Indicator of employee satisfaction
  • Recruit IT talent from abroad
  • Retain IT professionals, reduce staffing needs

Let’s say you find a handful of promising candidates. Is it worthwhile to maintain a talent pool to stay in touch with candidates who decline or are only second choice?

Martin Bernard (MB): There are only a few companies that have implemented a talent pool effectively. Zalando and Wayfair use their pools intensively. Many companies just collect data and never search through it again. That doesn’t help. For companies that hire regularly, a talent pool is worthwhile if they keep the data up to date and stay in touch with candidates, for example, through newsletters. When you can search a talent pool based on various criteria, it can significantly shorten many recruiting processes.

Janet Klin (JK): I agree. A talent pool can be valuable, but only if you maintain it. Otherwise, the data becomes outdated quickly, especially in the tech field where everything moves very fast. It’s better to have a small pool of high-quality talents than a huge database of candidates who are no longer interested.

Referral programs can be integrated well into the onboarding process. HR professionals can ask new employees if they know anyone who is also interested in joining the company.

Earlier, referral programs were briefly mentioned. How important are they in the recruiting mix, and what matters in their design?

Martin Bernard (MB):In any case, job postings should be displayed internally in meeting rooms and common areas. This way, employees are reminded that the company is hiring and that they could make referrals. Referral programs can also be integrated into onboarding. HR professionals ask new employees if they know anyone interested in joining the company. They often go through their LinkedIn contacts together. Additionally, it helps to introduce a reward system. I’ve seen everything from 500 to 10,000 euros as a reward for each hired candidate. However, it doesn’t have to be large sums.

Janet Klin (JK): Referral programs are always successful when employees enjoy working for a company. They then recommend jobs to their friends because they want to work with great people themselves. The leads of each department should continuously motivate their team to look for suitable candidates in their network and reach out to them or post job ads on LinkedIn.

What role does employer branding play in recruiting success?

Janet Klin (JK): Employer branding should be considered at every step of the recruiting process. It starts with the formulation of job advertisements and outreach messages on LinkedIn. If there are spelling or grammar errors in them, it doesn’t reflect well on the company. The careers page should be regularly maintained and convey the company’s values and culture to candidates. Videos can also be very effective, where employees share their everyday work experiences. And, of course, having a presence on platforms like StackOverflow or Kununu contributes to employer branding. HR professionals should actively ask employees to post positive reviews on such platforms.

Martin Bernard (MB): Yes, videos are very effective, especially in reach-outs. Conversions are significantly higher when you incorporate videos. For companies with a solid audience, a blog can be just as effective. However, the posts need to have a certain length and be of high quality. And I agree, positive reviews on employer review platforms like Glassdoor or Kununu are important. Company profiles appear in the second or third position in Google search results. Leaving negative reviews uncommented risks discouraging promising candidates from applying. Conversely, attractive company profiles with many positive reviews can motivate undecided candidates to get in touch.

How to find your suitable candidate

  • Take care of a competent HR department and invest (also) in internal recruiting (team, tools, etc.)
  • Create a briefing sheet for each position and be upfront about who and what exactly you are looking for.
  • Proactively reach out to your desired candidates both domestically and globally. Don’t forget to respond promptly and follow up!
  • Craft your message in active sourcing to be engaging and personalized. Especially in the tech sector, it’s crucial to stand out from the crowd.
  • Create an Employee Referral Program to encourage your talents to bring more talents into the company.
  • Less is more – choose the right job portals for your position and post attractive and tailored job ads.
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