Offshoring: Europe’s digital skills gap and why companies need to outsource

A global talent survey in 2018 showcased an existing shortage of skilled workers around the world, with multiple companies across Europe from the U.K. to Germany reporting varying levels of difficulty in finding and recruiting their ideal employees. Right now, European companies face a potential loss of $1.32 trillion in 2030 due to talent shortages, indicating an urgent need to outsource business processes.

Information Technology is one of the most vulnerable industries in Europe today, with numerous reports showing a large digital skills gap that companies are struggling to fill. Today, we’ll discuss why offshoring to the Philippines can be a pivotal move for your organization, given Europe’s troubles online.

 

Why European companies need to outsource digitally skilled talent

According to EY Global’s 2018 survey “Build a Better Working Europe,” European companies are struggling to find and retain employees with digital capabilities. Out of 200 HR professionals surveyed across Europe, 48% have stated that their companies lacked cybersecurity, artificial intelligence, and robotics skills.

ICT Specialists Europe

Info taken from: ec.europa.eu

 

In addition, the European Commission held a conference and released statistics saying that 44% of Europe’s adult population had low-level to no digital skills at all. In the same conference, it was also revealed that 37% of the European workforce lack basic digital skills.

While European governments have initiatives to address these skills shortages, such as France giving away 800 francs a year to help employees invest in professional development, and the U.K. planning to set aside a billion dollars to address their skills shortage, an immediate solution is needed to address company vacancies.

This is where outsourcing to the Philippines comes in. Philippine talent are easily employed via Staff Leasing, and provides a practical alternative to in-house, marginally more expensive talent.

Staff leasing as the new outsourcing

KMC private office-1-1

While full outsourcing is still an option for European companies, Staff Leasing in the Philippines is a much better option because it provides clients with several benefits absent from the full outsourcing model.

The first advantage of Staff Leasing over traditional outsourcing models is the level of control clients exercise over the leased employee. Staff Leasing allows clients to be part of the interview and screening process for candidates, in contrast to traditional outsourcing options where incumbent employees are assigned to clients.

Another difference is cost. While outsourcing to the Philippines is already a cost-efficient business move, Staff Leasing further gives clients opportunities to save because the planning and execution of this offshoring method are faster than that of traditional outsourcing.

Affordable talent costs

Speaking of cost-efficiency, Philippine talent is affordable throughout multiple industries, the IT sector being one of them. For example, the average salary for Web Developers in the UK is 24,975 pounds (USD $32,235.36) while in the Philippines, they make PHP 274,520.86 ($5,243) which is remarkably cheaper.

Across the board, IT and computer science-related positions in the Philippines all post lower talent costs compared to European countries like the U.K. and Germany. For context, we took 3 different IT positions from the U.K., Germany, and Spain and compared the salary costs vs. the Philippines.

Europe Salary Chart

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Overall, Staff Leasing to the Philippines is the most effective move for European businesses that require world-class IT talent. This is the quickest and most practical solution as European companies and governments develop and use digital upskilling programs to improve worker capacities.

KMC is one of the pioneers and most trusted Staff Leasing providers in the Philippines, handling some of the worlds biggest brands across multiple industries including Information Technology. For more information on our service, get in touch with us through the button below.

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