If the market for software engineering talent in 2022 was hot, things were somewhat chillier in 2023, as interest rates soared and many companies cut back on headcount and froze hiring.

This shift has created a strange paradox, according to John Lynes, managing director at recruitment specialists Ashdown Group. While companies have largely reined in hiring, or even laid people off, there is still a tech skills shortage. “I wouldn't want to set the scene that there's a glut of software developers out there,” says Lynes. “There's just not a great deal of hiring.”

This leaves engineering managers caught in the middle, tasked with keeping things moving with either the same or less headcount. In this new economic reality, being able to flex in engineering capacity is vital to keep things on track. Here are your options.

Hiring contractors

For many team leaders, the first response may be to get some contractors on board, either by opening their own contacts book, or turning to a specialist recruiter. Lynes says that while 2023 was flat for permanent hires, he saw an uptick in contractor hiring at the end of last year. 

Carefully chosen contractors or independent suppliers should bring specific, quantifiable skills, need minimal onboarding, and be able to hit the ground running. If they don’t work out, or the project or budget changes, offboarding should be as straightforward as onboarding.

Rob Allen, an independent API consultant, says if your starting point is a “fairly good” agile team of six people, and you simply want to increase the velocity, then hiring one or two contractors “to make that team bigger and deliver within the current working structure would work.” 

He recommends avoiding third party intermediaries and directly contracting with staff to minimize the chance of any conflicts of interest. “If I'm going through a third party service, then the person who’s coming into me has got two bosses,” he says.

Recruiting contractors is best steered by the engineering manager, rather than having talent or HR professionals get too involved. “The hiring managers will know exactly what they’re looking for,” says Alex Gerritsen, managing director of global search and recruitment firm, Keller West.

The hiring manager should precisely detail what the scope of the task is and what they will want the incoming developer to achieve. They should also clearly agree how communication will happen, especially for remote contractor roles. 

Outsourcing

While contractors can bring specific skills, sometimes an organization needs a more substantial boost. This could be delivering a more complex project or transformation, breaking out a particular task that might not be a core concern, or scaling up around a particular technology or skill set.

If this is the case, a more formal outsourcing approach might be appropriate. This involves contracting a large number of engineers, or entire self-contained teams, through a dedicated outsourcing company. 

The options here range from giant global business consultancies like Deloitte or Accenture, to similarly large tech outsourcers such as Infosys or HCL. However, there are also more boutique options, such as ThoughtWorks, which focuses on agile development and transformation, while organizations like Andela and X-Team match tech leaders directly with engineering talent, often on a global basis.

Philip Antrobus, data science specialization lead at NCS Group Australia, has worked as part of outsourced teams, as well as engaging them. “I think if you’re outsourcing a team, you are looking for a separable product or function.” That might be something that isn’t your core competency, but which is still needed to deliver on overall business objectives.

Antrobus cites an engagement with an AI startup, while at a previous firm, that outsourced the ongoing development of algorithms around human vision to run in real time. “They chose to stay lean, focus on running the product backlog, selling the product and outsourcing the development of their app.”

These engagements are typically longer term and the team could be based anywhere in the world. The outsourcing firm will handle all the complexity of hiring, onboarding, and day-to-day management. 

Working with dispersed teams is much less problematic than in the past, says John Harris, CTO of GT Life Science, which supplies teams or handles projects with a network of engineers based in Eastern Europe and Turkey. 

That’s partly thanks to communication platforms such as Slack and Zoom, but also to modern development approaches such as Agile and Scrum.  “As long as you can have an hour or two for a stand up and for a review, and to do the lessons learned and the retrospectives, you don’t need to have that permanent overlap.”

Being laser focused on project scope and outcomes is a good starting point, but engineering leaders must also be clear-eyed about other potential problems with a partner.

Churn amongst the service partner’s own staff is a red flag – suppliers are also competing with the same skills shortages after all. “You need that continuity of staff to deliver on time and on budget, whether it’s outsourced or not,” says Antrobus.

It’s also important that they aren’t hamstrung by an unwieldy chain of command. “You want your business to be empowered to make decisions,” says Antrobus, “And your outsourcer to be empowered and make decisions.”

Low or no code

One option that hard-pressed engineering leaders might also consider is augmenting their teams with low/no code tools to empower non-developers with solving simpler engineering problems. This option becomes especially enticing if generative AI technology is able to truly bridge the gap and allow business users to build their own software solutions.

Antrobus is generally skeptical, but he believes such tools can be useful for specific tasks or use cases. “There's only one place where I’ve seen low code succeed really well. And that's where you've got an Excel-based process, and you're ready to switch it to a database or CRUD [create, read, update, and delete] application.”

For example, he has used the low code platform Five to build graphical frontends. “I can put the frontend I think should go on based on what the data model is, and not have to add a designer and a React developer.”

Similarly, low or no code can play a useful role in accelerating minimum viable products or prototypes, but once you need something that scales, you will have to re-engineer. 

A narrow window to get it right

When it comes to flexing engineering capacity, there are certainly options beyond taking on full time staff or engaging with a consultancy. Depending on how pressing a given problem is, you could focus your energy on reskilling existing engineers, or redeploying members of other teams. But every good leader should have the ability to flex in skills when the situation demands.

Whichever you choose, success starts with defining the project and scoping the work clearly before picking up the phone.

Currently team leaders and hiring managers are in a sweet spot, with demand for staffers comparatively flat while contractors are available, and rates are stable. But, Lynes cautions, this is likely to be a limited window. “Right now, there’s a little bit more supply, but demand is coming.” The time to flex may be now.