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Solving the RPA Talent Shortage with Nearshoring

3/31/21 7:01 PM / by Diego Peña

Diego Peña

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A robot showing different RPA Talents shortage in the industry and can be solve by Nearshoring

LinkedIn’s “2020 Emerging Jobs” report dubbed robotics “an industry on fire” – and it’s a claim that’s easy to justify. With industry leader UiPath earning a staggering $35 billion valuation in February on the eve of its expected Wall Street IPO, the Age of Intelligent Automation (IA) is here – accelerated by global shifts toward remote work and the need for more operational efficiency than ever.

IA sits at the crossroads of Robotic Process Automation (RPA), artificial intelligence (AI), and workflow and cloud platforms, automating end-to-end business processes with context-aware robots.

In the race to address COVID challenges, Deloitte reports that 73% of organizations started a journey toward IA in 2020 - a 58% jump over 2019. Gartner expects to achieve automation adoption across 90% of large organizations worldwide by 2022.

U.S. enterprises face a critical technology skills gap

However, automation’s exploding demand faces an imposing obstacle: a severe tech talent shortage.

With 40% job growth, the LinkedIn report ranks robotics engineers as the second fastest-growing position in the U.S. In UiPath’s “2020 State of the RPA Developer Report,” 70% of respondents expect their company to hire more RPA developers in the next year.

But the newness of automation technology combined with the nation’s ongoing tech talent shortage makes it difficult and expensive to staff roles. Nearly 90% of IT leaders say finding skilled technology professionals is a critical challenge in their area.

Even before the pandemic accelerated digital transformation efforts, 2020 began with nearly 918,000 tech jobs unfilled in the U.S. – and millions in lost productivity, according to a Wall Street Journal report. Making matters worse, the U.S. only graduates about 65,000 computer science graduates per year. That’s not nearly enough to alleviate the shortage.

In February, the IT unemployment rate stood at 2.4%, compared to 6.6% across all occupations nationally, CompTIA reports.

Automation talent shortage creates thousands of unfilled jobs

For emerging technologies like automation and AI, the situation is even bleaker: there’s simply not enough talent to satisfy the need for these skills in the marketplace.

Implementing intelligent automation in an organization requires a new set of skills to effectively design, monitor, and optimize bot use. According to CompTIA, job openings in emerging technologies -or positions requiring emerging tech skills - increased by nearly 24% in February, accounting for 29% of open positions.

Searching “Robotic Process Automation” on LinkedIn’s jobs site in early March revealed more than 5,000 open roles in the United States. The same search on Indeed found more than 6,600 brand-new listings.

Asking for deep expertise with the biggest automation platforms becomes even more pie-in-the-sky. LinkedIn showed 2,000+ open roles requiring experience with UiPath, 2,000+ needing Automation Anywhere skills, and 639 requiring Blue Prism expertise.

Talent shortfall drives salaries and turnover sky-high

With demand for top talent drastically outweighing supply, many employers attempting to build an in-house Center of Excellence (CoE) must choose between compromising on automation candidates or training in-house IT staff already overburdened with other work.

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Unfortunately, inexperienced automation teams often underestimate the complexities of implementation or struggle to anticipate process exceptions that can impact bots’ productivity. Failing to find the right talent is a key reason a whopping 65% of automation initiatives stall after implementing a handful of processes.

Recruiting and retaining employees with emerging technology expertise costs companies a premium. It’s not unusual for sought-after developers and engineers to fetch annual salaries of $200,000, up from an average of $150,000 in 2018, WSJ reports.

Many companies further sweeten the pot with six-figure bonuses, outsize equity stakes, and other pricey perks, WSJ adds. Even first-year talent is cashing in, with average starting salaries for Class of 2021 computer science graduates jumping 7.1% over 2020 to $72,173.

Retention ranks as another critical issue with top talent a hot commodity. More than 90% of IT leaders expressed concern about losing top employees to other job opportunities in the next 12 months.

The tech industry reports the highest employee turnover of any business sector, with a churn rate of 13.2%. And in the tight job market, replacing technical positions like robotics engineers costs companies an average 100 to 150% of their salary.

3 ways nearshoring can beat the RPA talent gap

According to Gartner, the automation market will expand at double-digit rates through 2024, with 19.5 percent growth in 2021.

But the U.S. job market cannot keep up – triggering delays and weak automation stability for many companies that try to implement IA in-house. Competition for UiPath talent could become particularly fierce, as the platform’s popularity prompts more companies to fight for limited resources.

Developing specialized RPA talent takes time companies don’t have as they scramble to ensure resiliency after the pandemic. With no short-term solution in sight, more than 60% of businesses have turned to dedicated RPA third-party partners, realizing the critical need for skills they don’t possess to drive successful automation initiatives.

At a time when scaling automation is a unicorn, nearshore providers with an established CoE can offer invaluable expertise and guidance without the headache or cost of U.S. teams.

Consider three big benefits of nearshoring your IA journey:

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1. Access to a diverse pool of high-tech talent professionals.

Several nearshore locations have invested heavily into becoming technology hubs – with Costa Rica earning recognition as the Silicon Valley of Latin America. Automation talent at the Auxis RPA Global Center of Excellence in San José, for instance, maintains an average of over six years experience with top-rated UiPath - a critical advantage for U.S. companies struggling to hire skilled resources.

UiPath’s RPA report found that only 26% of in-house staff have more than three years’ automation experience. Some of the Auxis’ US clients that are leveraging their RPA capabilities from Costa Rica include Equifax, Amerant Bank, Baptist Health South Florida, and many more.

Costa Rican nearshore providers also benefit from a constant flow of IT graduates, with their digital tech labor force expanding at an annual rate of 17% according to the Costa Rican Investment Promotion Agency (CINDE). In addition to new graduates, over 350 multinationals have chosen Costa Rica to locate their Shared Services operations to support the Americas or the globe, providing an additional source of trained talent from these companies that have been part of the pioneers of implementing RPA to bring efficiencies in their back office.

In addition to holding the #1 English proficiency in LATAM and the best education system in the region, Costa Rica ranked among the top three countries in Latin America for tech skills in the 2020 Coursera Global Skills Index.

By 2018, around 29 Fortune 100 companies had already tapped into Costa Rica’s tech expertise through outsourcing or shared service centers, including Microsoft, Intel, Hewlett Packard, and Amazon. This number keeps growing year over year with 2020 representing a record number of new investment projects in the country despite the pandemic (81 new investment projects and 19,806 new jobs generated by multinationals, an 18% increase from the previous year).

In addition to Costa Rica, other nearshore countries with great IT talent availability include Colombia, Mexico, and Argentina. With a less competitive tech market, nearshore providers typically experience less turnover than U.S. or offshore markets, granting companies consistent access to reliable talent.

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2. Top talent at a fraction of the cost to maximize the value of your automation budget.

Tapping into the nearshoring talent market also enables enterprises to achieve significant cost savings without sacrificing quality. Nearshoring to Costa Rica, for instance, has an average labor savings of 40% to 50% compared to IT resources in the US, and sometimes even higher.

For the cost of an entry-level RPA developer in the US, companies can get more experienced resources from Latin America at a fraction of that cost.

In addition to considering cost savings, it’s also important to understand the quality of the nearshore talent as organizations are not only looking for the lowest cost but also the highest productivity and performance. After having implemented hundreds of robots, many experienced RPA nearshore firms can guarantee more rapid deployment of robots (with fewer errors and less rework) for the same amount of hours than less experienced teams in the US.

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3. Nearby time zones and westernized culture drive higher agility and collaboration.

Close collaboration between the business and the RPA CoE is essential to a successful automation journey, driving faster innovation and closer collaboration in a cost-effective manner. But the faraway time zones of Asian-based outsourcing models can hinder communication and vendor performance. As an example, New York is 10+ hours away from India Standard Time (IST) zone, versus less than 1-2 hours away from Costa Rica depending on the month of the year.

With the abundance of jobs in offshore markets creating a high demand for top talent, senior resources are rarely willing to work overnight shifts that align with western time zones. And if they do, this has a direct impact on turnover and retention.

As a result, higher-skilled “A” teams are typically concentrated in shifts that have minimal overlap with U.S. schedules. That means U.S. enterprises must either work with less-experienced people, experience frustrating lag time between responses, or schedule early-morning or late-night meetings to communicate face-to-face.

The proximity of nearshore RPA teams to the U.S. delivers a strategic advantage for automation initiatives. Shared or similar time zones enable agile, real-time communication with business teams. As COVID-19 travel restrictions ease, direct flights are also available to popular nearshore locations from most major U.S. cities.

The westernized culture that dominates nearshore locations creates easy alignment with U.S. businesses as well.

Look for nearshore providers with a proven track record of automation success

Gartner predicts that 75% of organizations will experience visible business disruptions due to IT skills gaps this year. Partnering with an exceptional RPA nearshore provider is a proven way to overcome the challenges of the U.S. talent shortage.

By working with reputable nearshore teams, automation can exceed business expectations - speeding up deployments, optimizing costs, and becoming more attuned to customer needs and desires than ever before.

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Diego Peña

Written by

Diego Peña

Diego is the Intelligent Automation Sales Director at Auxis, focused on building and growing the Robotic Process Automation (RPA) and IA Practice at the firm during the last 4 years. Diego brings deep expertise working with C-level executives from midmarket and enterprise organizations to maximize the return from their automation investments by guiding them through their end-to-end transformation journey, from the early stages of assessing the opportunities for optimization and building the business case, all the way to developing and implementing customized solutions to achieve the expected levels of efficiencies and cost reduction.