February 20, 2020 What Hybrid Talent Models Mean for Japan and Other Economies Facing Talent Shortages
Industries across the globe are facing serious talent shortages, particularly in IT. According to Japan’s Ministry of Economy, Trade, and Industry (METI), if Japan is unable to achieve wide-scale digital transformation using cutting edge technological innovations by the year 2025, they could face a staggering $107 billion in losses per year. This potential waterfall of costs is referred to as the “Digital Cliff 2025.”
In 2015, Japan lacked 170,000 IT engineers. By 2025, that number is expected to hit 430,000. This combination of talent shortage and the aggressive need for systematic digital transformation across Japanese businesses led Saito and his team to adopt a hybrid model of talent acquisition as well as distribution. This system utilizes on-demand talent to provide companies access to critical skills.
At Topcoder Open 2019 (TCO19) Shinobu Saito, Distinguished Research Engineer at the Software Innovation Center at the NTT Corporation, spoke about this IT tech talent shortage and what that means for national economies like Japan. The NTT Corporation is one of the 10 largest IT companies across the globe, and Saito’s team is actively testing novel solutions to Japan’s current talent shortage problem.
NTT’s Hybrid Sourcing Model Fights Talent Shortages
Saito and his team divert companies from that digital cliff through a combination of on-demand talent and in-house capabilities. In their hybrid talent sourcing model, there are two primary methods of filling in talent gaps.
1. On-Demand Talent Sourcing: The use of the internet to employ large numbers of hyper-skilled employees (typically through a platform that enables this transaction.)
2. Innersourcing: Using collaborative development inside of an organization to apply a single person’s skill set to multiple diverse projects.
Saito acknowledged the challenges associated with each of these types of sourcing. Sourcing internally limits companies to the skillsets available in their organization. Additionally, some companies aren’t comfortable giving data access to talent outside the company. Finally, security remains a top concern. Nevertheless, the hybrid model can work with strategic use of both types.
The NTT Hybrid Sourcing Model combines both types of sourcing to varying degrees, depending on the particular job or challenge. So, if an organization needs to perform a job where internal data can’t be shared with on-demand talent, they can leverage inner-sourcing to help fill in the gaps. Otherwise, NTT takes advantage of on-demand talent and crowdsourcing to provide key skills and support with tasks and projects across the IT pipeline.
According to industry reports, NTT’s model has been a success thus far. It has helped mend the growing talent gap. As well, it has introduced on-demand talent and crowdsourcing to companies in the Japanese market.