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2018 staffing strategy


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Staffing plan to add a mix of onshore and off shore consultants to the staff of a company. Includes business case and cost-benefit

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2018 staffing strategy

  1. 1. Solving XYZ Corp Software Engineer Shortage
  2. 2. Note I wrote this staffing plan for a formal company and 2
  3. 3. Overview • Target qualifications/criteria for Software Engineer (SE) for XYZ Corp. • Philadelphia based • Has mature Software Engineering thought processes • Some demonstrated Python and Flask experience / skills • XYZ Corp. has capacity to bring some Junior SEs on board and mentor • XYZ Corp. will not sponsor Visas • XYZ Corp. will not work with Recruiting firms at this time • Decisions on Visas and working with Recruiting firms are based on costs vs previous results and could be open to review / change. 3
  4. 4. Summary of Recruiting Efforts to Date • XYZ Corp. job postings appear on • XYZ Corp. Website (ProductA used as ATS) • AngelList (feeds into ProductA) • (does not integrate with ProductA– started 2/25/201x) • LinkedIn (feeds into ProductA) • Glassdoor (feeds into ProductA– started 4/1/201x) • Posting has been up (with multiple revisions) for 543 days and generated 137 total applicants • Software Engineer posting has generated since Jan 21 • 36 (XYZ Corp. and AngelList) and 47 (LinkedIn and • Resulted in 3 interviews and 1 hire 4
  5. 5. Summary of Recruiting Efforts to Date (2) • Majority of applicants are Undergraduate and Graduate students with no or little (limited intern only) experience • Stand out in-school candidates are retained to revisit their applications near/at graduation (2 in ATS now) • Based on personal experience, this is not an unusual or low rate • Assessed local and national benchmark salaries • XYZ Corp. pays as well or better than Philly average (which is higher than national average) • Continuing to try new approaches • Updated content based on XYZ Corp. Staff feedback • Created an additional posting with salary included along with similar posting w/o salary on 5
  6. 6. Comparison of Recruiting Efforts • XYZ Corp. Posting on LinkedIn • Results are ordered by LinkedIn algorithm but are usually on first 3 or 4 pages (could improve with paid sponsorship but only marginally) • XYZ Corp. response rate (3 apps in 4 weeks) is at least as good (PromptWorks - 2 apps in 3 weeks) or better (Comcast - 0 apps in 4 weeks) than similar postings • Effectiveness of recent tweaks • Modified wording: Week from 3/24 to 3/31, the response rates were flat • Posting with salary: New posting that included salary received fewer responses than similar posting with no salary • The week the two ran side by side indicates this is not a factor driving response rates or quality/career level of respondents 6
  7. 7. …and the Situation is not likely to Improve • As XYZ Corp. grows, 2021 could see XYZ Corp. with 90+ clients and millions of lives serviced, this will likely result in: • More Software Engineers needed to develop and support new features • More Software Engineers needed to automate processes just to sustain • More Software Engineers (or technical positions in Data Science or Client Management) for on boarding and processing (not all processes can be 100% automated) • The situation for recruiting Software Engineers is likely to get worse • Comcast Tower 2 opens in 201x • Other business (The Vanguard Group, LiquidHub, Lincoln Financial, etc.) are expanding or moving into Philadelphia • Potential Amazon HQ2 and other new entrants placing further demand 7
  8. 8. What Staffing Mix Should XYZ Corp. Target? • XYZ Corp. should have as employees (FTEs) all Mission Critical / Strategic positions (Data Scientists, Product Managers, Client Management, Sales, Software Engineers, Project Management, Architecture) • The right staffing partner can help with • Staffing roles where XYZ Corp. cannot justify an FTE or can perform some “commodity” functions when staffing is difficult can be outsourced • Staff Augmentation until we can hire Staff positions • Effectively staffing some positions that while important are less strategic (such as creating integration testing scripts, automation, build and deploy, off hours support, Defect Triage and testing, Performance testing and others) 8
  9. 9. Staffing Model “Magic Quad” 9 MISSION CRITICAL SUPPORT Risk STRATEGICTACTICAL MarketDifferentiation INTERNAL Key differentiatingprocess thatentailsrisk: e.g. Architecture,businessrequirements, projectmgmt,security,releasemanagement A non-differentiatingprocess thatentailsrisk: OUTSOURCE e.g. provisioning, disasterrecovery, Desktophelp desk A key differentiatingprocess thatentails littlerisk CONSULTANT e.g. Branding,Web Design,UI/UX and all staff augmentation roles(a specialcase) Neitherdifferentiatornorriskbearing – justa needed process CONTRACT e.g. PC disposal, networkinstallation Short termengagement,deliverabledrivenShort termrenewable, Informal or formal, SLADriven Longterm, formal, SLAor deliverabledriven XYZ Corp.Employees Employees Employees staff positions in the Internal (Strategic/Mission Critical)area andstaff the interactions tocontrol other quadrants Commodity services often have a higher total cost if staffed by FTEs because outside providers can realize economies ofscale andother efficiencies due tofunctions being their core competencies; this results in lower costs for services
  10. 10. When XYZ Should NOT Leverage a Partner • XYZ Corp. should continue to do primary software development with employees whenever practical • Development is a strategic & mission critical process that we must own • It can be a challenge to maintain quality and schedule when development is done in large part by consultants • Doing so often results in higher costs • Skillset gaps and project duration are often driving factors • After we are accustomed to the relationship and get a smooth rhythm going, we can evaluate leveraging a partner for primary development • Can be onshore/nearshore or offshore • Just like any consultant, we can get specific help for specific skillsets for limited or extended durations as needed 10
  11. 11. How Can XYZ Corp. Use a Staffing Partner? • XYZ Corp. should continue all efforts to fill key open positions • XYZ Corp. should engage with a Staffing Partner that help with these areas from the “Staffing Model” • Consultants and Staff Augmentation • Includes roles like UI/UX where XYZ Corp. needs long-term but part time engagements that will have an uneven demand curve • Outsourcing 11 Months Hours
  12. 12. Value to XYZ Corp. 12 • XYZ Corp. can leverage a Partner’s resources, dedicated to XYZ Corp., to ensure XYZ Corp. employees focus on the highest value work. For example: • Consultants could run Performance Tests and other Release related work allowing XYZ Corp. employees to stay focused on development Sprint work • In-office or offsite Software Engineering consultants would help bridge staffing gaps as XYZ Corp. recruits replacement or new staff with minimal disruption to delivery schedules • Provide transactional consulting services for roles where XYZ Corp. does not yet (or for some time) be able to justify an FTE: example UI/UX design
  13. 13. Consulting Engagement Proposed 13 • There will be enough work that XYZ Corp. should engage two partners to provide consulting services. Suggestions: • VendorB has “nearshore” staff. • VendorA (part of LargeCorp): Has large India presence for overnight work and to meet skillset gaps. Fewer onsite possibilities but can provide as needed. • In general, we need very few “onsite” consultants • The most vital function of the onsite role is to manage the offsite engineers • Employees will fill onsite staff as much as possible
  14. 14. Consulting Engagement Proposed (2) 14 • VendorB has fewer employees but the “nearshore” (S. America) based staff has comparable rates to India based firms but is in same time zone. • VendorA and related LargeCorp companies have a deep pool of well qualified Software Engineers and other employees • About 24,000 total employees; 8,000 in US, the rest in Europe, Eastern Europe and India. • VendorA can provide XYZ Corp. with a wide range of services; US based software engineer help, specialty consulting (UI/UX) and other services as XYZ Corp. needs and for as long as XYZ Corp. needs
  15. 15. Consulting Engagement Proposed (3) 15 • Find several Mid-level / Senior Software Engineers to get our staff filled out • Based (at least initially) in XYZ Corp. Office • Interview can be similar as employee interview process • Continue to look to fill open XYZ Corp. Employee positions • When XYZ Corp. Employee positions are filled, scale back onsite consultants as necessary
  16. 16. Offshore Engagement 16 • At some point it is to XYZ Corp.’s advantage to leverage VendorA’s offshore capabilities • One of the benefits this will provide XYZ Corp. is the ability to leverage offshore to perform targeted work. Advantages include: • Complementary hours: work like Performance, Integration or Regression Testing can happen overnight US time. • Work needed to support XYZ Corp. employees can be prioritized and handed off to be completed after hours (US time) during VendorA’s Offshore normal hours • The VendorA team can complete vital (but usually not specialized work), such as automation of new feature development more cost effectively and (more importantly) XYZ Corp. will be able to staff the positions
  17. 17. Offshore Engagement – How it works 17 • General roles for VendorA people and what they do • Onsite Technical Lead: This person is 100% based in XYZ Corp.’s office and is a Senior Software Developer. The Technical Lead is responsible for understanding any work that any onsite or offshore VendorA team member is assigned. This person communicates with the Offsite Technical Lead and often other offsite people • Onsite Consultants: Like any consultant, this person is in the XYZ Corp. office and participates in all development sprint meetings (if they are performing Sprint work) • Offsite Technical Lead: This person is responsible for onsite-offsite communication and management of all offsite resources. This person often participates in development sprint meetings and often overlaps XYZ Corp. office time in the morning
  18. 18. Offshore Engagement – How it works (2) 18 • General arrangement • Offsite Consultants: These consultants are directly managed by the VendorA Leads and participate in development sprints only when they are assigned Sprint Backlog items. Communication is usually channeled through the VendorA Technical Leads unless the consultant is assigned Sprint work, then the consultants participate in development sprint meetings
  19. 19. Timeline 19 • Receiving an SOW from VendorA this week • Will review resumes and interview (TBD – but ASAP) • Begin: cannot begin to determine until we have an acceptable SOW and consultants
  20. 20. Cost Benefit Analysis Summary 20 Annual fully loaded costs w/ consultant all employees 1 on - 5 offshore 1 on 2 off Open SE 1 (name) $135,000 $135,000 $135,000 $135,000 Open SE 2 (Actively interviewing) $135,000 $135,000 $135,000 $135,000 Consultant SE convert to employee (name) $336,000 $135,000 Open SE (Voluntary Term - March) $150,000 $150,000 Employee A (At Risk for Voluntary Term) $125,000 $125,000 $125,000 $125,000 Open (SM promoted to Product Team) $120,000 $120,000 Annual cost of VendorA contract $468,000 $312,000 VendorA Onsite Tech Lead Included Included Offshore 1 included Included Offshore 2 included Included Offshore 3 included Offshore 4 included Offshore 5 included Total year cost $1,001,000 $800,000 $863,000 $707,000
  21. 21. Cost Benefit Analysis Summary 21 Total Year costs Jan Feb March April May June July Aug Sept Oct Nov Dec Open SE 1 0 0 5,625 11,250 11,250 11,250 11,250 11,250 11,250 11,250 11,250 11,250 Open SE 2 0 0 0 5,625 11,250 11,250 11,250 11,250 11,250 11,250 11,250 11,250 Consult SE 18,000 18,000 18,000 15,000 Open SE 12,500 12,500 12,500 At Risk SE 10,417 10,417 10,417 10,417 10,417 10,417 10,417 10,417 10,417 10,417 10,417 10,417 Open SM 10,000 10,000 10,000 37,000 37,000 37,800 37,800 37,800 37,800 37,800 37,800 $50,917 $50,917 $56,542 $42,292 $69,917 $69,917 $70,717 $70,717 $70,717 $70,717 $70,717 $70,717 $764,800 Total people on Payroll 4 4 5 7 7 10 10 10 10 10 10 10 AssumptionsSM transitions to Product Owner and employee costs covered under Product for April VendorA onsite and Geiser to pick up SM duties Budget allocated to 2 employees and consultant used to fund VendorA consultants 201x May 1 onshore and 2 offshore in US for Training (additional T&E costs included) June 1 onshore and 2 offshore in US for Training (additional T&E costs included) July 1 on shore and 5 offshore for entire month August 1 on shore and 5 offshore for entire month Sept 1 on shore and 5 offshore for entire month Oct 1 on shore and 5 offshore for entire month Nov 1 on shore and 5 offshore for entire month Dec 1 on shore and 5 offshore for entire month
  22. 22. Cost Benefit Analysis Summary 22 • Partnership will allow XYZ Corp. to fill long term open positions • Will enable Development to meet currently at risk New Product schedule • Will enable Development to implement critical automation and testing goals needed to meet for growth targets and operational objectives • Reduction of full year budget of current $1.0M to $850k • Labor costs reduced by the fully loaded cost of one Sr. Software Engineer • Increases Engineering staff from 6 to 10 FTEs
  23. 23. XYZ Corp.’s Points of Control 23 • XYZ Corp. controls the contract, XYZ Corp. can ramp up or down as needed with minimal lead time (ramp up ASAP, ramp down with 30 days notice) • Interactions with VendorA are aligned with Staffing Model “Magic Quad” Upper left and Lower Right quadrents. • Long term, formal, SLA or deliverable driven • Short term engagement, deliverable driven
  24. 24. Appendix slides 24
  25. 25. Constant Demand (Base Capacity) Variabledemand Variabledemand Two types of demand: Constant and Variable ConstantDemand: Baselevelofcapacityneededtosupportgoingcontinuingdemands;KTLO,projectwork,etc.withskillsetsthatdo notchange rapidly. NotallConstantDemandneedsorshould beFTEs VariableDemand:Demandthatspikesatdifferenttypesdue tochangingdemandorskillsetsrequiredtocomplete work Constant & VariableDemand
  26. 26. MISSION CRITICAL SUPPORT Staffing Model Risk STRATEGICTACTICAL MarketDifferentiation INTERNAL Key differentiatingprocess thatentailsrisk: e.g. Architecture,businessrequirements, projectmgmt,security,release management A non-differentiatingprocess thatentailsrisk: OUTSOURCE e.g. provisioning, disasterrecovery, Desktophelp desk) A key differentiatingprocess thatentails littlerisk CONSULTANT e.g. Branding,Web Design,UI/UX and all staff augmentation roles(a specialcase) Neitherdifferentiatornor riskbearing – justa needed process CONTRACT e.g. PC disposal, networkinstallation Short termengagement,deliverable drivenShorttermrenewable, Informal or formal, SLADriven Longterm, formal, SLAor deliverabledriven Employees EmployeesstaffpositionsintheInternal(Strategic/MissionCritical) areaandstafftheinteractionsto controlotherquadrants Commodityservicesare oftenhave a highertotalcost if staffedby FTEsbecauseoutsideproviderscan realizeeconomiesof scaleandotherefficienciesdue to functionsbeingtheir core competencies;thisresultsin lower costsforservices Terms:“Consultant”in thiscaseis someonewhoactuallygives adviceand setsdirectionand arenot “commodity” functions. “Outsource”encompassesstaffaugmentationforperhour helplike java developers Employees
  27. 27. Employee FTEs consultants consultants Cost Optimized Staff Level ThecostofconsultantsisalmostalwayshigherthanFTEs. Evenifyouarenotableto exactlyestimatelongtermstaffingdemand,theCostOptimizedStaffing LevelisusefulandisaMinimumAverageCostproblem. Skillssetsthatfrequentlychangecan drivedowntheCostOptimizedStaffLevelsotherightskillsattherighttimeare available. CostOptimized Staff Level Staffing Model for VariableDemand
  28. 28. consultants consultants Cost Optimized Staff Level A mixofonshore/offshoreEngineerscan shiftthemodelasabove Careneedstobetakenin whatworkisallocatedtooffshoreandthatappropriatecontrolsarein placetoensurequalityof deliverables CostOptimized Staff Level Staffing Model for VariableDemand Employee FTEs