Why Premium Rates for many Digital Resources are Getting Lower | Sherpas in Blue Shirts

Given the newness and complexity of digital technologies, it’s not surprising that the previously relatively scarce pool of resources working in the digital arena commanded premium pricing. However, in the last six to 12 months, we have observed an improvement in the supply side, particularly in social and mobility, and to some extent in cloud and analytics. Thus, the premium prices being paid for these skills are starting to come down.

Some contributors to the digital supply increase

  • Most service providers began training their employees on digital capabilities and platforms right from the start, resulting in an already effective and large workforce
  • Giants such as Cognizant, Infosys, and Wipro have their own market places on which they list multiple training companies for their employees
  • Reskilling platforms like Planet Ganges and Pluralsight, and on-demand technology learning companies, are gaining traction
  • Many enterprises, and even some service providers, have strongly relied on merger and acquisition activities in the digital space to upskill their talent availability

From a geographic standpoint, there are some differences in the digital demand-supply scenario. For example, while the North American, European, and Nordic markets have a robust supply of digital resources keeping up with the demand, (interestingly, the Nordic countries were very early adopters of smartphones and high speed Internet), APAC nations such as India, Philippines, and Singapore are still relatively behind in bridging the gap. This is likely due to the higher demand in these countries, since they are the key offshore sourcing locations. In China and Japan, demand for highly skilled mobile app developers, especially in the gaming domain is quite high. These roles are mostly filled by local resources, as global competitors find it difficult to break through the cultural and lingual barriers.

Not all digital roles are seeing price drops

Although prices are dropping for many types of digital roles, some still command a significant premium due to relatively low supply and advanced skill set requirements. Roles in this category include data scientists, graphic designers, scrum masters, and usability experts, etc., as they not only need to have technical expertise but also creativity and knowledge of how ideas and actions can generate greater customer satisfaction.

In the short run, we don’t see the premium these digital roles are demanding going down, as they play a key role in the digitization of business models, which is a key priority for enterprises these days.

At the same time, new technologies will unquestionably enter this transforming landscape, once again changing the demand-supply-pricing picture.

For another take on hot, yet rapidly revolving, skills in the IT services arena, please read: “Modern Today, Legacy Tomorrow: The Nature of Fast-Changing Skill Demand in IT Services.”

Have a question?

Please let us know how we can help you.

Contact us

Email us

How can we engage?

Please let us know how we can help you on your journey.