As we move past the halfway point of 2024, it’s worth examining the latest status of the Salesforce job market. If you’ve been keeping up to date with recent news, you’ll have a pretty good idea of what the landscape looks like already – if you haven’t, you will quickly begin to fill in the gaps.
With further layoffs, fluctuating stock prices, saturation, and the drop off of AI hype, it’s evident that the job market hasn’t bounced back to its mighty peak of 2022. As I was writing this article, the US stock market has had yet more bad news, with recession fears mounting.
There isn’t just one reason for this either, but there might be something behind the curtain that many of us might have missed: offshoring.
What Is Offshoring?
Offshoring refers to the practice of relocating production or services to overseas locations. It’s a common practice in the manufacturing and textile industries and provides benefits such as wider access to skilled labor, wider reach into overseas markets, and reduced labor costs.
This practice has become increasingly popular for numerous tech companies over the years, with some of the most successful examples including WhatsApp, IBM, Amazon, and even Google. It comes as no surprise that the Salesforce ecosystem have bought into this as well.
It must be noted, however, that offshoring does come with its risks and cons. For example, obstacles like quality control issues, time zone differences, and security and intellectual property issues are definitely things to consider. Although the practice is common, a lot of work is needed to get it right.
Offshoring vs. Outsourcing
Offshoring is often used in the same discussions as outsourcing, and although the two are similar, they do have their own distinct characteristics. Whilst offshoring specifically refers to utilizing labor overseas, outsourcing just refers to using an “outside” or third-party supplier.
Another common practice within the same realm is nearshoring, which refers to a company outsourcing its business processes or services to a location nearby, normally in the pursuit of cheaper labor. Some examples include nearshoring from Eastern Europe to Western Europe, and South America to North America.
Offshoring and nearshoring will be the two key focuses of this particular article.
The State of the Job Market
Before we delve any deeper, it’s important to assess and understand the current state of the job market. Since 2023, when I wrote Is the Salesforce Job Market Saturated?, the job market has seen its fair share of tumult. In July, Salesforce laid off a further 300 employees, bumping up the yearly total to 1,000. If you scroll LinkedIn for long enough or spend time observing the latest trends, you’ll see that the consensus remains that the job market is still very much saturated.
Combined with the juxtaposed influx of certified, entry-level professionals, alongside concerns that the platform is finally becoming too complicated, it’s clear that there is a level of uncertainty and confusion in the market as a whole.
Job Availability
Before we dive into the intricacies of offshoring and outsourcing within the ecosystem, it’s crucial to look at where the Salesforce jobs actually are vs. who is competing for them. This is how we can assess job availability.
According to LinkedIn, the US Salesforce talent pool is made up of 810,000+ Salesforce professionals open to work, with 360,000+ them being classed as “Active Talent” – a feature that signals to recruiters and hiring managers that you are open to new opportunities.
Note: These figures, however, provide a wide-angle view of the hiring situation, taking into account users that list Salesforce as a skill, or work with Salesforce in any kind of capacity such as sales or customer support profiles.
Now compare it to the available jobs: at the end of July, LinkedIn advertised just 1,915 jobs in the following categories:
If we break down the larger figures from earlier, the number of Salesforce professionals open to work in the US, within these categories sits around 38,500. For the purposes of this post, this figure provides a more accurate and precise look at the active hiring situation.
In order to examine the evident disparity between supply and demand (without considering aspects like duplicate job postings and alternative titles) we can observe that there are roughly 20 potential applicants per Salesforce job in the US, for these role categories.
In the UK, the results reflect a similiar pattern. According to LinkedIn, there are over 9,500 people open to work for these roles, compared to just 188 jobs in the same categories. This means there are 50 potential applicants per job available.
Germany’s market, once again, demonstrates a mirrored situation with 6,300+ professionals classed as “Open to Work” in these categories, and 162 open positions on LinkedIn (38 potential applicants per job).
Note: It’s important to establish that we are just looking at a select segment of jobs/applicants within the Salesforce ecosystem and that findings are likely to differ within role categories. Our findings, however, paint a picture of the disparity between jobs and applicants in some of the most sought-after roles.
Offshoring: A Quiet Cause
It’s no secret that factors like tumultuous economic conditions, tightening of budgets, and saturation are affecting the Salesforce job market. But one socioeconomic factor that we might not have considered as heavily is offshoring.
According to Forbes, the average IT department allocates 13.6% of its budget to offshored roles, and roughly 37% of IT tasks are outsourced – this is just for IT departments.
Looking at it from a larger perspective, according to a report by Growth Market Reports, the IT Services outsourcing market was valued at $525B in 2022 and is reportedly likely to reach $1.6T by 2031.
This is not without its reasons either. One of the biggest benefits of offshoring is definitely the cost reduction. In fact, working with offshore developers can reduce development costs by up to 90%.
It’s unclear just how widespread offshoring is specifically in the Salesforce ecosystem, but it’s a trend that definitely can’t be ignored. Olexandra Tryzna, the Growth Marketing Manager at MagicFuse (by TechMagic), says that the company has noticed offshoring becoming more popular for a number of reasons, including cost savings, scalability, and providing access to a global talent pool.
While the Salesforce job market is evolving, offshoring offers a compelling solution for many companies. It provides cost efficiency, access to global talent, scalability, and operational flexibility. As more businesses recognize these benefits, we expect the offshoring trend to continue growing. Olexandra Tryzna, Growth Marketing Manager at MagicFuse by TechMagic
Case Studies
Pracedo is one of these companies that are tapping into the benefits of offshoring. Phil Young, Pracedo’s COO, says that an offshore initiative felt like a “natural step” to the company:
“We’re trying to deliver a more rounded service,” he said. “It allows for [more] flexible pricing solutions for our customers.”
Pracedo’s offshoring effort to India began in September last year, and although the company is still navigating what Phil calls “crafting their space in the market”, they’re working hard to make sure that this practice aligns with their goals of scaling up and business growth.
On the other hand, offshoring isn’t always the solution for every company. Cloud for Good, a non-profit Salesforce consulting firm, proudly has all of its operations onshore.
Tal Frankfurt, the founder and CEO of Cloud for Good, says the company prides itself on having a team of full-time, onshore employees. He says that this helps ensure that everyone “remains true to the company’s core values” and provides them with a “competitive advantage” that comes with having a centralized team with shared cultures, time zones, and business processes.
“We need to think about the long term,” he told me. “[Offshoring] is not really something our customers are pushing for right now.”
When I asked him whether offshoring would become something on the company’s horizon, he said that they were still looking into it. “We’re exploring, but we’re not there yet,” he said. “The question always remains ‘how do we provide coverage for our customers?’, but the success of an implementation lies in the consistency of delivery.” He stressed that it was important that the customer was always at the forefront of every decision, and if it was something that he picked up that their customers were looking for, a next step could be made.
No matter whether a company chooses or has chosen offshoring as a business practice, it’s evident that it’s an option on many organization’s minds as the job market develops.
What Does This Mean for Employers?
As aforementioned, offshoring has its pros and cons.
For employers, these pros and cons include…
Pros:
- Cost savings: Arguably the main benefit of offshoring is the cost savings due to lower labor costs. Wages are often considerably lower in the most popular offshore regions, which is beneficial for businesses thinking about their profit margins.
- Larger talent pool: With offshoring, companies are exposed to a much larger talent pool than what they would be limited to in their home operating countries. This allows them to be selective about who they hire; even more selective than they can already be due thanks to a saturated market.
- Enhanced business processes and scalability: The benefit of offshoring in the Salesforce ecosystem primarily comes through its cloud-based system capabilities. This helps to ensure that scalability can be closely monitored and maintained, uniting business processes across multiple locations if need be.
Cons:
- Culture, time zones, and language: As with any non-national operations, differing cultures, time zones, and languages can affect everyone from the staff to the customers if not integrated seamlessly.
- Data security and compliance issues: Making sure the offshore team follows strict security measures and meets any legal standards relevant to your business can be much tricker overseas, and data security laws can differ between countries.
- Assessing technical expertise: Something that tech companies can run into with offshoring is the inability to properly assess technical expertise in their offshore teams. This is however less tricky in the Salesforce ecosystem, as credentials like certifications hold merit globally.
What Does This Mean for Employees? (New and Existing)
For employees, the pros and cons look a little different.
Pros:
- Increased job opportunities offshore: For offshore employees, more companies operating in your home country means more job opportunities, and, according to some studies, the potential for increased domestic wages too. If we take a look at some of the early findings of our first Salesforce Salary Survey, we can already begin to observe the financial effects. As a large proportion of outsourcing occurs in Asia across regions such as India and Pakistan, it’s interesting that out of all the regions we focused on, 46% of participants from Asia perceived an increase in wages, compared to 14.3% participants from Central America perceiving an increase.
- More leverage for onshore senior staff: Phil’s predictions for the future of offshoring in the ecosystem involved big impacts on new entrants to the industry. We have already noticed that offshoring is an alternative staffing model to hiring entry-level staff locally, so if the “lower risk, bigger margins” mentality began to influence the hiring of more senior Salesforce professionals, it is likely to cause a disparity between onshore and offshore cost models. If more senior staff are hired on an offshore basis, this could possibly make some customers and clients wary if they’re after the benefits that local workers offer like shared culture, time zones, and availability. Whilst this isn’t great news for employers, it could allow local senior staff to leverage higher wages.
Cons:
- Lack of onshore job opportunities: Unfortunately, one of the main cons of offshoring is that it potentially “takes away” job opportunities within onshore regions. As employers are enticed by lower-cost alternatives, they might see it better fit to hire offshore rather than onshore.
- Lack of investment in onshore training: As more and more entry-level Salesforce professionals seek to enter the workforce, a general reluctance around providing onshore training opportunities could start to be a trend as more talent is being utilized offshore. This isn’t always the case though, as can be seen with Cloud for Good’s “Talent for Good” apprenticeship program which aims to train onshore, entry-level Salesforce professionals both for the organization itself, and freelance work.
Summary
Offshoring isn’t the big “be all and end all” behind the Salesforce job saturation dilemma or the state of the job market. However, it is clearly something that is a focus of numerous companies within the ecosystem in some capacity, and although it has its benefits, there’s no denying the impact it has on the availability and accessibility of jobs.
Although it is by no means a new trend, offshoring remains a practice that should be considered both in the present evaluations and future predictions of the job market.
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