How To Make Your Cloud Transformation Recession-Proof – Consider Hiring Services Rather Than People
All of the macroeconomic indications are pointing to the impending recession we are slipping into, which is unquestionably on the minds of every executive right now. For instance, interest rate expectations jumped abruptly as a result of inflation reaching 40-year highs. The market has quickly reacted, hard-hitting IT and growing businesses. The more growth-oriented the companies were, the more they’ve gone down over the last six months. Even the very finest SaaS businesses are going through difficult times.
As a result, venture capital funding for startups, especially late-stage businesses with 100 or more and 1,000 or more employees, has decreased. Due to the numerous uncertainties, including the recession, many venture capital firms are delaying their investments.
Companies must be exceptionally strong to get finance because there is significantly less capital available to invest. Businesses will have to tighten their belts and reduce their spending as a result of the new status quo, and startups will also need to consider maintaining their runway.
In light of the circumstances, some businesses could decide against recruiting new employees because it can involve a long-term commitment in addition to the time and money required for finding the best candidates and their onboarding. In the end, it doesn’t matter how many employees a company needs to succeed—what matters is what is delivered and, essentially, how many tasks need to be completed.
Companies might want to consider using hiring services as opposed to hiring people to solve a particular issue because the crisis presents a challenge to the company’s efficiency.
Why Services though?
- Services for businesses can be more predictable, especially when there are hidden risks and rigorous runway planning is required. This is particularly true for new businesses that do not yet have any revenue coming in.
- They can lessen the impact on business continuity. The essential services, such as software development or other professional services, can be obtained through a subscription-based service model, and the agreed-upon burn rate can be dynamically changed.
- Since you pay for addressing a business problem rather than investing time and money in associated overhead expenditures like recruitment, retention, HR management, office support, etc., they may be more problem-focused.
- Services may tend to be more flexible while corresponding products may be more focused on a particular issue that they aim to resolve in batches and in the same standardized way, avoiding any customizations.
- Since service providers already possess the required technical know-how and have their own development, they can aid in accelerating delivery. This could imply different things in different sectors.
- There is usually no need to wait for the hiring procedure because a lot of service providers have ready-made teams that can start working right away.
Making the Switch to a Service Model
Moving to a service model means scaling and looking for outside-the-box solutions to the problems the company is facing. The first thing a business must decide in this regard is whether hiring, say, 10 people is the best solution or whether it makes more sense to look for a vendor who already has some knowledge and some ready-to-use building blocks and who might be able to solve the problem more quickly and effectively—with the result of hiring fewer people.
It starts with deciding on the business cooperation model:
Choosing the business cooperation model is the first step.
- Team augmentation: The provider bears minimum responsibility and, consequently, brings basic value.
- Managed teams: The provider is responsible for the execution of certain tasks in the backlog and, accordingly, reports the performance metrics for team velocity vs. capacity.
- Service-level agreement for solution availability: This yields the most responsibility from the vendor.
Choosing the engagement model that is most effective for you is essentially what it means to switch to a service strategy. In a sense, it’s about growing the team, but this growth might be organized differently, which will have a different impact on your business.
The current recession is nothing new. Even though we’ve been in this situation before, nobody knows how long it will endure. It’s a major challenge for business, but some wonderful companies have been founded during prior recessions, so it’s not all terrible. There is no reason to think that this one won’t open up new possibilities.
You must establish clear priorities and put a strong emphasis on business efficiency if you want to become the next greatest company. Changing the way you approach this issue is one method to find a solution. Don’t think in terms of how many people your company needs to hire to grow but, rather, what the best way is of dealing with the tasks you need to complete and who the best people are for that. After all, recessions come and go, it is how you tackle them that matters.
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