Why should Germany outsource IT talent from Africa?

In recent years, the pronounced global IT talent shortage has become increasingly evident. IMF predicts a staggering deficit of 85 million skilled IT professionals by 2030, underscoring the urgency of addressing this pressing challenge. In Europe, despite concerted efforts by organizations to implement mitigating strategies including upskilling, reskilling, and redefining requirements to fill technological vacancies, more is needed to meet the escalating demand.

In Germany, the challenge persists with alarming projections. The IT talent gap is anticipated to reach a staggering 230,000 by 2025. According to Bitkom, a survey conducted among 853 companies across diverse industries in 2023 revealed an increase of 12,000 unfilled IT positions from the previous year, bringing the total to 149,000 vacancies.

Given the above, it has become imperative to address the shortage of skilled IT professionals on a larger scale. Recognizing the pressing need to strengthen the talent pool is essential for sustaining and advancing technological innovations.

For German businesses grappling with these challenges, could exploring the potential contributions of African youth be a promising solution?

Africa is a great remote work destination

Over the last decade, the term “remote work” seemed like a futuristic buzzword to reality, and for Africa, the truth of this statement was far-reaching. However, as of 2022, Africa is asserting itself as a formidable remote talent pool. The professional landscape on the continent has undergone a significant transformation, seamlessly adopting remote work as the new norm. According to the World Economic Forum, currently, 42% of individuals engage in remote work at least one day per week, and an impressive 73% express an unwavering willingness to participate in remote work initiatives. These numbers underscore not only a willingness to adapt but also a proactive eagerness to harness the benefits of remote collaboration. For German businesses, this shift presents a tangible opportunity to access a dynamic and motivated workforce.

German companies engaging with African talent also benefit from the overlap with German working hours. Studies show a 3–4 hour overlap between major German cities and tech hubs like Johannesburg, Nairobi, and Lagos. This alignment eliminates potential delays and facilitates real-time interaction, creating an environment conducive to productivity and effective teamwork.

The lower attrition rates in Africa’s IT sector present a notable advantage for German businesses. With voluntary turnover rates 10–20% lower than in developed economies, German companies can benefit from increased stability and continuity within their tech teams. This lower attrition contributes to a more reliable and consistent workforce, ultimately enhancing project continuity and overall team effectiveness.

Additionally, the widespread proficiency in English across many African countries provides another significant benefit for German businesses. Simplified communication facilitates smooth collaboration between German companies and their African counterparts. This language compatibility reduces potential language barriers, ensuring more transparent communication and fostering a more productive working relationship.

Cost saving

For many large businesses, the pressing IT talent shortage casts a shadow of concern over their operation activities. The impact is deeply personal, throttling a lot of companies’ productivity, stifling innovation, and leaving an unmistakable mark on their bottom line. Recent findings (Bitkom) highlight a substantial €100 billion revenue loss for German companies in 2023 due to unfilled IT positions. The situation is exacerbated by high average IT salaries, surpassing €70,000 annually for roles such as software developers.

In contrast, African IT professionals offer a cost-effective alternative. Their salaries are significantly lower, averaging 30–50% less than their German counterparts. What’s more, African IT professionals offer competitive hiring rates compared to talents from continents in Asia and Southern America. This cost advantage is partly attributed to the lower cost of living in Africa.

For these large German businesses, these lower labor costs will mean more than just saving money. It will directly contribute to improved financial health, allowing large corporations to maintain competitiveness and reinvest savings into research, development, and strategic initiatives. In the long run, they will be better positioned to navigate economic uncertainties, ensuring sustained growth and resilience in the face of challenges. In the case of SMEs grappling with escalating operational costs, these lower labor costs will boost competitiveness and growth.

Access highly skilled IT talent

For the backbone of the German economy, medium-sized businesses, the ongoing IT shortage challenges securing skilled professionals due to their inherent resource limitations. A comprehensive 2024 IHK survey underscores this predicament, revealing that a significant 72% of Mittelstand companies grapple with constrained budgets and cannot afford comprehensive training programs, which has posed a dual challenge for these businesses: attracting and upskilling talent.

When it comes to attracting highly skilled talent, these Medium-sized companies can strategically tap into the pool of highly skilled IT professionals in Africa, even in the absence of competitive salaries and extensive training opportunities. Educational institutions across Africa are churning out a lot of graduates well-versed in cutting-edge technologies such as AI, blockchain, and cybersecurity. A UNESCO 2022 report reveals that presently, 62% of African graduates are STEM-qualified, compared to 23% in Germany (OECD, 2020). The result is an annual increase of over 10% in IT graduates, which equates to over 700,000 talented minds entering the workforce each year, all accessible to German medium-sized companies.

Fast hiring processes

Countries like Kenya, Ghana, Rwanda, and South Africa have cultivated thriving tech ecosystems by establishing tech hubs and accelerators. These hubs have nurtured aspiring IT professionals, providing essential elements like training, mentorship, and access to funding. For German businesses, this translates into a readily accessible pool of talent equipped with relevant skills and experience.

Additionally, several African nations have streamlined their visa procedures to significantly ease and expedite the processing of IT professional hires for companies abroad. Countries like Kenya offer a “Startup Visa,” while Rwanda provides the “East African Community Partner State Visa.” These specialized visa programs expedite processing for tech professionals, ensuring a smoother and more efficient hiring process for German businesses.

What’s more? German businesses can turn to IT outstaffing providers such as getINNOtized to swiftly and confidently hire qualified candidates, reducing the time, administrative burdens, and resources typically associated with recruitment as these platforms specialize in pre-vetting African IT professionals.

Data protection and privacy

Although Africa’s tech talent pool presents a goldmine for German businesses facing skill shortages, data protection and privacy are crucial for successful cross-continental recruitment. German companies operating under the General Data Protection Regulation (GDPR) have a high bar for data privacy. This means that hiring African talent necessitates complying with local data protection laws, which can vary across the continent.

Fortunately, many African nations are stepping up their data governance game. Ghana, Kenya, Morocco, and Nigeria have implemented comprehensive data protection acts or regulations on purpose limitation, data minimization, individual rights, personal data processing, breaches, and cross-border data transfers. South Africa is finalizing its Data Protection Bill to align with the GDPR and bolster regional harmonization. These initiatives create a more secure environment for data exchange, fostering trust between businesses and individuals, while harmonizing regulations and making compliance easier for German businesses seeking to hire skilled IT talent.

Conclusion

Embracing the talents of African youth isn’t just a solution; it’s like opening the door to a future where German businesses work closely with Africa, bringing collaboration and innovation. Businesses that take this chance aren’t just finding the skills they need right now — they’re leading a new era of teamwork and creativity globally. Together, let’s navigate the evolving landscape of global IT challenges and build a future where innovation knows no bounds.

Source:Bitkom