What Does It Mean To Be Recession-proof In The Software Industry?

March 28 5 min read
Recessionproof in software industry

Headlines about recession make even the most successful entrepreneurs shrug. Because recession isn’t the same for everybody. What a blatant truism, right?

And yet, most businesses didn’t act like they understood how to solve the market dilemma during the 2007-2010 recession. Granted, the tech industry wasn’t what it is today – filled with big tech companies that are not just too big to fail, but too big to accommodate even the slightest of competitors.

But at the same time we hadn’t developed a framework of solutions to help us with employee modularity, such as outstaffing. There’s a 1.7 to 1 rate in the US/EU talent payment comparison, making talent in the EU much more accessible. With the money that’s necessary to hire one professional in the US, you can pay 1.7 out of two professionals’ fees in the EU.

A good exercise when trying to understand the anatomy of an economic crisis from the inside is taking a good look at the ratio between skills and wages – it’s the one indicator that makes the biggest difference, whether you’re planning to scale up or down.

Areas like product management and deep engineering will still increase in net wages, regardless of the amplitude of this recession, especially because of the global talent shortage that we’ve been struggling with during the past half a decade.

Once you’ve secured your key collaborators, the next step is to take a deep dive into the market, through one single criterion – the type of talent you need to ensure key production areas, focusing on a functionality-first approach.

While it’s not the most profitable of approaches during the growth of the economic bubble, it’s definitely the best way to minimize damage and to ensure profitability during uncertain times. 

Talent Solutions – Nay To Yay

Use More Juniors

Now unfortunately, this has been a modus operandi for quite some time during financially unstable periods of time, where companies would rely on junior staff when it came to production and other business critical areas, such as sales, marketing or financial planning.

This would simply have to be the worst case scenario. Not just because it doesn’t work and you would risk crippling your chain of production, but also because it would turn you into an unreliable actor in a market that’s certainly going to value reliability above all else.

Unless you want to turn your now successful company into a hectic madhouse that overworks unprepared talent to no realistic end, getting rid of the professionals who actually know what they’re doing and are for all intents and purposes keeping your business afloat is simply not your solution.

I do feel the need to mention that not hiring juniors at all during recession is an equally bad move. Young talent isn’t just more vivacious, but also more grateful about the growth opportunity during a bad economic time, which will definitely help with retention and attrition numbers if you’re in the kind of business that is comfortable enough to have resources to spare for the sake of long term goals.

Automate More

This is actually not a catastrophe of a solution, unlike the previous one. You could, in fact, automate more. 

Recession proofing your business like you’re sure that a bad economic period is approaching only makes sense, since inflation is already making its constant move towards the embarrassing upper right corner of our graphs.

If you want to minimize time on activities that don’t generate revenue as part of becoming recession-proof in the software industry, the best idea is to include automation as a part of your plans. From employee retention tools to internal process optimization, everything can benefit from a little streamlining.

If you’re thinking ‘so if this is such a good idea why isn’t it on the bottom of your list?’ right about now, you’re not wrong, and it’s completely understandable. 

The reality is that automation, just like any other substitute for human touch, is simply not enough to create and maintain a strong foundation for your business, whichever your plans for the future and your immediate goals might be. 

We’d take this opportunity with a grain of salt, as it’s a perfect complementary tool, but it can’t replace, nor mimic a systemic approach.

Sacrifice A Little Comfort For Stability

One indisputable advantage of remote teams is scalability. It’s the one thing that makes all the difference in an uncertain context, and that can help you become recession-proof in the software industry.

Need more people for the following 6 months to be working on a specific feature that your solution simply must incorporate in order to stay competitive? Here’s your solution. It simply wouldn’t make any sense to hire long-term employees before you know just how profitable the new feature might be, but if you also can’t afford to not implement it, the solution seems to be just there.

And there’s another thing, too. Cultural differences and time zone incongruences are just not a good enough reason to sacrifice your profit margins in a time when profit is scarce. And in most cases they’re not at all disruptive. Not to mention the plethora of solutions that the pandemic has thrown at us when it comes to remote collaboration, which turned out to be the way to seamless communication between remote or hybrid teams.

And if right about now you’d be thinking ‘well of course you’d write that, you’re an outstaffing company yourselves, how would you say otherwise?’ you’d be, once again, not wrong.

In fact, this is how we know how you should become recession-proof in the software industry. We’ve been helping different companies, from startups to large corporations, compartmentalize their business development through highly skilled, experienced teams.

And we’re all about your bottom line.

Don’t believe us? Let’s have a chat and we’ll walk you through the numbers.