Portuguese companies that supply technological services are now faced with a dilemma: either they lose their talents or they follow the remuneration to a large extent already practiced in other geographies and other economies, with a purchasing power and an economic aggressiveness incomparably superior to the Portuguese one.
Portugal has been able to establish a set of reference schools in the Engineering field in the past decade, which have been able to produce a pool of technological talents with very high potential. If we add to this condition the fact that Portuguese is naturally introspective and has a natural ability to understand and master foreign languages, Portugal was competent in creating a generation of high technological value.
Having this talent should have allowed a structural change in terms of information systems and digitalization models of Portuguese companies, whatever their size. For more than a decade, Portuguese companies have had some of the best talent in the world at their disposal at an undeniably low price.
Portugal discovered the world in the 15th century and was discovered in the 21st century. The start of the Web Summit in Lisbon allows showing the country and its technological ecosystem to a group of CTO’s who quickly understand the potential of localization: safe, stable, competent, well-educated, and… cheap!
From there, until the opening of large centers of technological competence, it was a small step. And nowadays multinationals are losing sight of the fact that they have repositioned their centers to Portugal, thus taking advantage of a very significant part of their technological resources. This simultaneous movement creates the first visible impact on the market: the scarcity of resources.
Now, this lack of resources begins to produce the second short-term effect: when what we want doesn’t exist in the quantity we want, the solution is to pay more to obtain it. It’s the dynamics and the market at work.
As if this situation wasn’t challenging enough, here’s a pandemic and the beginning of the second major structural change: remote work. Technological talents quickly realized their ability to work for other geographies from the tranquility of their homes. When markets like North America experience a shortage of technological resources, everything around them is absorbed, including many national talents. The double effect reappears in greater scarcity and greater cost.
The opportunity cost
Portuguese companies that supply technological services are now faced with a dilemma: either they lose their talents or they follow the remuneration to a large extent already practiced in other geographies and other economies, with a purchasing power and an economic aggressiveness incomparably superior to the Portuguese one. And the solution can only be to increase compensation, which means increasing the operating costs of companies that are immensely dependent on their talents. Without people, products cannot be developed and services cannot be provided. But to maintain them and to ensure business continuity, companies will also be forced to make choices: who to serve in the face of scarcity of resources, and at what price in the face of their increase.
Portuguese companies, used to prices much lower than those practiced in other markets, are not prepared for the shock they will receive. The first impact will be having to compete on price with the values that are practiced in other geographies. The word we’re going to hear the most? unbearable. Then, even if the value is, even if at a cost, bearable, there is the issue of scarcity. It won’t be when the company wants it, but when it’s possible.
The dilemma
At a time when digital and technological ecosystems are critical and vital for the vast majority of businesses, the current panorama of technological talent may represent one of the biggest constraints to the country’s development in the short and medium term. Everything that Portuguese universities can make available is immediately absorbed by the market. Opening more vacancies takes at least three more years to produce results. And three years in the life of a company can mean the end of it. Perhaps for the first time in the history of work, there is a set of so-called normal professions that will have a global pay standard. Football was perhaps the first global example of pay patterns, but never before has a set of professions been able to globalize their pay pattern. But will there be a solution?
First of all, there is good news, there is value coming into the country and there is a new potential export industry that is positioning itself. And it will export high value-added products and services.
But there is also bad news: the more traditional sectors of our economy and those that need to make adjustments to their economic model, taking advantage of all the benefits of digital and technological ecosystems, will suffer and in many cases lose the competitiveness they so much need. The short-term needs that we have will only be met by resorting to other geographies – Brazil is one of them thanks to the attractive security we are able to offer – and reconversion training that allow certain profiles to enter this market not through university, but through professionalizing. For this to happen, companies need to make their decisions quickly, because never before, time is worth money, a lot of money!
Opinion article originally published in Human Resources
