It’s somewhat ironic how Donald Trump came to power on the rhetoric of reversing what he and his supporters called “too much of globalisation”. In fact, he was successful to an extent. He pulled out of, and renegotiated, trade agreements even if he couldn’t bring jobs back home from abroad.
But after Covid-19, the entire narrative and four years of effort took a logistical hit. Everything that could be moved online did, thus blurring the idea of border and space itself. As a result, remote work and distributed teams became increasingly common and embraced by companies of all sizes, especially in the technology arena. Naturally, local entrepreneurs saw a potential market, thanks to the burgeoning of tech talent demand along with an increased familiarity and acceptance for remote work.
For example, after the Covid-19 outbreak, Qasim Ahmed Salam and Talha Masood — two techies who had been working remotely pretty much all their lives and at the time were running a software company by the name of CreativeMorph — decided to jump on the opportunity. Soon after, they launched Remotebase, which helps US-based startups build their engineering teams. Less than a year into existence, the duo’s startup raised a $1.4 million seed round for exactly this offering.
Another company that’s working in the same space is Gaper.io, founded by Ahmed Muzammil and Mustafa Najoom, an engineer and an accountant, respectively. They describe it as a Tinder for startups and engineers — basically a marketplace where companies can easily connect with tech talent and vice versa.
While global organisations are increasingly moving towards advanced technologies, Pakistani engineers are a little behind. A sizable share of development work being outsourced here is outdated
Both the startups help foreign companies find the right resources, train and place them. That requires managing HR to compliance and everything in between. Even the employees work on their payroll rather than the foreign entity, which is instead billed for contractor services. The local startup then earns on the price differential. In the case of Remotebase, each engineer spends around 6-12 months for a company before rotating to another.
Anyone even ‘remotely’ familiar with the tech ecosystem would know that this offering of building tech teams has been in place for quite some time. For example, Venture Dive has been doing that for years and boasts about once hosting all of Careem’s founding developers. Even today, many well-funded local startups also pay them to have a certain staff devoted. They aren’t the only ones either.
Vizteck Solutions, too, has been doing something similar for at least five to six years, albeit at a smaller scale. It works on a project basis and hires the tech talent locally for its foreign clients and expenses the salary on its own payroll.
“Under this model, a 100 per cent margin is quite normal. So I price the engineer at $2,500 to the company and fix their monthly salary at $1,000. That money goes towards covering any risk or expenditure incurred for business development, sales and marketing etc,” says Barkan Saeed, the CEO of Vizteck Solutions and the serving chairperson of the Pakistan Software House Association.
While lucrative in its own right, there has been a move away from project-based work to product-oriented work. That means the engineer will now be placed at a single company and the objective is not the delivery of an end-to-end app or a website. “They could be working on a specific part of the product and are a member of their team,” says Mr Salam of Remotebase.
However, a common feature across the board is that the engineer is almost always the employee of the Pakistani organisation instead of the foreign entity. That’s due to the outsourcing company’s unwillingness to get bogged down into HR and compliance–related issues, both Mr Salam and Mr Najoom of Gaper.io say.
Everything said and done about the boom in demand for tech talent, the problem is mostly the supply-side. Specifically, it’s the gap between the skills required versus the skills offered. While the global organisations are increasingly moving towards advanced technologies, such as react, nodeJS or cloud computing in general, Pakistani engineers are a little behind. A sizable share of the development work being outsourced here is outdated.
This means that the local startups offering to get engineers placed in growing companies abroad struggle with finding the right talent. In order to bridge the gap in skills, they spend a significant time on trainings.
For example, Gaper claims to have a 14- and 7-week boot camps where resources are given lectures on computing and communication skills, respectively.
There is no doubt that demand for tech talent is unmatched, and is only going to grow. But local startups in the end are a function of their environment.
So if serious efforts are not put into expanding the human resources and their skillset, then these young companies will continue to struggle in finding suitable candidates. That’d mean investing in good engineering universities — perhaps the likes of Indian Institutes of Technology — and not just making hollow claims about Pakistan becoming the “tech hub” as that needs more than just Coursera.
Published in Dawn, The Business and Finance Weekly, April 5th, 2021