Starting your software development project when the market is down is wise, for the same reasons that:
- Buying shares when they are priced low is wise, and
- Recruiting candidates when job market is low is wise
You will get good people and your project will get good attention during down turn, when software development companies are struggling to get projects. They have a good number of people on bench, and the fixed costs that they have incur is a liability. Because of this, some times, you may get a very good deal on the pricing front.
It does not take a great pundit to tell you that the IT industry is presently in the midst of a downturn. Many employees were laid off last year, and it has continued this year as well. For the first time, some leading companies canceled going for campus recruitment drive.
Situation was diametrically opposite not too long ago. There was crazy hiring going on. People received job offers which were twice or thrice as much as they were getting before. Every Tom, Dick and Harry, regardless of their skill level, got placed. There was a joke about IT companies putting up signs: “Trespassers will be recruited”. Paying high salaries to nincompoops was foolish, but companies had to do it if they had to retain people. Even then they could not do it as well as they would have wanted. Opportunists jumped jobs and got their pay packages further inflated.
Would you want to get your software developed under such circumstances? One should not, unless it cannot wait for some reason. In such an environment, projects suffer heavily due to skill issues and instability of workforce.
Every industry has ups and downs. However, the troughs and crests are going more severe lately. Hiring is severe and firing is severe too.
During the last “hiring” phase, software development looked rosy, and many companies started software projects at prevailing exorbitant rates. Instead, current downturn is ideal time when smart companies should start software projects before the opportunity windows end. If you are getting a good deal on the rates, try to go in for long term contracts.
Reach out to us if you need help. As advisors, we can help you benefit.