The skills shortage is always with us. For years, the industry has complained about the difficulties of recruiting appropriately qualified people.
Despite the recession, the sector continues to grow: the Technology Insights 2011 report from sector skills council e-skills UK estimates that more than 550,000 new entrants over the next five years are required to fill IT and telecoms professional job roles in the UK.
Some of these new entrants are needed to replace natural wastage of people who retire or leave the industry. But others are needed to fill new jobs: according to the report, employment in the IT industry is predicted to grow at nearly five times the UK average.
In June 2011, Stephen Leonard, CEO of IBM UK, told The Daily Telegraph that the company had only been able to fill 80 per cent of the 1000 technology jobs it had created in the past year.
“Our combined ability to identify, recruit and retain skilled candidates is weaker today than it has probably ever been,” he said, adding that skills constituted the “biggest challenge we will face in the next five years”.
Yet there are puzzling anomalies. Computer science graduates find it harder to get a job than any other group of graduates: six months after graduating, 17 per cent are still unemployed, compared to an average figure for graduates of 10 per cent, according to the Higher Education Statistics Agency.
This is despite the fact that there has been a dramatic drop in the number of computer science graduates: in 2009, only 15,000 UK residents applied to study computer science courses, compared to 27,000 in 2001.
Asked in the e-skills UK survey what issues worried them, only three per cent of employers said they were “very concerned” about the availability of skilled IT and telecoms staff.
It’s not easy to unpick what’s going on, but there are some clues. When asked where the biggest shortfall lies, most businesses aren’t complaining about a lack of new graduates; instead the shortfall seems to lie in two main areas.
One perennial area is whichever software development skill is currently fashionable: at the moment, the biggest demand is in the areas of mobile device development, cloud computing, rich media, e-commerce, social networking and banking applications, according to recruitment agency IT Job Board.
The other, more significant, shortage, is of people with higher-level skills such as project management or business analysis — specifically, people who can understand the business.
“It’s very important that anyone who works in the technology side of the industry understands the business world and the value that technology can bring to the customer,” says Carrie Hartnell, director of industry strategy at Intellect, which represents the UK technology industry.
Carolyn Pearson, head of business systems at the BBC, says there is a shortage of good people for senior roles. “We’re looking for more rounded senior project and programme managers, and not just for the theoretical ability to follow the process, but for things like emotional intelligence,” she says.
Recruitment’s rush job
Why is it so difficult to find the right kind of people for these roles?
One argument is that it’s a result of poor recruitment practices, particularly in the contract market. Richard Forkan, a director of IT services company Plan-Net, argues that many corporates use third-party organisations working on small margins.
Given a detailed job description, these organisations refer it to large recruitment companies that work as fast as possible to find CVs that match the description, without looking carefully at the candidate’s suitability.
“You’re encouraging them to get as many CVs as they can as quickly as they can from the market, and throw them at the job, so that they get their foot in the door with that role,” says Forkan. “It doesn’t encourage recruiters to say, ‘I’m going to take my time on this, let me look in some places that might not be the norm, and see what’s available’.”
The consequence, says Forkan, is that poor quality candidates are recruited to roles they are unsuited for, while the CVs of highly qualified candidates may never be looked at.
This inability to match candidate to role may partly account for the high levels of churn in the industry. A survey this year by IT Job Board found that one in five permanent employees were planning to change jobs within the next three months, while 40 per cent of contractors were considering a complete change of career.
Perhaps even more startling was the survey’s finding that two-thirds of IT workers were considering applying or have applied for IT-related jobs outside the UK.
Alex Farrell, managing director of IT Job Board, believes that a lot of IT staff are disillusioned by the lack of opportunities in their current roles.
“What they’re not necessarily getting is an improvement in where they work, so they may not be getting an increase in pay or better technologies to work on. They see the jobs market increasing, and think, ‘I’m not getting what I need, therefore I’m going to move’.”
The problem of retention is exacerbated by the fact that employees increasingly have different expectations of working life, says the BBC’s Pearson. “It’s less about jobs for life, and people are a lot more transient,” she says.
The recession has also had an impact on the availability of permanent staff. “Because there have been so many redundancies in the last five years, a lot of people have joined the contract market and earn a lot more money. They can afford to work for six months and take some time off and do something else,” Pearson adds.
Yet some employers still seem reluctant to invest long-term in recruiting and nurturing IT staff.
Thousands of entry-level jobs have gone offshore in recent years, and some multinational companies are even bringing staff from India to the UK via intra-company transfers, rather than recruiting UK graduates.
In May this year, the Commons Public Accounts Committee issued a strong criticism of this practice. Committee chair Margaret Hodge said: “Tens of thousands of IT workers have been brought in through intra-company transfers at a time when UK residents with IT skills are struggling to find work.”
The shortage of entry-level jobs is reflected in the statistics: the proportion of IT professionals aged 16-29 has fallen from 33 per cent in 2001 to 19 per cent in 2010, according to e-skills UK, while the proportion aged over 50 has increased from 10 per cent to 17 per cent over the same period.
But while entry-level jobs are going offshore, more senior jobs aren’t. “There is a perception that it’s a one-way street – everything leaves the UK and nothing comes back in, whereas a lot of firms will offshore some jobs but keep highly skilled ones here,” says Intellect’s Hartnell.
But the lack of opportunities for new IT graduates inevitably has a knock-on effect when it comes to recruiting people at a higher level, according to Karen Price, CEO of e-skills UK.
“When you’re looking for business analysts, you look around and say, ‘Where are they all?’ and you realise, ‘We’ve stopped recruiting, that’s why they haven’t come’,” she says.
“And I think people are recognising that if everybody is wanting to recruit, focusing on experienced hires rather than growing your own is going to lead to inordinate wage inflation and competition.”
So if entry-level IT jobs are going abroad or to people on intra-company transfers, and if IT staff are themselves choosing to work abroad or leave the industry, how is the future shortfall in business analysts, systems architects and project managers going to be met?
Paul Coby, CIO of John Lewis, believes there is a real problem. “If you look at the numbers, it’s not possible for the growth in the IT profession to just come from new entrants and graduates and apprenticeships,” he says.
“It’s really important to take people from other professions or industries that are not growing as fast and to equip them for careers in the IT or telecoms industries.”
Business before bytes
There is a widespread view that skills such as the ability to understand the business and to communicate effectively with others are increasingly valuable at a senior level.
Pearsonsays she already takes this approach. “We come across people who are really red hot in terms of knowing their business area, but they’ve also got a technical aptitude, and quite often we’ll encourage them to come and join us in technology. They often make the best business analysts that we’ve had, because they fully understand the business area.”
It is partly with this aim of attracting people from outside the industry that e-skills UK has set up the National Skills Academy for IT, which provides employees with the opportunity, for a subscription of £95, to study online for industry-standard IT qualifications.
About a third of the current shortfall, says e-skills UK, will need to be filled by people coming back to the profession after a career break, early retirement or unemployment.
At a time when people seem keener to leave the industry than to re-enter it, this may be difficult, and the industry has been slow to adopt practices such as flexible and part-time working that might encourage people to stay in or return to technology.
A degree of optimism
That leaves the other group (and the smallest of the three) needed to make up the shortfall: entry-level graduates. In an effort to make sure new entrants have the right kinds of skills, e-skills UK, in conjunction with employers, has created the Information Technology Management for Business (ITMB) degree.
Currently offered by 14 universities, it aims to equip students with a set of rounded business and IT skills. Employers supporting the programme guarantee job interviews to every graduate, and two universities offering the degree said that 84 per cent of their students had secured jobs before graduating.
The Mayor of London’s apprenticeship programme has encouraged major technology companies such as Accenture and Microsoft to launch apprenticeship schemes.
Capgemini, a heavy recruiter in India and elsewhere, is taking part and will offer school-leavers with A-levels the opportunity, over five years, to take a BTEC level 4 diploma in professional IT followed by an Open University degree in Computing and IT practice, while earning a salary. The initial intake is of 24 students, but the programme is growing.
Anita Tilly, director of HR at Capgemini, sees it as an opportunity to create the kinds of employees needed at a more senior level.
“They will go through a significant investment in soft and business skills training, including commercial and financial awareness, presentation and style, business writing skills, how to build effective relationships and how to work and manage within a high-performing team,” she says. Meanwhile, the company is continuing to recruit new graduates in the UK.
Initiatives such as apprenticeships and the ITMB degree are clearly admirable, and could be just what the industry needs. But on their own, they may not be enough to address the skills mismatch in an industry that has been driven for a long time by the desire to fulfil short-term goals.
In five years’ time, can we expect another report saying that the IT skills shortage has finally been overcome? Probably best not to hold your breath.