Bill Goodwin looks at the impending IT skills slump and asks what
IT directors and companies can do to make sure they attract the IT
workers they need.
Employers are facing a race against time to find skilled IT staff
as Europe teeters on the edge of another IT skills slump.
Within three years the shortage of skilled IT professionals in
the UK will jump from 220,000 to more than 300,000 as employers
rush to exploit the benefits of e-commerce.
Across Europe, the shortage will reach 1.7 million IT
professionals by 2003, leaving more than one-in-ten job vacancies
unfilled.
The shortages will become so acute that Europe's economic
performance and its competitiveness in world markets will be
undermined. Over the next five years it will cost Europe £500bn in
lost productivity and more than £60bn in lost tax revenues.
These startling conclusions were revealed in research published
last week by IDC, Datamonitor and J@M Associates in association
with Microsoft.
For IT departments the next few years are likely to mean
spiralling salaries and a dramatic increase in poaching as
organisations vie to attract the IT workers they need. Many
organisations will turn to outsourcing and application service
providers. Some will be forced to delay or cancel critical IT
projects.
Public sector organisations, start-up companies, and small- and
medium-sized firms will be most vulnerable to the problems that lie
ahead. With limited funds behind them, they risk missing out on the
benefits offered by strategic information systems, such as customer
resource management and sales force automation. For start-up
companies, the extra venture capital they need to cover future
salary costs may mean the difference between success and
failure.
IT directors will begin to notice the effects of the skills gap
sooner than they think. Demand for IT professionals will shoot up
by almost a million this year across Europe as organisations set to
work on IT projects put on the backburner during year 2000 work. In
the UK demand will reach 190,000 by the end of 2000, leaving a
shortage of more than 20,000 IT professionals.
IT staff with business skills will be in particularly short
supply as more organisations begin to align their IT strategies
much more closely to their business strategies. They will be soaked
up by companies in financial services, travel and the book
industries, that are restructuring to take advantage of the
Internet.
Although growth in demand will slow down from 2000, demand will
continue to outstrip supply. Within three years there will be
significant shortages in several areas:
- A 36% shortfall in Internet-working skills including expertise
in routers, switches and mobile telecommunications
- A 17% shortfall in IT staff with business skills needed to help
companies align their IT strategies to their business
strategies
- A 10% shortfall in applications skills including SAP, Oracle,
Baan, PeopleSoft, and JD Edwards
- A 9% shortfall in client server related skills, including
Windows, Unix, HP's OpenView and Tivoli's TME
- A 3% shortage in mainframe skills, including IBM, HP Siemens
and Unisys systems.
What can be done? There are no magic bullet solutions. But a
"call for action" presented last week by seven major IT employers
including Microsoft, IBM and Nokia calls for a wide range of
initiatives involving governments, universities and businesses. The
group's recommendations, which will be presented at a government
summit on IT skills in Lisbon later this month, will sound familiar
to many IT directors:
- Businesses should offer IT training to older workers, women,
the unemployed and graduates
- IT departments should give staff time off to improve their IT
skills
- Government should provide tax breaks for IT start-ups and for
IT training
- The Government should fund scholarships for IT
students
- There should be an advertising campaign to improve the image of
IT
- Universities should offer business courses for IT
professionals
- Universities should make sure they teach IT skills industry
needs.
But IT departments do not have the luxury of waiting for
long-term initiatives. They must act now if they are to avoid
running into problems in two or three years' time.
IT departments should start building up the teams now with the
skills required for the next generation of systems. This will mean
treating people as assets by offering loyalty payments and
performance bonuses.
For some companies it will mean offering apprenticeship
programmes and forming closer links with universities and
colleges.
If employers haven't secured the people they need by the end of
the year they risk not being able to secure them at all.