Do we or don't we have a IT skills shortage in the UK?

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Westminister eForum thinks so.

I received an invite to seminar about how to address the UK's IT and computing skills gap from the Westminister eForum . It said there is an estimated shortfall of half a million IT professionals in the UK economy.

When writing about IT outsourcing you cannot avoid writing about offshoring. And when you write about offshoring you cannot avoid getting into a debate about the availability of IT skills in the UK.

There are basically two camps. There are the IT workers and employee groups that say there is not a shortage of IT skills in the UK but there are thousands of unemployed IT professionals.

Then you have the businesses using offshore services that say they cannot find the skills in the UK.

There is lots of evidence to support the claim that UK IT professionals are struggling to get work as a result of the increased offshoring of IT work. For example the Higher Education Statistics Agency (HESA) found that Computer Science graduates are the largest group of unemployed graduates in the UK. Its figures from July revealed that 17% of 2009 computer science graduates were unemployed. This is the highest and the average graduate unemployment is 10%.

So if we are to have a reasoned debate on the availability of IT skills in the UK we need to have a clear picture of the skills available. Are they in short supply or not?

15 Comments

As the piece says, we have a surplus of CS graduates. Computer Science is not IT, they are different disciplines, and our education system is producing too many CS graduates and not enough IT ones.

This though is only part of the problem - the UK has a significant population of unemployed IT workers, not least because employers are in some cases unwilling to pay a fair rate and prefer to offshore to use cheaper resources in cheaper economies - globalisation is a major problem for IT workers. The skills argument is IMO commonly a false defence to give finance-driven directors an excuse for offshoring work without seeming unpatriotic. There are a few cases where the skills argument is true, but only in very tight niches - development of most business systems using Microsoft or Unix technologies is unlikely to be constrained by the availability of UK sourced skills.

Unfortunately use of cheaper offshore resources is often a financially unsound move; the additional overheads of senior contract managers in both customer and supplier, and the inefficiency of production overseas caused by long lines of communication, cultural mismatches and different supplier and customer perceptions of expectations mean that offshoring work is often uneconomic - the labour cost per hour may be halved, but delivery takes longer, demands greater overheads in requirements capture, specification and management, needs more development iterations, etc. etc., with the result that offshored development can cost just as much (or more) than onshore development, whilst taking longer to deliver and thereby delaying implementation which of itself introduces opportunity losses to the business.

At the end of the day it's not going to change soon though. We cannot expect accountants to understand the practical constraints of developing IT that is to be used by humans, they don't have the education or the skills required - these are in the domain of IT professionals.

There is also a great social cost to offshoring, and in my personal opinion as both an IT professional and a company director I cannot easily justify the benefit of savings that can be made by well-run offshoring against the cost of taking money out of the local economy, away from my neighbours and customers, and instead spending it in some remote economy that has little or no use for the product of my company and its workers. In many, possible most, cases, offshoring is poor CSR and just does not compute.

IT is an whole industry not just a job title. Rolls Royce has been unable to recruit Sharepoint people during the whole of 2010. They were willing to take on people with few concepts and train them but no luck. Now dont bring out the second execuse of low salary. They are offering a better than decent package.

Actually, you need to a bit more precise in your questions, Karl.

For example, here are some questions you could ask IT staff about the so called "skills shortage":

* How long have you spent out of work in the last 5 years? How about the last 10 years?
* Do you have any of the skills that usually feature highly in CW's lists of skills in demand e.g. SQL, Java, Oracle, C# etc?
* How many IT jobs has your organisation created in the last 2 years?
* How many IT jobs has your organisation lost in the last 2 years?
* How many IT jobs has your organisation moved offshore in the last 2 years?
* How many UK-based graduate trainees has your organisation taken on in the last 2 years?
* How many IT staff has your organisation brought in from outside the UK in the last 2 years?
* What proportion of these onshored staff actually have the level of experience and skills you would expect for these roles?
* If you have worked with offshore suppliers, do you think their staff really have better skills and experience than UK IT staff?
* Do the onshored/offshore staff used by your organisation provide rare specialist skills, or do they mainly provide entry-level "cannon fodder" skills?
* As UK employers have been complaining about "skills shortages" for years, one would expect this demand to be reflected in IT salaries, so has your salary increased significantly year on year over the last 5 years?
* As UK employers have been complaining about "skills shortages" for years, one would also expect them to invest in developing the skills of their staff, so how much training has your employer provided for you in the last 5 years?
* Do you think you will still be working in IT in 5 years' time? If not, why not?

As you have discovered in your own blog, employers - including Indian service providers who claim to be looking for European staff but never actually hire any - constantly complain about "skills shortages" when they simply mean they prefer to hire cheap inexperienced foreign labour on salaries that no UK-based worker could live on because the UK-based worker has to pay UK taxes, pensions, housing costs, travel costs, student loans etc. I have been listening to UK employers whining about "skills shortages" in the IT industry for more than 20 years. And in all that time, I have hardly ever seen any private sector UK employer invest so much as a penny in training their staff or developing their skills. The incredible thing is not that there may or may not be a shortage of IT skills in some (mainly very specialised) niche areas, but that the UK IT industry still has so many highly experienced and skilled workers in the first place. No thanks to UK employers or UK governments.

There are no shortages of experienced and recently graduated IT workers in the UK, and many tens of thousands are unemployed. However that does not mean that there are no skills shortages or vacancies.

IT changes so rapidly that there are always certain skills that in demand. Like any other market, the price for these skills should rise, people retrain to fill the gaps (or employers retrain their staff), and any shortages in a particular skill disappear. However the market for IT skills no longer functions properly within the UK due to offshoring and onshoring, and employers have lost any incentive to retrain staff or recruit and train graduates.

The real indicator of a shortage is rising prices. IT salaries have been steadily declining in real terms over several years.

There are IT vacancies and some employers do have problems filling them. This year's Nobel prize for Economics was for research on why unfilled vacancies will always exist even when there are unemployed people with the skills to do the work, because labour/job markets are never 100% efficient.

Even in a model were there are people available to fill jobs, there will always be vacancies due to people moving jobs. For example, if there are 1 million IT jobs and IT workers change jobs every 3 years and it takes 3 months to fill a position, then there will be over 80,000 advertised jobs just as a result of people moving between jobs.

I think Steve and Matt have it absolutely bang on. There is, bar niche roles, no skills shortage and if there is one it is a home grown self fulfilling prophecy.

You cant complain about having a skills shortage when you're not training your own staff.

CodeCruiser: "Rolls Royce has been unable to recruit Sharepoint people during the whole of 2010. They were willing to take on people with few concepts and train them but no luck."

Obviously your experience of the IT "skills shortage" is very different from that of most of us in the industry. And RR is certainly an unusual employer in offering to train candidates for a job, especially these days. Did nobody apply for the job, or did RR reject all those who did apply, and if so, why?

More generally, I'd be interested to know how companies claiming they cannot find IT staff actually go about recruiting staff. For example, CW regularly has reports about major employers shedding IT jobs by the thousand. So why don't potential employers contact the HR departments of those companies and let them know they are hiring? Or if they are recruiting for trainee roles, how and where do they advertise e.g. do they contact universities/colleges directly?

If companies are recruiting for particular skilled roles, what other possibly irrelevant filters are being applied to exclude potential candidates? For example, I was involved in interviews at one organisation a few years ago, where they had doubts about one candidate who did not have a degree but had lots of relevant experience. Thankfully they recruited him in the end, as he was far and away the best candidate, but how many other good candidates do not make it through the filtering process?

And many of us are all too familiar with the buzzword-bingo approach of many recruitment agencies who use largely arbitrary criteria to filter out candidates, because they have a thousand CVs in their in-box and do not understand how to identify good potential candidates any other way. If you hand control of your recruitment process over to an agency, you may never get to meet the kind of candidates you really need.

Also, what are the genuine shortage skills, and what opportunities really exist for experienced out-of-work IT staff to get into these roles? There are plenty of skilled, experienced but unemployed software developers in the UK, but perhaps there is a shortage of skills in some analysis or admin-type roles for example. If so, why is it that employers and recruiters are apparently unable to identify good candidates to cross-train, as appears to be the case with RR? Do some recruiters exclude candidates who are already out of work, as anecdotal evidence would often suggest?

Recruiters and employers often have unrealistic expectations e.g. unlikely combinations of unrelated skills, long wish-lists of largely irrelevant skills, or insisting on 5 years experience of something that has only been around for 2 years, or they may apply arbitrary selection processes e.g. ignoring years of relevant experience with similar technologies/roles, insisting on a Computer Science degree, excluding people who would have to re-locate, refusing to accept evidence of relevant skills acquired outside the workplace etc.

In addition, the whole market is increasingly swamped by relatively inexperienced foreign IT workers e.g. recent recruitment efforts at one employer seemed to bring in a lot of apparently impressive CVs from Indian applicants who were completely unable to demonstrate these alleged skills/experience when they turned up for interview. Of course, UK/EU applicants can be equally dishonest in their CVs, but when recruiters already receive hundreds or even thousands of CVs for a given role, allowing thousands of foreign applicants to swamp the selection process just makes it harder to spot the good candidates amongst the dross.

My own experience (a total of 4 years out of work in the last 10 years) is that it has become surprisingly difficult to find IT work in the UK, despite the so-called skills shortage, no matter how experienced and well-qualified you are or how flexible you are prepared to be: I have even offered to work for free on occasion simply to gain new skills. If it were just me, I'd simply have to re-examine my job-hunting strategy (as I do regularly), but I have met dozens of experienced, highly skilled IT workers who have had similar experiences in the last few years.

This is a fundamental issue in our industry, and UK employers and politicians have done little to address the problem and a great deal to make it worse.

If you want a job doing, might as well do it yourself. So if anybody wants to answer the questions I raised above, they can do so by filling in the format the following link:

Skills shortage questionnaire

If you have a public email address at Computer Weekly, I can pass the results on to you if we get a reasonable response.

Software is now bein used in almost everything, from cars to aircrafts to mobile phones and what not. There is also going to be openings coming up in the health care related areas. From drug-design to inducing efficiency into the hospital management systems, all require IT. Also with the baby boomers retiring and requiring more doctors and nurses to look after them in old age, would require people who can design, maintain, improve and work on health-care robotics. I myself work for a company that is into health economics. Rather than whining people should focus on what in IT would be IN in the next few years, given the demands of the economy, changing demographics and improving technology and get the required skills rather then getting the broader degrees such as Computer Science, which may or may not give the desired rewards.

There has been a significant decline in IT training in the last decade according to e-skills research: (you need to register to see the document)
http://www.e-skills.com/Documents/Research/Regional-datasheets/UKRegionaldatasheet.pdf

Page 8 shows the "Incidence of training by industry and Occupation in the UK 2001-2009" and for "IT & Telecoms professionals trained in the past 13 weeks" this has dropped from 35% in 2001 to 23% in 2009. Possibly there are no skills shortages and business has approprately cut training; or the business response to a shortage has been to cut training; or business is creating a shortage by cutting training.

@ArgieBee:

60% of the 35 respondents (so far) to my questionnaire report that they have received no training at all in the last 2 years.

Sorry, that should have been no training at all in the last *five* years.

There is almost no IT skills shortage based on the latest E-skills report:
"the incidence of ICT related recruitment difficulties and ICT skills shortages both remained at historically low levels owing to the large number of ‘ready candidates’ in the market"

"an historically small proportion of employers were still experiencing recruitment difficulties at the beginning of the year (3% according to respondents to the e-skills UK Employer Survey, Q2.10)"

http://www.e-skills.com/Documents/Research/General/e-skills_Bulletin_Q3_10.pdf
(you need to register to get it)

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This page contains a single entry by Karl Flinders published on January 6, 2011 2:55 PM.

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