Report warns of skills shortage bombshell

The UK's economy could be damaged within a decade unless employers and educators act now to create a new breed of IT...

The UK's economy could be damaged within a decade unless employers and educators act now to create a new breed of IT professionals, warns E-Skills/Gartner study.

Businesses in the UK are facing a shortage of skilled IT professionals which could damage the UK's competitiveness within a decade.

That was the warning from an in-depth study by public-private sector training partnership E-Skills UK and analyst firm Gartner, which was released last week.

The study, based on interviews with more than 3,200 employers, found that, with the recovery in the jobs market in its infancy, employers are already finding it difficult to fill vacancies.

More than 33% of companies with job vacancies for IT professionals claimed to have had difficulty filling them, the research revealed. Of these, 76% said they had been forced to delay the development of new products and services. More than 42% had seen increases in operating costs and 20% had lost business to competitors.

However, these short-term problems mask a longer term imbalance in the supply and training of IT professionals which is threatening to damage the international competitiveness of the UK, the study concluded.

Over the next decade, businesses in the UK will need between 156,000 and 197,000 new entrants into the IT profession each year.

Universities are producing only 8,300 IT graduates a year, leaving a gap that will need to be filled by drawing in hundreds of thousands of staff from other professions and academic disciplines.

There are few signs that employers, universities and the further education system are prepared to meet this challenge. The study argued for an "ambitious, coherent IT skills strategy" that would see employers working much more closely with universities and government to meet the demand.

"The UK is already lagging behind other countries in IT uptake," said Margaret Sambell of E-Skills UK. Employers are telling us that there are 1.4 million users of IT who need to radically upgrade their skills over the next three years. And there is a workforce of 1.2 million whose skills need to keep up with changing technology and business. This up-skilling is not going to happen if we use our current models."

All of this may sound familiar to IT professionals who read the Stevens Report on the IT profession in 2000. That report, the most comprehensive analysis of the state of the IT profession then conducted, reached similar conclusions.

But its publication, just before the biggest downturn in IT for a decade, meant that the widespread support it had generated from employers and government vanished under the onslaught of heavy redundancies and downsizing.

Four years on, with the IT jobs market on the verge of a new recovery, the underlying problems identified by the Stevens Report, far from going away, have assumed a new urgency.

It has become increasingly clear that the growth of offshore outsourcing and the trend for businesses to demand off-the-shelf rather than bespoke software will radically change the nature of the IT profession.

There will be growing demand for IT professionals with the ability to integrate pre-packaged components into complete systems. These services will increasingly be provided by multiple suppliers and will often stretch across a number of departments within a business, demanding greater management skills.

The distinction between IT professionals and general business managers will blur and disappear, the E-Skills study predicted. IT professionals will need to understand more about the needs of the business, finance and management. Business managers will need to increasingly understand IT, feeding the emergence of a hybrid professional with both IT and business skills.

At the same time, the entry of a new generation of youngsters from 2007 onwards, reared on the internet and computer games, will place new pressures on the IT department. This workforce will demand software applications that enable collaborative working and multi-tasking. And these could take over from traditional applications.

"The role of the IT profession is changing and incorporating more business content," said Sambell. "We are expecting more business people to move into IT. Whether you are an IT person or a business person may depend more on your reporting line than on the content of your job."

As this happens, many traditional IT jobs will disappear. Analysts and programmers' positions will increasingly be seen as low-value jobs suitable for outsourcing. With them will go the more traditional career paths. It will become much more difficult for senior IT professionals to learn skills and gain the experience businesses need by working their way up through the ranks.

If the IT profession is to rise to these challenges there will need to be a radical reform in the way employers and the educational system develops and trains IT professionals, the report said.

"Roles that may take us 10 to 15 years to develop may need new approaches in five years. There is going to be increasing demand in these areas. More companies are becoming IT-enabled and it is quite hard for them to develop this expertise," said Sambell.

The E-Skills/Gartner study has no immediate answers, but it is clear that employers, universities and the government will have to work more closely.

There is likely to be a new generation of IT degrees which place as much emphasis on business and interpersonal skills as on technology. IT will need to be incorporated into business qualifications and non-IT related degrees. Further education colleges will be encouraged to offer higher-level training in IT that will meet the needs of employers.

"Employers, employees, na-tional and regional government, unions and educators need to collaborate on an unprecedented scale to meet this challenge and to ensure that the skills the UK needs, the UK gets," said Karen Price, chief executive of E-Skills UK.

The next stage is for employers, government and educators to agree a strategy. E-Skills plans to draw up an action plan, known as a sector skills agreement, which will go out to employers for consultation over the coming months.

Many are hoping that the agreement will finish the reforms highlighted in the Stevens Report. If it fails, the cost to employers and the economy could be high.

IT staffing: what the future holds

  •  Large numbers of people will be needed each year to fill increasingly complex, high added-value IT roles
  • The opportunities for greater strategic benefit from IT, the need to deliver greater return on investment and the impact of overseas outsourcing are leading to a stronger demand for broader and deeper skills
  • Innovative action is needed to address the gender imbalance endemic in the IT workforce
  • IT underpins innovation, competitiveness and service in every sector. The UK has one of the best e-commerce environments in the world, but this is not being matched by uptake by businesses, government and citizens
  • Business managers must be equipped to realise the potential of IT. This is a challenge for leaders of all enterprises and particularly for those in smaller organisations where there may be fewer IT staff
  • Most employees will need more sophisticated IT skills
  • Exclusion needs to be addressed. IT skills are as fundamental as literacy and numeracy. Those who lack them will find their personal and professional lives limited
  • IT skills development requires new delivery methods that integrate work-based vocational and academic learning and take into account the impracticality of releasing employees from work, particularly for smaller companies
  • Government-enabled collaboration with educators and employers is required to create new models of partnership.

Source: E-Skills UK/Gartner


The changing nature of IT: skills for the future       

Growth of e-commerce
IT professionals will need to understand the business drivers of virtualisation and the relevant technologies. 

Remote working
IT professionals will need to develop a secure IT infrastructure to support mobile workers in a diverse range of environments. 

IT professionals will be responsible for moving to an architectural approach built on industry standards and pre-packaged components and services. 

Outsourcing and geosourcing 
IT staff will need to develop new skills, including  business process and supply chain analysis, to manage offshore and domestic outsourcing relationships. Technical skills in integration, security and privacy will become more important.  

Utility computing  
The growth of utility computing will mean that IT professionals in large organisations will be under pressure to deliver greater value and have a deeper understanding of industry processes and standards. Smaller organisations will outsource or buy IT capacity on demand. 

Information overload 
IT professionals will need to develop skills, methods and applications for dealing with vast amounts of data. 

Security and privacy 
Specialist security skills will be vital. 

The rise of the internet generation 
The exposure of the next generation of workers to interactive games and online communities will lead to the emergence of applications designed around collaboration and social interaction, challenging traditional management styles and business cultures. 

Source: E-Skills/Gartner

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