Skills crisis set to hit Europe

Bill Goodwin looks at the impending IT skills slump and asks what IT directors and companies can do to make sure they attract the...

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 [email protected] 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.

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