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When the government’s furlough scheme closes today (30 September), it will bring a remarkable chapter in public and business life to a conclusion. Nothing quite like it has been seen before. It has provided such effective support to thousands of companies and millions of employees across the UK that it has limited joblessness to just 5.2% during the sharpest contraction in three centuries. Truly an extraordinary measure for extraordinary times.
But now that the scheme is finally coming to an end, what does it mean for the employment market and specifically the tech sector?
It has been estimated that there are about 820,000 people still on full-time furlough. Some of these are likely to be retained by their employers and put back onto the normal payroll – but the likelihood is that many of them won’t. There could be an influx of several hundred thousand job seekers onto the market.
This may prove welcome for many employers, given that vacancies are riding high. Across many sectors, companies simply can’t find the talent they need to fill positions. The Recruitment and Employment Confederation (REC) recently found that there are a record 1.9 million active job adverts right now, with 223,000 job ads placed in a single week. Figures released last week found that UK tech job listings are up 42% compared with pre-pandemic times.
Some of the most acute shortages have been well publicised – HGV drivers being perhaps the most critical. But not so very far behind these, according to the REC, come nurses and then programmers and software developers.
Skills shortages in tech have been a problem for many years. But they have got worse through the pandemic, as the need to shift operations to digital platforms has created a huge spike in demand for a wide range of tech roles, including cyber security specialists, software developers and data scientists. This issue has been compounded by some tech professionals who were born overseas but working in the UK going home through a combination of Covid-19 and Brexit. The likelihood is that many of them won’t come back.
These factors create both a short- and long-term issue for the tech sector. Most pressingly, businesses need to find people with the pre-acquired skills right now who can hit the ground running and keep propelling the digital revolution forward. Those coming off furlough this week simply won’t be qualified for this.
But the longer-term and systemic skills challenges that face the industry also have to be addressed. It’s not as urgent a priority – but it will become urgent if not dealt with. For this, many people coming off furlough may be potential candidates.
It is important to remember that there are all kinds of roles in tech – it’s not just a collection of rocket scientists. Helpdesk roles, support services, chatbot managers, more basic coders – there is a wealth of opportunity for people with transferable skills.
For example, many of those currently working in hospitality, leisure and tourism who may face the prospect of unemployment from 30 September are likely to have excellent people and communication abilities. There could be many roles within tech that are very compatible with their skillsets.
Government could play a role here, too. We often talk about the need to create a circular economy in which everything is connected and sectors flow into and support each other. There is an opportunity here to reinforce this.
The government will know which companies still have significant numbers of people on furlough – and could liaise with them to raise awareness of the “digital bootcamp” scheme that has been launched, providing intensive training in digital and technical skills to those with the right aptitude.
Apprenticeships are another pathway. Employers are increasingly recognising these as an effective way to develop new talent and to bolster diversity. Preliminary data from our Digital leadership report, based on the largest IT leadership survey in the world, finds that nine out of 10 firms surveyed are planning to either increase (39%) or retain (51%) their present apprenticeship numbers. More broadly, the same proportion (91%) are expecting their technology headcount to increase or stay the same this year.
The need to bring more talented individuals into tech is clear – and this has to be a fix for the skills of the future, not just the immediate needs of today. For that reason, the end of furlough could present some opportunities for tech employers. It may not create a wave of oven-ready technical specialists coming their way, but there is little doubt that there will be many individuals becoming available who have the soft skills and the potential to forge a rewarding and successful career in the industry.