Technology – Foreign IT staff flood in.

Almost 30,000 foreign workers have been brought into the UK in the past 18 months to fight the IT skills crisis.

Home Office minister Angela Eagle revealed that, in the first five months of this year, 10,700 applications were granted to IT professionals. Some 18,259 work permit applications were approved last year.

‘Like most developed countries, the UK continues to experience a shortage of some skills in the information technology sector,’ Eagle told parliament.

The country will face a shortage of 620,000 IT staff by 2003, with the biggest shortage in e-business skills.

‘Bringing in contractors is a short-term fix, but government and industry really need to be working on developing an indigenous workforce with the appropriate skills. It isn’t a trivial task,’ said John Eary, head of the NCC Skills Source Consultancy.

The Home Office does not make projections for the number of work permits it will allow.

‘Each case is judged on its own merits. It has to be demonstrated that there is a need to bring these people in rather than use UK staff,’ said a Home Office spokesman.

Eary believes most of the incomers will be employed by vendors and services companies because they have more experience of dealing with contractors.

Meanwhile, UK IT and networking contractors are pricing themselves out of the market as companies turn to India for cheaper in-demand skills.

Organisations under pressure to cut costs while maintaining critical software development programmes are hiring experienced Indian engineers rather than paying over the odds for British workers.

Indian IT professionals experienced in Java and Microsoft.Net offer their services for around #150 per day, compared to #400 per day for UK contractors, or the #600-#1,200 rates charged by UK consultancies.

Simon Denison-Smith, chair of the Computing Services and Software Association Offshore Forum, said: ‘Twelve months ago the main driver to go offshore was the shortage of UK skills.

‘But with the fall of the dotcoms and the general downturn in the IT sector, companies are once again being forced to look at the bottom line.’

Salaries for skilled IT staff are escalating and Denison-Smith believes companies can’t afford to pay inflated wages.

Business software company the Lanner Group is one organisation that has turned its back on British contractors and is now using offshore specialist Rave Technologies.

Indeed, the company claims that it pioneered the offshore development model.

David Jones, marketing director at Lanner Group, said: ‘We started to work with Rave last year on web-based projects, because we needed fast access to the right skills. Cost is important, and we made savings of up to 30% on each project.’

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