PracticeConsultingFeature – Skills Crisis – How far do you have to go to find the right person?

Feature - Skills Crisis - How far do you have to go to find the right person?

Even in the current economic downturn there is constantly new evidence of an IT skills crisis, albeit one that only applies in certain areas.

The skills shortage is a recurring theme in IT. The problem was first identified over 30 years ago when the embryonic computer industry realised it had no teachers to educate its customers in how to use its products. And with each technological advancement, a skills shortage has always followed close behind.

Even in the current downturn there is constantly new evidence of a skills crisis. A recent report from the e-skills National Training Organisation revealed that the computer industry will need to attract up to one million more skilled IT professionals within the next five years. The main message from the NTO’s research is that the industry must look beyond traditional recruitment sources and methods if it is to fill the growing skills gap.

Similar reports have appeared regularly in the press over the past 12 months from research organisations such as The European Information Technology Observatory, The International Labour Organisation, and the Recruitment and Employment Confederation. Each survey differs in detail, but all agree on one thing: the IT industry must start to acknowledge these skills shortages and begin putting new HR strategies in place if we are to avoid a major crisis. A recent report from the EITO claims that the UK will need 620,000 more IT professionals by 2003. A lack of such skilled individuals, it says, will hold back the economy and the growth of e-business.

The conundrum

Other trends reveal contradictory signs. The most recent Report on Jobs from the REC shows a falling demand for permanent IT staff. While the permanent IT sector had a number two ranking last year, this year it was in joint last place. The general economic downturn has left contractors in an uneasy position too. In fact a number of surveys have shown that the market for permanent IT staff is being flooded with contractors as all hope of an upturn in the economy is lost. Jonathon Bourne, head of vertical markets at Elan Computing, says: “On the contract side there’s a massive slowdown, especially in investment banking, so consequently we’re not struggling to find anyone from the generic skills sets.”

There is also a plentiful supply of newly qualified graduates struggling to find work in a highly competitive job market, he says. “But we do have trouble finding people who have four years or more experience in VB, Java and C++,” he adds. Among such job-hunting professionals, the idea of a skills shortage is hard to believe particularly when many have been made redundant from telecoms, electronics, or investment banking.

The truth

So what is the truth behind the supposed skills shortage? One explanation is that there are shortages in particular skill areas. The latest REC report reveals a shortage of web designers, CAD designers, and software development people particularly in Java and Ingres. Other recent reports have shown a huge shortage of SAP skills, networking skills and C++ skills. It is possible that these specific shortages persist while the rest of the industry remains unaffected.

Other explanations point at differences in geography. According to John Butterfield, director of Best International, there has been a huge number of IT jobs in Scotland, but because people are not always willing to relocate, the market is capable of maintaining simultaneous gluts and shortages. In Butterfield’s view, however, the skills shortage is a permanent characteristic of the IT industry: “There will always be a skills shortage in the UK because there are just not enough people being trained. The skills shortage is driven by changing technology. If there was just one computer system and one language there would never be a shortage.”

The causes

According to the e-skills NTO, the growing shortage of IT professionals could be eased by addressing the poor image of IT. The research on image undertaken by MORI showed that among young people, particularly women, the IT profession is perceived as highly technical, boring and suitable only for whizzkids who have no interests outside of work and possess no interpersonal skills. This negative impression dramatically reduces the number and variety of people considering IT as a career, with a massive 74% of new entrants being male, under 35 years old and from the South East.

“One of the things we discovered in our research is that the image which defines a job in IT is set very early on, ie in the early teens. And at that point computers are dominated by boys,” says Terry Watts, chief operating officer of the e-skills NTO. “We need to re-educate young people about what IT is. One of the important things is to show them that a computer is a tool you can use to do useful things. Then they can start to learn about all the different types of jobs in the IT industry.”

As a result of its findings, the e-skills NTO has now launched a campaign to broaden IT recruitment into non-traditional groups including school leavers, women and people considering a career change. An impressive band of heavyweight IT employers including IBM, Logica, Microsoft, EDS, Intel and Ericsson have signed up to an e-skills Employers Charter committing them to working with the NTO to fight the skills shortage.

Another government-sponsored project is SFIA, the Skills Framework for the Information Age which sets out job definitions to be used by employers and recruiters when advertising vacancies. The idea is to more clearly identify the skills required for particular positions like system administrator or software developer. The set of definitions was developed by major IT employers including BT, Orange, EDS and IBM, partly to be used as the basis for research into the state of IT skills in the UK and partly to be used as a set of credentials to authenticate technical competence. Originally a UK project, SFIA will be promoted internationally as a set of standards for best practice.

The training strategy

Just how much impact such government-led projects will have on the skills crisis is questionable. An initiative launched in July shows a more practical approach to the problem. The scheme, labelled Ambition IT, aims to find unemployed people technical roles which pay between #15,000 and #20,000 a year. A real acknowledgement of the skills shortage, the scheme will receive more than #50m over three years and will run in five pilot areas: London, Liverpool, South Yorkshire, Manchester and Edinburgh. Major firms will be involved in designing the content of the training courses so that skills can be tailored to the needs of employers.

More positive developments have also emerged in the HR policies of large corporations over the past year. A report from research firm IDC reveals that the economic slowdown is boosting activity in IT training. It postulates that as global economic growth slows, and the need to redefine business models continues, so training is identified as a critical part of the business and organisations become more willing to invest in their workforce.

Firms involved in leading edge technology such as mobile commerce have invested heavily in training. E-consultancy set up its own training academies after struggling to find mobile specialists.

“We realised we were going to get a lot of wireless Internet projects and because the technology was in an embryonic state at the time, we realised there was no training available,” says David Eastman, European vice president of m-business. Now the company has training academies in Amsterdam, New York, London and Dallas. Eastman admits that when the training academies were set up, the company was very concerned about staff retention. “But ultimately it’s the risk you have to take. We’ve found that if you give training and keep people’s skills up to date, you are more likely to attract and keep the right sort of people,” he says.

Recruitment agencies are also offering training as part of their service. “We offer a free training package to contractors called Smartforce which can be accessed over the web,” says Elan’s Bourne. “There are over 1,500 courses online in just about every area of IT. The service is free and it offers a real incentive for contractors to retrain.”

Re-training is a big issue in the fast-moving IT industry and we are now beginning to see collaborative developments between industry and educational institutions. Industry validated Masters degrees like those offered at Sheffield Hallam University include technical training in SAS, SAP, Oracle and e-business.

“These courses are aimed at people who have been in the industry for a few years and want to develop their careers,” says Sue Morton, head of postgraduate studies at Sheffield Hallam. She says some postgraduate students are sponsored by their employers, but most are self-funding. “We find that selling companies the notion of sponsoring people up front is very difficult, not least because they will lose that person for nine months,” she adds. This year all MSc courses will be offered on a part time basis, opening up opportunities for employee training schemes.

Such collaborative training projects between the IT industry and education are undoubtedly a step in the right direction but the degree to which employers are willing to sponsor such initiatives is still questionable.

Daniel Elkins, head of marketing at recruitment ASP The Skills Market, believes that the IT industry requires a fundamental culture change if the skills shortage is to be properly addressed. “Retention is key at the moment and most firms realise that it’s cheaper to train people than to replace them, but they still have a long long way to go,” he says.

According to Elkins, the long-term solution to the skills crisis will require much more than a few technical courses. In his view most companies have not yet fully embraced their training needs and are inclined to look at training as an extra expense rather than as a fundamental path to building infrastructure. “The number one reason that people leave a company is that their careers are not being developed, and the learning they need to do now is not just in IT. They need business and people skills,” he says.

The findings from the e-skills NTO certainly echo this view. Watts comments: “The thing I hear from employers all the time is that IT graduates are not appropriately skilled. Computer science courses do not necessarily produce the skills which the industry needs, and we’re working with educators to try to change this.”

Simon Heaton from the Graduate Recruitment Company believes that the landscape is changing as skill requirements become broader. “This year we’ve seen companies willing to take on graduates with non-IT degrees as long as they show an aptitude for technology,” he said.

In Heaton’s experience, a combination of business and IT qualifications in the form of a degree and MSc is also becoming a popular choice for employers, but budgets are tight and many firms insist that graduates have at least six months’ experience. “Managers have to justify every person they hire, often not just to their immediate seniors, but to the board,” he says.

The future

The contradictory trends in the current skills market lead to a confusing picture. While the downturn has led many firms to focus on developing their permanent staff, it has also led to widespread redundancies. Peter Cheese, senior partner at Accenture, says: “Retention is clearly a core issue but in times of recession firms are also looking at cost cutting. The challenge for firms is to understand where they have critical skills and where they have a glut, and to manage them effectively.”

As far as future development is concerned, Cheese points to three major HR challenges. “Demographic shifts which will mean that less people will be available. Second, there’s an attitudinal shift – a belief that it’s a life of jobs rather than a job for life, so getting people to be loyal is hard. And third, there is an increasing diversity of skills required and an increasing pace of change.”

And we may not be able to solve all the problems at home. “We are restricted by demographic factors, and one of the key routes to better HR management will lie in building alliances with organisations in other countries,” he says.

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