Tackling the IT skills shortage

October 2013

CrowdIt’s acknowledged that IT has a crucial role to play in the UK’s future prosperity. However, with intensified competition from Europe and the fast emerging Asian economies, Britain must have the right level of skills, competencies and abilities to compete globally and sustain economic potency says Zahid Jiwa, OutSystems VP UK& Ireland Sales.

The problem is there are serious concerns over the IT skills shortage, which remains acute. For businesses this is not good news. A recent survey by the CBI showed that 39 per cent of firms are already struggling to recruit workers with the advanced technical STEM (science, technology, engineering and maths) skills they need, and 41 per cent of firms believe that the shortage will persist over the next three years.

In the software and applications development space there is a shortage of developers, especially in the UK where the digital economy is growing exponentially.

We recently held a dinner debate event with 10 CIOs who joined us to discuss how the skills shortage is affecting their organisations and what business can do to tackle the challenge.

The discussion was led by Charles Ward, former chief operating officer of the UK tech industry body Intellect and current lead of growth strategy consultancy the Charles Ward Consultancy. He stressed that organisations must take the skills issue seriously, and to avoid a negative impact to their business for the foreseeable future, they have to act now.

As the software development skills shortage intensifies, many western organisations are also offshoring positions at developing country wages to plug this gap and to avoid paying inflated salaries for domestic employees. However, this presents a somewhat false economy as the problems that arise due to language, cultural and time zones differences often make the promised raw cost savings quickly evaporate.

As a matter of fact, companies who outsourced their IT development in the last decade had realised that they had created a long-term pain. They become reliant on the outsourcer who has built their applications, owns their code and can charge a premium for any maintenance or enhancements that need to be made.

As a matter of fact, recent research by Deloitte showed a reversal of the outsourcing trend and that 48 per cent of respondents had terminated the outsourcing agreement early.

Outsourcing is not a silver bullet to the skills shortage issue. Instead, businesses should look to retain the people and resources that are differentiating them in the market and providing competitive advantage. The more enlightened organisations are now looking to hold on to the ‘brain side’ of IT and only continue to outsource commodity IT. 

As IT departments continue to struggle to do more with less, the IT skills shortage rumbles on. So what should organisations be doing today to address short-term requirements?

Here are a couple of thoughts:

  • Understand where and when to automate - with 80 per cent of IT spend still focused on ‘keeping the lights on’, freeing developers from low level, low value technical tasks will raise productivity and improve business efficiency.
  • Leverage outside resource where it makes sense - while at the same time ensuring that you don’t become dependent on outsourcing relationships where you can be held to ransom.
  • Invest in staff training - ensure that your staff are equipped and able to cope with the demands of the business and skilled to build innovative applications.

IT obviously offers the UK continued economic opportunities. While the IT skills shortage looks set to persist, organisations can take practical measures today to compensate.

Realigning the focus and direction for IT developers to enhance productivity within any organisation is critical, as is approaching software development in a new way. IT teams should look to automate whether possible. This is where high performance application development platforms for delivering web and mobile applications can really help.

By harnessing the power of automation and focusing on retaining the ‘brain side’ of IT, organisations will be better placed to innovate for the business and drive competitive advantage.

So regardless of whether you believe the skills shortage will impact on your business or not, by adopting this approach you will find you have a more flexible and adaptive environment better able to meet the demands of the business and as a consequence a more motivated team of developers.

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Comments (24)

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  • 1
    Graham Lerant wrote on 5th Nov 2013

    There is no IT skill shortage in the UK.
    There is however an unwillingness for businesses to pay the going rate for those skills.
    You are part of the problem, not the solution - you should be ashamed of yourself.

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  • 2
    Mo Hassan wrote on 5th Nov 2013

    In my view in recent years companies have been less open to recruiting individuals will limited experience and skills and developing them, there seems to have been a surge in companies expected candidates to meet most if not all of their skills requirements with very little appetite to offer training to meet the shortfall in skills.

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  • 3
    Tom Grieve wrote on 5th Nov 2013

    Modern-day management jargon apart, this could have been written at any time over the past 40 years.

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  • 4
    John Thompson wrote on 5th Nov 2013

    I agree with Graham ... time and time again I have been told I am too qualified as a software engineer, and yet I remain unemployed five years after being made redundant. I am not the only one who is running our own companies in response to the lack of employers wanting to pay for professional skills.

    Each time I visit a school as a STEM Ambassador there are very few young people with my enthusiasm for the subjects.

    I am still excited about the future though!!!

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  • 5
    M J C Brown wrote on 5th Nov 2013

    I agree with Mr Lerant that there is no skill shortage. My experience is similar to that of Mr Thompson.

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  • 6
    Mr S B Tarry wrote on 5th Nov 2013

    My first job over 10 years ago was as an internal analyst programmer. Understand the business, develop engaging systems for the business. Then came along out-source so I became a business analyst. Why go back to IT when all the developers are based in India? So why would any newcomer even think developing systems for business is the right line of work when they go overseas for cheap development? There is no incentive.

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  • 7
    amy wrote on 6th Nov 2013

    I agree with John Thompson's comments that there doesn't seem to be much enthusiasm for computing with the youngsters in schools. However, based on the comments above i.e. lack of jobs as a result of out-sourcing and lack of appropriate pay when in employment then how does one sell it to them as a future career? Does this also mean that the current curriculum change is pointless?

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  • 8
    Karen wrote on 6th Nov 2013

    If all companies are "unwilling to pay the going rate" maybe it is the going rate that is partly at fault?

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  • 9
    Ian Jones wrote on 6th Nov 2013

    What skill shortage? I know laid-off IT people who would welcome work. Every year or so, as my firm starts its next round of offshoring, I wonder whether I will join their ranks.

    I think the key phrase in the article is "...avoid paying inflated salaries for domestic employees". Business regards IT salaries as "inflated" hence it tries to cut them out when it can.

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  • 10
    Mobeen Zafar wrote on 8th Nov 2013

    There is no shortage of IT people. Problem is some managers are expecting too much and they cant extract the right information from candidates from their applications or interviews. In the same way the candidates arent putting enough effort into their applications and their interview skills are terrible. I have interviewed some candidates where their CV doesnt reflect what they say. Seems like there are 2 people applying for the role.

    Its simple; be honest, do your own CV, cut the rubbish and practice your interview skills.

    There is also the training and salary expectation levels. We arent in the boom anymore and experence sometime doesnt mean the candidate will get 50% more than the lesser experence candidate anymore.

    Candidates are expected to have multiple up to date qualifications and heavily invest in themselves to have a chance in this industry. Its pretty dissapointing as experience should count for more surely.

    Its a tough industry as we cant afford to invest too much in training upfront as the job needs to get done. Gone are the days when there were enough staff to assist you as you get trained up. I expected a new starter to be up and running within a month 8 years ago. Now i give it 2 weeks tops.

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  • 11
    Ifan Jones wrote on 11th Nov 2013

    Lots of good comments here - matches up with my own experiences.

    More of a marketing than factual article though- not sure it's what I pay my BCS subscriptions for.

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  • 12
    Quentin Slater wrote on 26th Feb 2014

    As an IT manager at a university in the USA, I can say that the IT staffing issues are not localized to the UK. Finding educated, enthusiastic, motivated staff is a challenge. Let's face it, money is a motivator to work in IT, not the preservation of humanity. If you want good people they're going to cost you. Outsourcing may have saved pennies on the pound in the nineties but have you seen inflation in India?

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  • 13
    Michael Bateman wrote on 27th Feb 2014

    I agree with the comments above stating there is no skill shortage. There is none. There is a shortage of highly skilled professionals willing to work for peanuts. Is that what they mean by a shortage?

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  • 14
    Steven wrote on 27th Feb 2014

    The skills shortage myth is put about chiefly by those with a vested interest in importing cheap labour from overseas.

    I am a very capable and highly motivated software developer with a good computing degree and 15+ years experience. I am in employment but in a lacklustre "dead-end" job. I have been trying to move my career forward for about five years now and have applied for dozens and dozens of vacancies but I am unable to secure a job with better prospects simply because I don't have enough of the current buzzwords on my CV. I've been written off by the IT industry half way through my career.

    As a developer I am precluded from applying for 90% of the advertised vacancies because I don't have some 'essential' X or Y experience. Surely the whole point of getting a degree is to demonstrate that one can learn quickly and under pressure? I have seen some roles advertised for over a year for which I have been rejected and could quite easily have slotted into.

    Employers need to stop being so prescriptive about their requirements and start looking at peoples' capabilities and success stories, regardless of the technologies they have used (often not their choice anyway).

    And let us stop pigeon-holing people into industries too - just because someone works in finance, why shouldn't they work in retail or medical or embedded systems? What is wrong with some cross-fertilisation of ideas between industries? Isn't that how evolution works?

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  • 15
    John Lilley wrote on 27th Feb 2014

    20 years of sending jobs offshore and then allowing low-paid workers to come onshore has killed IT as the well paid career it used it be. Look at the job adverts, there will be a long list of key skills that a new graduate cannot possibly have.

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  • 16
    Michael Hales wrote on 28th Feb 2014

    Totally agree with all of the coments above.
    What skills shortage?
    Would really like to see some of these people bleating about a skills shortage being confronted with a pile of CVs and asked "Why didn't you hire these people?".Surely the money would be better spent teaching the HR departments how to recognise good talent when they see it!!!!

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  • 17
    Steve Dick wrote on 28th Feb 2014

    It's refreshing to see a more compelling stance on the myth "IT skill shortages in the UK". Over the last two decades I have seen first hand the movement in the financial industry towards using overseas outsourcing.

    I am not against outsourcing if it will improve efficiency, reliability, as well as providing some cost benefits. Though what I have witnessed, through wave after wave of redundancies, in the medium term (forget long term) this does not result in the IT utopia that seems to be evangelised. Also, the view outside of IT is that only the "IT deadwood" have been fired or made redundant. From my experience over the last 8 years is that this is far from the reality, many highly skilled with relevant experience are let go.

    Similarly to Mr S B Tarry, I have now recently moved into Business Analysis from being a developer. I believed I needed to adapt to the ever increasing use of overseas resources by enhancing my own skill set.

    I do get very frustrated with what I believe is the flippant use of the term "IT Skill Shortage" in recent time, as this only give false credence to company executives (and I would say even to the sales departments of the outsourcing outfits) that outsourcing is the way forward.

    Maybe the BCS can get the message across that we *still* have a wealth of IT talent in the UK.

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  • 18
    Christine Arrowsmith wrote on 3rd Mar 2014

    I am retired but when I was employed companies did not want to spend money on training staff, everyone was supposed to hit the ground running.

    IT has not stood still and any business which fails to keep its systems and staff up to date will have a problem.

    Any it person who has been employed should be able to adapt to new ways of working . After all the basic logic skills do not change only the "language". Anyone who is out of work would be willing to serve a defined 'probationary' period while they acquire the new skills provided the employer is willing to pay the correct rate for the skills once learnt.

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  • 19
    Richard Pennington wrote on 3rd Mar 2014

    There is no skills shortage - or at least there wouldn't be if employers didn't illegally discriminate against the over-50s.

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  • 20
    Stephen wrote on 6th May 2014

    Whatever the truth is regarding current skills needs as compared to those available, the inevitable future truth will be a shortage of skills in new technologies if school leavers do not have the interest in pursuing STEM subjects.

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  • 21
    Alex Smith wrote on 9th Dec 2014

    There is no IT skills shortage in the UK, certainly not in the south-east - absolute rubbish to say there is. I had been in IT for ten years and when made redundant I made over 1,000 applications and could nt even get a job on a help desk working for min wage - which I offered. Recruiting from overseas certainly does nt help the British IT worker.

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  • 22
    carlo wrote on 7th Sep 2015

    There is no skills shortage. Merely a shortage of progressive companies willing to invest in people. I've got 25 yes s experience and a masters. Can't get an interview and when I do they are using it as free consultancy.
    Salaries suck too. It used to be a decent career but now its long hours, pressure and crappy pay in downtown locations that are impossible to get to. And dont start me on these MBA halfwits that are somehow running tech departments.

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  • 23
    Dominic Shah wrote on 4th Jul 2016

    There is no skills shortage just a ton of bias towards outsourcing especially in the enterprise spacec. FTSE 100 companies employ people to manage cost base with no care for the effect of areas like data security and quality of work performed. I have seen every facet of this first hand when working with teams and most of them are clueless and work for companies that treat them poorly and expect them to become management consultants rather than quality developers.

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  • 24
    Bob wrote on 25th Aug 2016

    Read the Rise of the Robots by Martin Ford and then become a plumber.

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