Is the UK heading for another tech skills crisis?

Despite the slump, many organisations are struggling to recruit high-calibre IT staff. So what can be done to prevent the situation from deteriorating into a full-blown skills crisis when the recovery finally arrives?

Despite the slump, many organisations are struggling to recruit high-calibre IT staff. Rachel Fielding asks leading industry figures whether anything can be done to prevent the situation from deteriorating into a full-blown skills crisis when the recovery finally arrives

Economic doom and gloom prevails, unemployment continues its upward trajectory and with little in the way of evidence to suggest a imminent reversal in the UK's fortunes, 2012 looks set to be a challenging year for business.

And yet, despite redundancies across the IT industry over the course of the recession, finding good people with the right skills has never been harder. Indeed attracting, recruiting and retaining top talent is set to be one of the biggest challenges facing CIOs over the next 12 months.

It's a concern that was echoed by more than 50 CIOs and IT directors at Deloitte Technology Consulting's annual CIO Dinner back in November. According to a poll conducted at the event, a large majority of IT leaders indicated that they spend at least a third of their day on IT leadership, talent and skills development.

Kevin Walsh, Deloitte's technology consulting leader, believes that although the global recession temporarily eased concerns about the IT talent crisis, the situation is likely to be worse as the economy recovers. He warns that many skills are difficult to find, with the most critical need in the area of strategic talent, including project managers, commercial managers, leaders and architects.

Despite gaps, a buoyant contractor market means business objectives continue to be met. But James Aldridge, head of the UK's biggest IT recruiter Hays, warns: "It's not the most cost-effective solution, and the shortage of permanent candidates is probably stifling some growth in systems development that isn't business critical."

Aldridge also admits clients are wary of contractors because they're worried they'll be the first to up sticks and leave to get a higher contract rate.

"There's a perception that the whole country is in recession but in IT demand is outstripping supply for developers and business transformation specialists. The challenge for CIOs is the people doing the recruitment for some of the crucial roles just aren't acting quickly enough," he adds.

Is the UK heading for another tech skills crisis?

Despite the slump, many organisations are struggling to recruit high-calibre IT staff. So what can be done to prevent the situation from deteriorating into a full-blown skills crisis when the recovery finally arrives?

The continued discrepancy between contract rates and permanent salaries means that it is still often more attractive for candidates to take contract roles and risk periods of unemployment between jobs. It could also go some way to explaining why in the contract market, there are fewer jobs than there are candidates. In contrast, demand in the permanent market is sig nificantly outstripping supply of candidates.

False sense of security

The perception among CIOs that the market has been flooded with fantastic candidates is at best misguided and at worst damaging to business, Aldridge warns. "Clients are being very specific in their requirements and while it's fairly easy to find contractors to do anything, albeit at a price, the market doesn't facilitate them to be so fussy for permanent staff."

Although there has not been a significant change in the kind of core skills most sought after by CIOs in the past few months - .Net developers, business analysts and project managers continue to feature strongly in wish lists - the need for soft skills and developers who can articulate what the business wants has never been greater. "Clients want the full package," Aldridge says.

The combination of the recession and the outsourcing/offshoring phenomenon has lulled many IT directors into a false sense of security and led to many taking their eyes off the ball in terms of talent management. Although businesses may need fewer tech nical IT staff inhouse, the need for senior IT managers and business managers who understand IT is greater than it has ever been.

"Some of the traditional talent pools are a lot smaller," says John Harris, chairman of the Corporate IT Forum and chief architect and vice-president global IT strategy at pharmaceuticals giant GSK, "so recruiting really good architects at GSK is difficult. The problem is that the bottom end of the career ladder is now outside the company and in a lot of cases outside the country."

The relative immaturity of the IT industry has led to an absence of distinctive career paths for senior IT managers. It's an issue that goes right to the top, exacerbated by the fact that too few organisations have a succession plan in place for the CIO, as well as for his or her key direct reports.

"Businesses are changing the way they buy IT and that, in turn, is changing the skills needed by senior management. The roles are becoming more commercial than technical and are revolving around business relationships. Indeed, the next CIO is as likely to come from outside IT as from within it," says Mark Lillie, a partner in the technology consulting practice at Deloitte.

Is the UK heading for another tech skills crisis?

Despite the slump, many organisations are struggling to recruit high-calibre IT staff. So what can be done to prevent the situation from deteriorating into a full-blown skills crisis when the recovery finally arrives?

At the same time, evolution of the IT market has transformed the role of the CIO. "It's incredibly challenging. You have an increasingly tech-savvy business that wants new ways to use IT to transform the business and wow and amaze customers. On the supply side, there's a hugely evolving ecosystem of suppliers. The CIO's role involves managing complex sourcing arrangements and knitting all these different elements together - and the cloud is further complicating that," Lillie says.

It doesn't help that many companies are operating blind in terms of the skills they possess, Lillie adds. "You need to start with a better understanding of where you are and what you've got. Only then can you ensure you have the right capabilities within the right cost constraints. All too often because of the need to do things quickly, IT skills decisions are driven tactically rather than strategically."

More than an inconvenience to talent-hungry recruiters, the dearth of IT skills has major potential implications for the UK's economy. In December, IT recruitment website CWJobs.co.uk warned that the IT skills gap was preventing the UK from competing with the US IT industry. A poll of almost 1,400 IT professionals found that around two-thirds of respondents believed there is still a skills shortage in the UK.

"If we are to take on Silicon Valley, it is imperative that the government invests in improving the training available to young IT professionals, as well as investing in technology businesses," says Richard Nott, website director at CWJobs. "If the government fails to do this, our IT specialists are likely to move abroad for better pay or opportunities; we can't afford to lose them."

The government is adamant that IT skills issues are high on its agenda. In November, it launched the second phase of the Growth and Innovation Fund (GIF) worth £34m for 2012-13 to support businesses to develop their skills. Speaking at the launch, Minister for Further Education, Skills and Lifelong Learning John Hayes conceded that times are tough for many businesses, but said he was determined "to do all I can to build a skills system that creates opportunity for young people, and puts firms on course for growth".

But talk is cheap. Just as skills issues were hitting the headlines, elsewhere in Whitehall the Cabinet Office launched a public consultation on open data, highlighting its commitment to making increasing amounts of public sector information available for examination and re-use. Using data to make better decisions is crucial - but with a lack of resources, who will take on the work?

"The McKinsey Global Institute states that there's a skills gap between the amount of people qualified to analyse data, and the positions available, but doesn't inquire how this gap will be filled. This will continue unless businesses and the government start to invest in the future workforce long before they enter the working world," says Ian Manocha, managing director of SAS UK & Ireland. The onus, Manocha says, should be on universities to provide courses that are fit for purpose and aligned to the needs of the marketplace.

"The future economy should thrive with innovation, productivity and public growth but this will not come to fruition unless there are people ready, willing and able to do the job," Manocha adds.

Education and apprenticeships

Harris at the Corporate IT Forum doesn't believe it's up to government to sort this out. He is keen to see the education system become more relevant and would support reduced bureaucracy to boost the attractiveness of apprenticeships schemes for business. "IT can be a bit insular. If we get it right and generate excitement, people will choose to come into the industry."

Is the UK heading for another tech skills crisis?

Despite the slump, many organisations are struggling to recruit high-calibre IT staff. So what can be done to prevent the situation from deteriorating into a full-blown skills crisis when the recovery finally arrives?

At present, there is no national standard for hiring apprentices and Ann Brown, HR director at Capgemini, is on a mission to change that. The company is looking to hire 400 graduates and apprentices this year, but she admits she has a job on her hands. "It's very difficult to recruit apprentices. There's still not enough understanding of careers in IT in schools."

Capgemini has joined forces with other IT services players to carve out around half a dozen common roles that can help to publicise the opportunities careers in IT can present. "Our vision is for a teacher, parent or careers adviser to be able to print off a single page that describes what the job is, qualifications, responsibilities -- that's the dream but we're a long way from that."

Brown also believes that hiring the right sort of people rather than focusing on specific skills has to be the way forward. "It's about having an aptitude for learning and teaching them a variety of skills to make them versatile. We need people with the capability and desire to stay fresh."

Despite widespread acknowledgement that IT skills issues are a major headache for UK plc, IT recruiters remain "relatively upbeat" about the jobs outlook in 2012, according to the Recruitment & Employment Confederation (REC). Its December Report on Jobs showed a rise in demand for both permanent and contracted IT staff, although it also said that recruiters and employers are both concerned at the lack of suitable candidates for specific roles.

There are also positive signs that attempts to tackle the perception of IT are starting to pay off, perhaps less down to government initiatives and more thanks to the proliferation of social media and the cachet of tech companies like Apple.

Short term, the Corporate IT Forum's Harris isn't sure there are any answers. "We just have to play the game out. Companies may have to pay a bit more for certain roles. In the medium term, CIOs have to put real effort into their talent development. We need to champion learning and use forums so companies can learn from others - but tech people aren't traditionally very good at that," Harris laments.

Talent management will require a new set of skills from the CIOs grappling with the need to find and retain the skills they so desperately need - not least, strong leadership as well as increased collaboration with HR and talent professionals. But one thing is for sure; nurturing talent takes time and this is not an issue that either the business, or IT, can put off any longer.