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Fears growing over potential IT skills shortage

The UK could be sleepwalking into an IT skills shortage, as fewer young people look to study computing and related courses at school and university.

With IT playing a central role in almost all modern businesses, computing skills are understandably very much in demand across all sectors. The economic downturn may have forced many firms to delay their recruitment plans, or even outsource to a third-party, but this has not altered the view that IT departments add great value to organisations. And with cloud computing and virtualisation very much on the list of business priorities, e-commerce increasingly profitable and digital channels key for marketing purposes, more companies appreciate the importance of access to specialist computing skills.

As the economy gets back on its feet, and recruitment freezes thaw, IT skills are set to be in even greater demand. Back in 2009, Microsoft chief executive Steve Ballmer predicted that technology investment would lead to the creation of 78,000 new IT jobs in the UK by 2013. More recent research suggests that demand for labour could be significantly greater, and this should be a source of real optimism for jobseekers. Just last month, e-Skills UK reported that 110,000 new IT professionals will be needed in 2011 to meet immediate employer demand. The technology sector skills council predicted that IT employment will increase at a rate of 2.19 per cent a year over the next decade – five times faster other jobs markets.

Of the 110,000 new IT industry entrants, the majority are likely to come from other sectors, bringing their pre-exisiting skills and applying them in an ICT context. However, e-Skills said that 17 per cent of the total will be sourced directly from higher education. Students sitting their finals in computing and IT degrees will no doubt be licking their lips at this high level of demand, but there lies the problem. At present, there are simply not enough young people studying tech-related subjects at school, college and university. With students benefitting from wider subject choice throughout the education pyramid, the popularity of IT subjects is seemingly on the wane.

Last summer, official GCSE figures revealed that the number of 16-year-olds sitting exams in ICT fell by 17 per cent for the 2009-10 academic year. In total, just 61,022 pupils took GCSE ICT this summer, compared with 73,519 last year – the likely result being fewer applicants at A-Level and for undergraduate study. Karen Price, chief executive of e-Skills UK, reported that this trend – which has been emerging over the past decade - is being translated into the workplace.

She commented: "The proportion of IT and telecoms professionals under the age of 30 has declined from 33 per cent in 2001 to only 19 per cent in 2010, as the sector increasingly favours experienced workers from other sectors over young recruits from the education system." Ms Price said there is a particular need for new types of development programmes that help young people move into IT roles and become productive more quickly. In addition, she said the industry needs to do more to attract talent from all sources, particularly women.

Where UK companies have typically sourced IT expertise from in recent years is the flourishing overseas markets. With immigration rules fairly relaxed under the Labour government, and new countries entering the European Union over the past decade, employers have had access to high-level skills from abroad. Where non-EU workers are concerned – for instance computing graduates from India – global firms have made good use of Intra Company Transfers to bring in labour to the UK. This process is not good for British IT professionals, who see their own appeal – and therefore earning capacity – reduced as a result, but with a skills gap seemingly developing, overseas labour has been treated as a straightforward solution.

Whilst this is an attractive solution for headline cost reasons, reservations persist about the quality of some work and the loss of control within a project for the client or end user. The result has been some companies are bringing the more standard work back “in-house” and only outsourcing for specialist requirements and projects.

However, with the Con-Lib coalition eager to reduce immigration into the UK, and unable to stem the flow of EU migrants, tougher rules have now been imposed regarding non-EU professionals. As a consequence, some hirers could find themselves caught between a rock and a hard place, desperate to obtain high-level skills but unable to access them affordably in the UK. If British and European applicants are not up to the job, and businesses cannot hire from abroad, some may feel that offshoring their departments is the only viable solution. This situation would not only lead to a loss of UK jobs, but also loss of opportunity for UK jobseekers, not to mention reduced tax receipts for the Treasury. It is far more in everyone's interests for employers to have access to the expertise they need, and this means tackling the skills gap at its root.

I suspect that the trend for off shoring large amounts of work has waned and the likely outcome will be that business begins to invest in the personal development of newer entrants to the IT Labour market. This should in turn help slow the rate of wage inflation in and remove one of the drivers to off shoring work.

The way the IT industry is marketed should perhaps be looked at, both in the education system and society as a whole. With computing specialists able to command high wages, and often pick who they work for, the sector has plenty to offer to jobseekers willing to study hard and learn the ropes. e-Skills UK reports that some areas of the UK are already suffering from severe labour shortages, and at a time of high graduate unemployment this may help have some bearing on younger people's career decisions. In Northern Ireland, nine per cent of ICT organisations are reported to have vacancies at present, and 18 per cent of firms are concerned about talent shortages. Without changes in attitudes and approaches, it won't be long before similar stories are reported across Britain.

As a nation that has historically been a leader in IT innovation, it would be a real travesty to throw away this great computing legacy. The UK's proud reputation for technology excellence has been built up over the last century, and with the acquired knowledge and resources at its disposal, should only be enhanced in the years to come. Yet this relies upon the efforts made now to combat the sense of complacency that has set in. Without it, British IT pioneers such as Maurice Wilkes and Tim Berners-Lee will be much harder to come by in future years. And particularly pertinently, UK businesses may quickly see their growth strategies hampered by a lack of suitably-skilled staff.

Computing may now play an essential part in everyday life, but there is still plenty of work to be done behind the scenes. Without the would-be programmers, computer scientists and designers experimenting in their attics and garages, progress will inevitably stall. For those willing to dig beneath the surface, IT retains the element of mystique that so appealed to the likes of Bill Gates, Paul Allen and Steve Jobs. But not only that, it continues to offer vast rewards to talented, dedicated individuals. And in the current climate, with unemployment quickly rising, there are few things more important than job security – which will be available in spades to UK IT professionals.