Where will we get them and how should we manage them?

The UK’s digital tech skills shortage, and how to overcome it.

There is a shortage of talent in the digital tech space.

As the digital economy continues to expand, and traditional sectors simultaneously become ever more tech-centric, companies of every kind (tech specialists being merely one) are forced to fight for the programmers, developers, analysts and other tech enablers on whom their futures depend.

Here in the UK, the problem is especially acute.

A strengthening economy has created an excess of demand that our education system and approach to training cannot meet. And with a generation of baby-boomer tech heavyweights now bent on early retirement, creating an added pull-through of talent from the top end, the need to find practical solutions has never been more acute.

This paper considers the problem and its impacts, before going on to consider practical solutions and their relative merits.

1) Demand fueled by growth

If you want the good news, it is this: the UK’s economy may not be recovering quite as rapidly as we might wish, but recovery is good, nonetheless.

The UK is enjoying the second fastest growth rate amongst the G7 nations.

Professional services provider and economic analyst PWC predicts that growth in 2016 will average over 2%. By 2025, they anticipate, the UK will have created an additional 3 million jobs, with expansions and advances in the business services, health and education sectors leading the way.

An essential contributor to this growth, and key to filling the projected 3 million jobs, are workers with the collective skill sets of the digital economy.

According to the report Tech Nation 2016, produced in February of 2016 by Tech City UK and digital business and innovation interest group NESTA, over 1.56 million of the UK’s workforce are now working in digital roles of one kind or another.

Notably moreover, 41% of them (some 640,000 workers), are now providing these skills not within the confines of specialist digital service providers or overtly digital enterprises, but within the main rump of UK enterprise: banking, logistics, healthcare, education, defence, retail, infrastructure etc. As those 3 million further jobs are being created over the coming decade, say PWC, as many as 600,000 more jobs in manufacturing could disappear.

The result?

Demand for technology skills is already extremely high across all sectors of the economy. Natural growth in this demand alone would, over the next decade, increase the percentage of the workforce requiring digital-skilled individuals. With teh number of non-digital skilled jobs decreasing, however, this percentage increases even more dramatically.

In order to remain competitive and continue to invest meaningfully in R&D, employers in every sector (including those in overtly ‘digital technology’ focused industries) will face an increasing challenge to train, attract and retain the volume of digitally skilled employees they require.

2) The shortage of tech talent

TechUK represents 900 of the UK’s largest employers of tech workers. Its members provide around 50% of all tech jobs in the UK, including roles in software development, programming, web development, project management and business analysis. It estimates that unfilled roles requiring tech skills are currently costing the UK around £2bn a year.

Britain is not alone in battling the shortage of tech talent, however. The shortfall of available tech skilled employees extends around the world. In the US, the Council of Advisors on Science and Technology is predicting a shortfall of 1 million tech professionals by 2020.

The shortage may be attributed to:

Reluctance to invest in training.

Writing for TechCrunch in November 2015, Baron Schwartz,founder of Vivid Cortex, suggested the time required to bring a software developer to a useful level of proficiency as being between five and 10 years. For employers, this makes training of entry level employees, graduate or non, a daunting investment which, while offering the prospect of “jam tomorrow”, does nothing to mitigate an immediate need and actually eats into resources available for that purpose.

Practical skills deficiency of graduate recruits.

University graduates entering the employment marketplace with degrees in computer science, vocational distillations of computer science, or creative digital technology subjects
continue to arrive with a substantial gap between academic course training and the practical professional skills required in the workplace.

Difficulty in updating employee skills.

Professionals already working in tech disciplines are challenged by ever-faster evolving technologies to find time to update, and acquire new, skills, while the demands on their time increase continuously due to mounting need within their organisation for their skills and the difficulty of recruiting additional manpower.

Global market.

The demand for the talent pool that does exist is global and pan-sector. This means that employers in every geography must compete not only with local market rivals but with rivals in every other part of the world, and in every sector.

Global citizenship of tech workers.

The developers and other tech professionals of Generation Y, now aged 20-35, expect and desire to experience working and living in markets around the world. Again, this means that employers must compete with rivals in every other geography. For UK employers, and those in London in particular, this is less of a problem than for employers in many countries, with the UK maintaing its attraction for many skilled overseas tech workers. How long an employer might expect these workers to remain before moving on, however, is another matter.

Early Retirement.

For baby boomer members of the digital workforce, retirement is now on the horizon. While around 65% of peers in other industries are planning to remain in office to retirement age, around 50% of older digital professionals, with many decades of invaluable experience, are planning to retire early, according to research(5) by recruitment company Randstad Technologies. This is a result of believing that their employers will not want them, as ‘older’ employees.

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