A series of recent reports show that the need for IT skills in the UK is increasing at a rate that is alarming for employers, but which is good news for contractors who can expect more work as a result.
Greatest Demand is Financial Services
The sector of greatest demand at the moment is financial services, with professional services following closely after. One area that is surprisingly not feeling that skills shortage as much is telecoms, where the number of full-time workers has grown in number by about 17% over the past quarter, according to the London-based research agency e-Skills. There is markedly less demand in telecoms than in other IT skills areas, according to e-Skills.
Intense demand in financial services is fuelled by increasing demands for security following the transition to Basel II system requirements (the need for financial services operators to maintain reserves at given levels) in 2007. According to research from the London-based research and consulting firm IDC, about 21% of IT contractors now work within financial services.
Says Robert Thesiger, CEO of recruiting firm Morgan McKinley: "The buoyancy of financial services is due to expansion and diversification of their operations and services in order to meet ongoing demand."
IT Spend Up 10%
Outside of financial services, security is indeed the demand leader as all companies ramp up online channels and seek to protect their internal administration. Dot-net, PHP, and C programmers lead the field currently in terms of specific skill sets, but demand is set to spread to all areas of programming. The average IT spend per company in the UK is set to rise by about 10% this year, but in the fastest-growing sectors like retail and financial services demand is expected to be almost double that amount.
Where are the workers to come from? "The IT skills gap remains a serious issue," says e-Skills UK chief executive Karen Price.
The IT skills gap remains a serious issue
e-Skills UK-chief Price
"And an increasing number of firms are relying on contractors to make up for shortfalls,"says David Bradshaw, principal analyst with the London-based research and consulting firm Ovum. Bradshaw notes that the outsourcing of IT functions to centres in emerging markets is not sufficient to make up the skills gap. "It’s not a panacea,” he says, "because there is still a tremendous need for work to be done on the spot. One cannot do everything abroad."
Gap to be Filled
Contractors are benefiting from UK management’s lack of vision in this area. Price points out that there is still far too much complacency among UK employers, particularly among smaller firms in regard to training and investment in IT. Because UK firms have not made the necessary investment, they will need to make up for it by using contractors, or risk losing out to competition, especially better-trained foreign competition, Price says.
As the IDC report shows, UK workers’ lack the high-level technical skills that are badly needed here. "Future demand for IT skills goes beyond just basic proficiency to advanced and e-business skills, and will continue to grow, while the number of qualified graduates and experienced personnel is falling.
A significant portion of our best IT workforce has gone abroad
IDC report
A significant portion of our best IT workforce has gone abroad." says the report.
According to the IDC study, fewer people are choosing the profession because it has a poor reputation
"One does wonder how the IT profession in the UK is going to move forward," said Price. Proposals for sector-specific National Skills Academies are intended to address the gaps. Technology skills groups this week called on IT and telecoms employers to put forward expressions of interest for the sector’s academy. But experts say more commitment from all employers is needed to solve the UK skills problem.
In the meantime, contractors will continue to fill the gaps and demand for their services will increase.