Tech skills shortages are increasing every year, and large corporates are worst affected - Harvey Nash

Every year, the IT skills shortage worsens, warns Harvey Nash Group CEO Albert Ellis, with the fields of big data, security and AI most acutely affected

Every year when the results of the Harvey Nash/KPMG CIO Survey come back, we think the skills shortage problem can't possibly have got any worse. But every year, it has. In fact, skills shortages are now at their most acute since 2008. These shortages can't fail to act as a bottleneck to growth.

With technology developing at such a pace, perhaps it's no surprise that supply can't keep up with demand. Certainly, the most acute shortages are at the top end, in advanced fields such as big data/analytics (43 per cent of organisations reporting a shortage), cyber security (39 per cent) and AI (38 per cent).

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Every kind of organisation is affected to a greater or lesser degree. The sector struggling most is government where 81 per cent of respondents said they are facing a critical skills shortage preventing their organisation from keeping up with the pace of change. The middle band of companies, those with IT budgets of between $50 million and $250 million, are also badly hit, with 73 per cent reporting a critical shortage. Overall, 67 per cent of businesses have a critical skills shortage issue.

But one of the emerging trends that is beginning to become ever clearer is the divide between older, established brands and smaller, younger businesses. It is the big corporates that are feeling the most pressure. Among businesses over 50 years old, 71 per cent are facing a talent problem.

The young talent coming through today simply have a different attitude to life compared to their parents

Larger organisations with budgets of more than $250 million also appear to be the least able to retain their staff for as long as they would like: only 26 per cent retain key staff within their technology teams compared to 44 per cent of smaller businesses with budgets of less than $50 million.

The irony, of course, is that it is these larger organisations that often need to attract and retain IT talent most, as they are the businesses most in need of digital transformation.

What we are seeing here is really quite a profound generational shift. The young talent coming through today simply have a different attitude to life compared to their parents. Millennials tend to be less driven by material possessions and old markers of status, such as property or car ownership: they value experiences over ‘things'. They want to live light, with a light footprint.

In their careers, they are more interested in innovative projects and learning new skills, more so than in salary and job security. They are looking to work for enterprises that have a clear purpose, and many of them also care deeply about working for an organisation with strong ethical, environmental and sustainability credentials.

The fact is, however, that skills at the top end, such as AI and big data, will always be in short supply

As a result smaller, younger companies are frequently a more attractive proposition for today's wave of IT talent. Older corporates struggle to compete on these terms.

At the same time, many corporates have become more financially constrained in recent years and their IT budgets can only stretch so far. With giants like Google and Amazon prepared to pay a 10-to-20 per cent premium in order to obtain the best talent, corporates are being squeezed on that side too.

So what can be done about this perennial problem? While we have to recognise that there is no silver bullet, there are a number of ways in which organisations can help themselves.

Many clients are investing in building offshore skills centres where they can attract and then up-skill new talent. For example, we helped a client build one in Vietnam which now holds around 1,600 people, mainly bright graduates from institutions such as Hanoi University. Trained in skills like software development and data analytics, they become a hugely valuable resource.

Many clients are investing in offshore skills centres where they can attract and then up-skill new talent

Apprenticeship schemes can play an important role too, such as via the apprenticeships levy in the UK. We have seen many clients training young people through the scheme to become valued technical apprentices.

The fact is, however, that skills at the top end, such as AI and big data, will always be in short supply. The cloud will help, with more and more software becoming available on a pay-as-you-go basis. Some projects can be outsourced to IT service providers, of course. Meanwhile, businesses must keep investing in their own staff, supporting them with ongoing training and skills development.

Given that skills shortages look like they are here to stay, it is crucial for organisations to develop a realistic resourcing strategy that draws on a range of measures and tactics to keep servicing the massive organisational demand for IT skills.

Albert Ellis is CEO of global tech recruiter, Harvey Nash. The Harvey Nash/KPMG CIO Survey 2019 was launched today. To register for a copy of the report, click here

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