The IT skills shortage: What to expect from the fallout

Written by Tom Montague.

Finding employees with the right fit of skills is a universal problem – but when it comes to securing IT expertise it's extreme.

According to research from Forbes Advisor, 93 per cent of UK businesses say they're experiencing a shortage of IT skills, largely due to the rapid pace of technological advances. 

Certain skills are harder to find than others. For example, two thirds of IT decision makers say they've struggled to find staff to support organisational cloud initiatives.
And there's also a severe shortage of staff with skills in IT support and troubleshooting, along with data analysis and data science, programming, and cloud computing.

Cyber security is a particular headache, with a government report last year finding that more than eight in ten UK businesses have a skills gap in this area, and that the UK’s currently lacking around 11,200 people who are skilled in cyber risk.

Because of this, the cost of hiring tech staff is rising, with roles in cloud and data now paying around nine per cent more than last year. And, says recruitment firm Lorien, competition for skilled staff is only likely to get worse this year. 

One solution for organisations seeking to secure in-demand skills is to recruit from overseas. However, the ease of doing this was threatened by the decision of the last government to make changes to the going rates for specific occupations under the Skilled Worker Visa. 

These changes mean that firms hiring software engineers from abroad would be required to pay them a minimum salary of £51,000. According to the Entrepreneurs Network and Startup Coalition, this is particularly unfeasible for start-ups, which often offer early-stage employees equity stakes in their businesses as part of their compensation packages, rather than a salary alone.

With the arrival of the new Labour government, it's unclear whether these changes will go ahead as planned. However, it looks as if something along these lines will be introduced. Home secretary Yvette Cooper has expressed concerns about the high level of international recruitment in the IT and engineering sectors and has asked the chair of the Migration Advisory Committee (MAC) to commission a review.

The government is concerned about high levels of migration, she says, and wants to look for “policy levers” to incentivise employers to focus on domestic recruitment. 
When recruitment of staff with in-demand skills is difficult, training existing staff is one obvious answer. In recognition of this issues, the government launched ‘Skills England’ over the summer aimed at boosting skills across the economy through training initiatives.

‘The skills system we inherited is fragmented and broken,’ said education secretary Bridget Phillipson. ‘Employers want to invest in their workers, but for too long have been held back from accessing the training they need.’

The aim is to bring together central and local government, businesses, training providers and unions.  thus, supporting local areas to help them develop the skilled workforces they need. 

The move has been welcomed by industry body TechUK, though it warns that Skills England will need to be well-resourced if it's to do everything it needs to; oversee changes, create a framework for accreditation, monitor the results, and share the lessons learned.

In terms of actually delivering training, according to Forbes Advisor, more than a third of UK businesses have invested in internal training programmes, and 28 per cent are teaming up with educational institutions. Meanwhile, online courses and certifications can help employees work at their own pace.

And when it comes to who should get that training, it's advised to cast the net wide. Staff with existing tech skills can '”op up” with AI training, for example. This strategy is usually popular with employees, so should also help with staff retention.

Outsourcing is in many cases another effective strategy. Many organisations – 38 per cent of businesses and 61 per cent of public sector bodies, according to government figures – already outsource some or all of their cyber security function, for example. This allows them to access specialist expertise, without the cost overheads of recruitment and training. 

In the longer term, there's hope that the government will come up with a set of effective strategies to improve the UK's homegrown tech skills. In the meantime, for most organisations it's a case of mixing recruitment, training, and outsourcing – an often-unnerving balancing act.

Sources:

The 2023 IT Skills Gap Report – Forbes Advisor UK

Cyber security skills in the UK labour market 2023 - GOV.UK (www.gov.uk)

Lorien Salary Survey reveals in-demand technology workers securing robust wages as hiring stabilises in the tech sector | The global house of tech and transformation recruitment | Lorien (lorienglobal.com)

Cyber security skills in the UK labour market 2024: technical report - GOV.UK (www.gov.uk)