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Digital Skills Shortage: Have you Refused Work due to Lack of Talent?

Posted: 22 Dec 2016

In January, we wrote about the skills shortage in the technology industry in northern England and the responsibility of businesses (we’re talking start-ups, national companies and recruiters) and trade associations to help address the issue for the sake of the northern economy.

Statistics of scarcity

Manchester Digital recently carried out a skills audit of digital businesses in the North resulting in some ominous statistics for the future of the digital economy. 37% of businesses surveyed have refused work over the past year due to a severe lack of resource, whilst 25% of businesses have outsourced work outside of the EU as they couldn’t find the talent here in the UK. And sadly, men still dominate the industry with 1 in 5 companies stating that their workforce is 100% male.

Considering specific job roles, developers are the hardest to source, with 65% of businesses saying they struggled to fill a developer position in the last year. At MRJ we agree that good developers are like gold dust, but employers must take some responsibility:

  1. Lack of talent planning. It’s not uncommon for clients to come to us with a developer position to fill along with the request of recruiters’ nightmares, “We need them to start next week!” On average, the entire recruitment process – from job description to developer at their desk – takes 3 months (including a typical 4 week notice period). With the new age of 3 month notice periods, this is set to almost double. By developing a talent management strategy, businesses can implement a human resources plan, based on forecast growth and the development of new services and products, in order to improve planning for recruitment requirements.
  1. Lack of training and development. The only way to meet the growing demand for digitally skilled workers is to invest in the next generation of talent. Tech businesses cannot expect to recruit a graduate or junior developer and see the finished product walk through their door – it requires time and passion to nurture the developers of the future. The Amaze Academy programme, run by digital agency Amaze, offers a fast-tracked, discipline-specific syllabus, equipping graduates with real life skills and experience to transform them into high value tech professionals. It’s programmes like this, which benefit young individuals, the industry and the economy, that companies with the resources must start to consider adopting in order to tackle the digital skills gap.

It’s not all bad news though. 84% of businesses surveyed in the audit reported growth over the last year – up 4% on the previous year. This is something we’re seeing with many of our clients, but there simply isn’t enough talent to meet the demand of growth.

So, what is the government doing to help?

The Tech Nation Visa Scheme was rejigged by the government in late 2015 after the original programme implemented by David Cameron two years earlier only received 19 applications out of a possible 200. The scheme, delivered by Tech City, an organisation created to champion the UK’s digital sector, makes it easier for non-EU citizens with specialist technology skills to enter the country for work by introducing a series of new ways to meet the visa criteria.

The programme also seeks to recognise individuals with “exceptional promise”, targeting specific gaps in highly specialised areas. The North particularly benefits from the scheme as applications to work at companies based in Hull, Leeds, Liverpool, Manchester, Newcastle or Sheffield are fast-tracked – all in the name of the “Northern Powerhouse”. All great stuff, but a quota of 200 people isn’t enough. According to Joint Venture Silicon Valley, 46% of Silicon Valley’s workforce comes from outside the US (3.5 times more than the national average of 13%). If the UK is to become a ‘tech nation’ competing on the world stage, these kind of initiatives need to be delivered on a much larger scale. But, of course, immigration is one of the most controversial and divisive political issues in the country right now, so we won’t hold our breath.

A pull in the opposite direction comes in the form of the proposed abolition of tax relief on travel and subsistence for contractors. If it proceeds on 6th April this year, the talent shortage will be further exacerbated. 14% of IT workers are contractors (that’s 9% of all contractors in the UK) – many of whom will be forced to increase their hourly rates to compensate for a significant reduction in income. Manchester Digital’s skills audit found that almost half of businesses (44%) had to inflate salaries to compete in the industry last year – a figure that is likely to increase once the changes go through. Alternatively, contractors will refuse to travel long distances to work, which will only intensify the talent gap.

In our hands

The skills audit was timely released to coincide with Manchester Digital’s annual Digital Skills Festival last week – 4 days of events aiming to help nurture the next generation of tech talent. Students from colleges and universities in the North West, plus Huddersfield, Liverpool, Leeds, Bolton, Chester and Sheffield – plus some from even further afield in Scotland, Nottingham and London – are invited to a Digital Skills Conference, Talent Day and Experience Day, giving them the chance to discover more about the industry, meet potential employers and learn some hands-on skills. The Digital Skills Festival is a glowing example of what we should be doing here in the North to recruit and retain digital talent, and showcase northern businesses. Most importantly, it brings together young talent, businesses and industry professionals; after all, collaboration is the key.

But, are we really doing enough?

References 

https://www.manchesterdigital.com/news/northern-digital-businesses-continue-turn-away-work-due-lack-resource-0

http://www.telegraph.co.uk/finance/newsbysector/mediatechnologyandtelecoms/11934599/Government-agrees-to-relax-tech-visa-system-amid-skills-shortage.html 

http://ww2.kqed.org/news/2015/07/21/immigrants-help-lead-a-new-silicon-valley-labor-movement 

http://www.contracteye.co.uk/contractor_numbers_uk.shtml

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