2017 UK Tech Skills Report: What you need to do now

CWjobs recently held a roundtable where they shared the latest key findings from their 2017 UK Skills Gap Survey to a group of recruitment technology leaders.  The aim of the session was to encourage further discussion and explore potential solutions for the challenges that were revealed.

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They surveyed over 1,000 people working in the IT and tech industry during September to October this year.  This included 70 employers, mainly from organisations with a mixture of 100+ Permanent and Contract staff, to understand their views on the tech skills gap. 

Our tech industry is one of the key success stories in the UK and is currently valued at £170bn with 1.5 million people employed in the sector - but are we prepared for the future?  The pace of technology is speeding up and the supply of technically competent workers needs to align with this.  The recruitment market also has the added complications of IR35 and Brexit to add to its concerns.  

Brexit is already having an impact

The government has agreed to let current EU workers stay in the UK but is still arguing over our immigration policy for future workers.  The country’s tech industry has already experienced a sharp drop in job applicants from the continent and data from Arrows Group shows a 10 per cent reduction in applications in the first quarter of this year compared with the same period last year — down to about 900 from 1,000 before Brexit. The industry relies on EU citizens to fill about 180,000 jobs in the sector, according to data from the Recruitment and Employment Confederation. The figure represents a fifth of tech jobs in London

The UK Tech Job Market

What has been the real impact of IR35?

The re-establishment of IR35 has introduced confusion throughout the industry with its complex set of rules and there is probably more shakeup to come.  Only 6% of IT and tech workers believe that a contractor role in the public sector is an attractive career path now (according to CWJobs research, the Impact of IR35, July 2017).

Opinions at the Roundtable differed on this subject with some believing that a rollout to the Private sector wasn’t likely in the near future due to the Government being somewhat tied up in other matters.  However, several attendees had received strongly worded surveys from the Government indicating that it is still very much an option they are keen to drive.

On the upside, the Thames Valley Police thought that IR35 had actually had little impact on them.  45% of their tech workforce are contractors and they had only lost 4 people due to IR35.  They believed that this was because they had managed their contractor set up well and proved that most of their contractors were outside IR35.  Therefore, if companies understand and manage IR35 well the damage could be mitigated.  Whether this happened with the National Rail walkout is another matter

It is still probably too early (and complex) to measure the real impact of IR35, and we will have to monitor the changes that take place in the contractor space moving forward

Tech salaries continue to rise

With the increase in demand for skilled workers in the tech sector, salaries are also rising. In its Q2 2017 Tech Cities Job Watch report, IT recruitment experts Experis showed that overall permanent salaries have grown 4.2 percent year-on-year, reaching an average of £53,113 across the UK, while day rates are up 6 percent to £458.  With demand likely to heat up even more surely we are going to see even bigger increases shortly?

The Tech Job MarketWho is addressing the skills gap?

With 94% of employers believing that the industry is facing a skills gap this is surely hitting a crisis point now or about to shortly. 

How we go about filling this gap, however, seems to still be up for debate.  75% of employers believe universities are responsible for making sure employees are equipped with the right skills but is this actually realistic? 64% of employees think that business is responsible and should step up to the task

Is it even possible to come out of University with the right skills as the market is changing so quickly?  Should the onus lie with graduates to top up their education with online courses to keep up to date?

Three quarters also believe that the government are failing to address this issue, with two thirds believing the government has not invested enough in training the next generation of tech employees, despite multiple initiatives such as replacing ICT with coding in schools in 2014, giving new generations the opportunity to develop complex digital skills from a young age.

The government has the potential to make a positive step forward when it comes to the digital skills gap, by placing investment in teacher training, introduction of new courses, bursaries and training loans – all of which could help create a nation full of digital expertise.

It is important to also promote and encourage STEM careers to school aged children, who may be unsure of what jobs are available and have had little exposure.

Python is currently on the Senior School curriculum for all pupils so schools are certainly taking a step in the right direction but are pupils encouraged to take Computer Science up at A level or degree?  It would be nice to see a whole flux of Python developers appearing on the market shortly.

There is still a massive need for awareness. It does seem like STEM is slowly becoming cooler but the kids are still very focussed on the idea of fame rather than business.

Should all tech companies start visiting schools and colleges to show them what a career in technology can provide? Some of the attendees of the roundtable were already active in visiting schools and were amazed by the vast amount of children who wanted to be YouTubers but were oblivious to the fact that there was a whole company behind it.

The advent of UTCs (University Technical Colleges) for 14-19 year olds is certainly a step in the right direction where technology careers are highly encouraged with practical work often being tied to real life businesses.  The idea being that pupils build on the technical skills that they will need for their future careers.  This method of education is vital and also something that could be adopted by other educational establishments to encourage learning that deals with real business scenarios.

Where is it going wrong?

Careers advisors do not seem to be close enough to industry. They are often not aware of current skills shortages and the need to encourage people down career paths where there is a demand for those skills.

There hasn't been enough stress or emphasis on IT from primary schools through to secondary schools and even college. The importance of IT, specifically, Cyber Security has not been embedded in the younger generation which will lead to a shortage in staff and a lapse in UK critical national infrastructure.

Overall there appears to be a blame game with schools, universities, businesses and employees all believing that someone else should be picking up the baton.  This is a worldwide issue and the impact of not getting this right and the missed opportunity for the UK is too enormous for the different elements to be shifting blame.  This needs to be taken in hand by the government and supported by all educational facilities and additionally businesses need to realise that they need to train for their own survival.

UK Skills GapWhich skills do we need to focus on?

The top skills deemed lacking in new talent entering the market include coding, programming, web development and cybersecurity and both employers and employees agree that the following focus is essential

•Cybersecurity (28%)

•Web development (25%)

•Programming (24%)

•Coding (24%)

Nearly half (44%) of companies face their biggest skills gap in coding, and 60% are looking for coding skills when hiring entry level talent.  1 in 3 workers, however, do not feel like they are sufficiently trained in coding, cyber security and cloud migration.

TrainingAre we training in the right areas?

When it comes to businesses themselves, 61% of those surveyed said their company has its own training programme for entry-level employees or employees who are looking to be trained in a new area of their business.

Over 50% of tech employers offer entry level training, however the programmes offered seem misaligned with what is needed to plug the skills gap.  All of those surveyed agreed numerous types of technology skills were lacking but they seemed to be focusing more on training their employees in teamwork rather than the required skills

The roles within IT seem to have moved away from the old school Waterfall methodologies to more Agile where tech workers are expected to liaise more with other departments such as Marketing and key stakeholders.  This may be why 41% are training their tech employees in teamwork and interpersonal communication as a new level of respect is essential.  With much of coding now being more reliant on using APIs from libraries, it may be considered that there is not the same need for everyone in IT to be quite so technically minded.

There may be other reasons why 50% of employees are not receiving training.  There is often a concern that the cost of training is a high investment on an employee who may carry out the training and then use their new found knowledge elsewhere.  This is certainly a valid concern but companies should look at how they can mitigate any potential loss.  Many companies impose contractual stipulations asking employees to pay back a percentage of the cost of training if they leave within a specified time period.  Providing it is written in a fair manner and is agreeable to the employee this could be a viable solution.

Alternatively, should companies allow their staff time to train themselves from the many online providers, communities and forums that are now available such as Github or StackOverflow?  Does the role of a coder, programmer or developer require them to be a self-starter now?  If they are earning substantial amounts for their knowledge should the onus lie with them to acquire that knowledge?


Is Cybersecurity the key issue?

The growth of the digital economy and the emergence of new technologies has led to particular skills shortages in areas such as cyber security, with companies and public sector organisations increasingly prioritising the protection of their data against malicious threats or accidental loss.

31% of tech companies believe that they face a major skills gap in cybersecurity with 80% currently struggling to fill cybersecurity roles. Only half of workers (51%) said that their training included cyber security and 23% felt that they were not confident in handling a cyber security attack.  50% thought that their company was unprepared for a cyber-attack or were unsure on their position. 

Anecdotally it seems that companies are more concerned about the GDPR legislation coming in May.  Business priorities often appear to be misplaced – if CyberSecurity is not addressed adequately there may be no business left to worry about GDPR

Nearly half of all UK companies suffered a cyber breach or attack in the last year including 70% of large firms according to Government statistics. The Government has invested £1.9 billion to protect us and offers free cyber awareness training and they can also provide technical certification - but it comes at a cost which may exclude potential future employees. 

Businesses should be looking at this issue more seriously with the cost of breaches running from £20k to £millions. Surprisingly 48% of companies are still not required to hire cybersecurity experts, despite the ever-growing risk of hacks.  How the Public sector will compete for this scarce talent is also concerning with the recent Wannacry NHS virus being the perfect example of how critical this is.

There are people out there who could take on these roles if they were given the training.  Businesses must start investing in their future and train up current staff or provide training for candidates with the right kind of aptitude.  There is a vast untapped pool of talent in the Autistic community who with training and support could provide the answer to this dilemma (only 16% are in full time work and many may have the right aptitude).


Or is the lack of coding more of an issue? 

Although a lack of cybersecurity training poses inherent risks to the tech industry, it is not the most absent skill in workers according to employers. That award goes to coding. Almost half (44%) of tech employers said coding was the biggest skills gap, while 60% said coding will be one of the most important skills for entry-level tech employees.

Over one-third of tech employers (37%) are offering more training in coding to try and retain, develop their staff.

Workers also believe that coding is the skill that was not sufficiently covered in their training, after cybersecurity (30%)

Offer flexibility not quirky benefits

Employers are realising they need to reach out to different demographics, and get entry level talent into their businesses.

The top six initiatives employers are running include;

  1. Flexible working (52%)
  2. Bonus payments (36%) – (higher salaries 35%)
  3. Ongoing in-house training (31%)
  4. Stimulating/fun office environments
  1. Great location
  1. Quirky benefits (4%)

This falls in line with what candidates are looking for – flexible working being their key motivator for working for their current employer (52%), followed by bonus payments (36%), higher salaries (35%) and ongoing in-house training (31%). Quirky benefits, however, was their least desired perk, with just 4% of workers saying they would have liked to have been offered these.

Flexible working is becoming more common but many employers have yet to embrace it.  There are certainly pros and cons and it depends on how much team work is involved in the role as to whether it is always suitable

So what should we be doing to close the skills gap?

There was much discussion at the Roundtable about how we can improve on the many issues surrounding the skills gap.  The consensus was that much more could be done at the Entry Level stage with apprenticeships and advice

Businesses must visit schools and colleges

We need to grab the attention of today’s youth - 8/10 millionaires are said to be in Tech and it’s the fastest growing area

Businesses should be speaking to schools and colleges to offer apprenticeships.  There is a great benefit for both sides as young people get trained well but at a lower cost to the business.  Interestingly apprenticeships are now open to all ages rather than just school or college age and there may be distinct benefits to both businesses and workers opening up their minds to new career opportunities. 

The recruitment industry should be working closely with clients and encouraging them to visit schools and colleges to speak.  Recruiters themselves are perfectly placed to advise pupils on their options and the current state of the market

Is Careers Advice good enough?

It appears that the overall level of careers advice is often poor from schools to university level.  A considered focus on this from Government to create truly useful information that all careers advisors could use would be a great step in the right direction or a higher level of careers advisor with a deep level of insight across a wide range of industries. 

A job as a Careers Advisor might be perfect for an ex recruiter.  In the short term, however – companies should be getting out to a wide range of schools and colleges and getting their name well known in local areas as an absolute minimum

Do we need more Tech grad fairs?

Technology as a career needs to be more attractive to young people and they must be made more aware of what is really out there.  Let’s show how exciting it can be but also reveal a slice of reality in that if they want a job that is future proofed and allows them to buy the nice things in life it could be the one of the few safe options.

An easy hackathon with exciting prizes could be a great way of getting students involved with a real sense of achievement and hopefully the start of a new passion for tech

Let's all help our young people create a great future!

Added 6-Dec-2017