The IT skills gapCan you see the talent?

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The IT skills gapCan you see the talent?

IntroductionThe IT skills gap is a problem that never seems to go away. For more than a decade, IT industry experts have talked about the need for the technologyindustry to find fresh talent, and potential solutions to the intractable challenge.Yet research suggests the gap grows bigger with each year that passes.

The IT skills gap is the difference between existing knowledge and theexpertise required for a business to meet its objectives. Although a considerable challenge for our industry, the skills gap phenomenon is by nomeans restricted to the IT profession.

Manpower Group’s ninth annual Talent Shortage survey1 found that 36 percent of employers globally reported talent shortages in 2014, the highestpercentage in seven years. Businesses around the world, across a broadrange of sectors, are finding it increasingly difficult to find the talent theyneed. Yet the problem is particularly acute in the IT industry.

Where is the IT skills gap?The BCS 2014 Digital Leaders survey2 suggests as many as 57 per cent ofdigital leaders believe there is a need for enhanced IT skills among theirexisting workforce. The skills gap is such that just over a fifth (21 per cent) ofthese executives said that nurturing the talent and skills of their IT workforcewas among their top priorities.

The IT skills gap will remain a key agenda item for CIOs through 2015 andbeyond. Technology has become the underlying infrastructure for modernbusiness processes and operations. Organisations have become more relianton IT than ever before, and the employees that use these systems and services are increasingly demanding about what they expect to achieve fromthe technology.

For CIOs, the fast changing demands from businesses and end-users createa significant headache. In some cases, line-of-business employees areresorting to shadow IT – purchasing their own IT systems and services,sometimes without the knowledge of the CIO. A recent survey of senior executives by the Cloud Security Alliance3 found that 72 per cent of IT managers did not know the number of shadow IT apps running within their organisation.

Shadow IT is just one issue. CIOs will face constant challenges, even in thecases where they are consulted about the use of new systems and services.By identifying a business need for a new technology, employees may well

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demand access to a product – or the in-house development of a tool – whichis beyond the existing skill set of the existing IT department. The ever-quickening pace of IT development means new technologies, applicationsand services are required – and these requirements create a demand forskilled IT specialists.

What IT skills are in demand?Gartner suggests the technology priorities of businesses have evolved andare now focused on what it refers to as ‘the nexus of forces’. The analystsays these four forces – cloud, mobile, social and information – are at thecore of CIO spending strategies. BCS research identifies a similar trend overthe next three to five years, suggesting as many as 54 per cent of IT leadersbelieve information security is a key concern, followed by big data (42 percent) and cloud computing (40 per cent).

CIOs then face a new digital reality, where employees require on-demandaccess to information. This knowledge is required across multiple formatsand devices, regardless of location, and access to crucial business intelligence must be provided in a secure manner. IT leaders, as theguardians of internal technology provision, need the best possible resourcesto enable a transition towards digital business. Skilled IT professionals are a key component of this resources mix, yet many CIOs struggle to find experienced individuals.

Only 8 per cent of respondents to the BCS 2015 Digital Leaders survey4 felttheir organisation had the resources to address the management issues andIT trends that their company prioritised. The deficit in expertise means businesses are on the hunt for new talent. In the survey, 53 per cent of firmsreport that they require additional and suitably qualified IT staff. However,these IT skills gaps can be tough to fill. Trade association CompTIA5 recentlyreported that 68 per cent of firms have a ‘very challenging’ time finding newIT staff.

The CBI6 says 39 per cent of UK businesses are struggling to recruit workerswith the advanced science, technology, engineering and maths (STEM) skillsthey need, with 41 per cent of firms saying shortages will persist for the nextthree years. The high demand for quality IT staff also creates competitivepressure for talent. Some reports suggest wages for technology professionalshave risen by as much as a quarter during the past 12 months.

The pressure to recruit IT is only likely to increase. While companies continueto demand workers with expertise in digital areas like cloud, mobile andsecurity, new developments in related areas of IT will create a clamour forother skilled professionals. An ever-increasing amount of devices are connecting to the network. Analysts believe 2015 could well prove a tippingpoint in regards to the Internet of Things, with more companies and consumerslooking to find ways to make the most of the upsurge in connectivity.

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As more devices join the network, so the amount of information being collected rises. Businesses recognise the huge potential value of analysingbig data. By elucidating trends from data, organisations can fine tune operations, improve customer service and increase profitability. The potentialvalue of knowledge means the data scientists who can analyse such trendsare in high demand. Consultant McKinsey7 predicts a shortfall of between140,000 and 190,000 data scientists by 2018 in the United States alone.

What strategies can CIOs adopt to deal with the IT skills gap?There is a growing chasm between the knowledge businesses require andthe expertise available. CIOs looking to bridge the skills gap must addressthe challenge head on. Yet many organisations still fail to create an appropriate approach, with Manpower Group reporting that 22 per cent ofglobal companies are not pursuing any strategy at present.

So, where should CIOs start?

Decide whether to build or buyOne of the key issues for IT leaders is sourcing talent. Building a strong internal technology team will give CIOs permanent access to technicalexpertise. As project demands change, IT leaders will be able to use internaltalent to give business leaders the systems and services they require.However, building a great internal IT team during a skills gap is no easy task– and the cost of replacing leavers is high.

Staff turnover costs British businesses at least £4.13bn every year, as newemployees take many months to reach optimum productivity levels according to Oxford Economics8. IT is the sector most affected by high staffturnover, with an overall figure of £1.9bn per year. The research suggeststhe average IT worker takes more than seven months to reach their peakproductivity, at a cost of £31,808 to the business.

In these circumstances, contracting can look an attractive option.Outsourcing allows an element of flexibility and gives employers the opportunity to change staff numbers in line with business demands. Suchelasticity is likely to be crucial in the future, especially as more businessesbegin to use the cloud to increase or decrease IT resources on-demand.

CIOs looking to investigate the use of external expertise should also look toextend their ecosystem of potential partners. By building relationships withstart-ups, for example, IT leaders can tap into niche expertise in a whole hostof areas of digital development that might be beyond the traditional skillsbase of their in-house team.

Focus on attracting and retaining talentOcado CTO Paul Clarke uses innovative and unusual techniques to attract talent. One such approach was his recent ‘Clean Sweep’ initiative. Ocadosprayed stencilled advertisements on the pavements outside some of the

biggest IT firms in London, offering people the opportunity to talk to currentemployees about working for their technology division. Clarke says the initiative is representative of Ocado’s innovative approach to business, wherethe organisation gives IT people the freedom to play and create great solutions for the business.

Once you have attracted your IT staff, they need to be kept eager and happy.To boost retention, National Trust CIO Sarah Flannigan prioritises staff development. She was parachuted into the IT leadership role at the Trust,having previously worked in senior sales, marketing and operations positions.As a CIO who developed her skills across the business, Flannigan is keen forIT staff to be exposed to a similar broad church of experiences. Technologyworkers at the Trust are encouraged to literally work in the field, spendingtime learning about the kinds of activities that take place at the Trust’s properties across the UK.

Diversify your talent poolManpower Group reports that 23 per cent of global organisations with talentshortages are preparing to adopt alternative work models. One in 10 organisations have increased their focus on their talent pipeline, while otheremployers are redesigning existing work procedures, offering flexible or virtual work arrangements.

When it comes to re-training, Manpower Group says more organisations areusing new recruitment practices and redefining qualifying criteria to includeindividuals who may lack some of the required skills or formal qualifications.The human resources specialist reports that 25 per cent of global firms aresearching for new talent sources, typically by recruiting from untapped orunder-tapped talent pools, such as youth, older workers, women and militaryveterans.

There is certainly room for a strategy that helps find, manage and thendevelop the skills of a more diverse talent set. Technology remains a predominantly male profession, with Gartner suggesting just only 14 percent of CIOs are female. The IT industry could also benefit from tapping intoan ageing and experienced workforce.

Ocado CTO Paul Clarke appreciates great talent needs to be sourced from alldirections. He says Ocado looks at talent first and sometimes has to acceptthat the best people might not fit with a regular pattern. Clarke says thediversity that comes through that approach is crucial and he says CIOs mustthink outside the box when it comes to IT recruitment.

Invest in your staffIn a skills gap, managing and retaining talented people is the key to gainingan edge over the competition. Successful CIOs involve their IT people andchampion strategies that are dedicated to their ongoing development.

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SFIAplus9 is the international competency framework based on the SkillsFramework for the Information Age (SFIA) which supports organisations innurturing their IT professionals and growing the IT function. The frameworkprovides consistency across roles and levels, and between departments andgeographical locations. IT leaders are able to use it to align their IT capabilitywith strategic business goals, identify gaps and implement the developmentrequired to fill them.

The framework also offers transparency around the career pathways availableto employees, both within the organisation and the wider profession. Its collaborative development style encourages individuals to plot their own professional development and take responsibility for reaching their careergoals – which in turn boosts productivity.

Consumer products giant Kimberly-Clark uses SFIAplus as a foundation for itsIT talent management programme. Director of ITS Program ManagementOffice, Gene Bernier, says it provides the flexibility to tailor role definitions forthe wide range of IT roles they have in their organisation. Every member oftheir UK and US teams has an industry-aligned corporate role profile and aclear understanding of exactly what is required from them.

Partner with academic institutionsThe IT skills gap is fed by a severe lack of new entrants. The Royal Academy of Engineering10 recently estimated that the minimum number of STEM graduates required to keep the industry fully resourced stands at approximately100,000 a year, but only 90,000 graduates are coming out of university with aSTEM degree – and up to a quarter of those go on to choose non-STEM careers.

The CBI is urging the UK Government to consider financing a cut in tuition feesfor some STEM courses, developing new training routes for existing workers,and creating a one-year crossover qualification at 18 for young people toswitch back to STEM in preparation for a related degree – an approach used bythe legal profession after graduation.

The CBI is also keen to promote new collaborative solutions. Some firms offeron-the-job placements during education, and the Economist Intelligence Unit11discovered as many as 71 per cent of executives believe employee loyalty andhigher retention rates are boosted by an investment in post-secondary education. For many CIOs then, the message is to engage with education institutions and their students as regularly and as often as possible.

Adopt alternative work modelsNew entrants to the workplace present further challenges. Commentators suggest newer and younger entrants have different expectations regarding thechanging nature of the workplace. Much analysis has been dedicated to theneed to appeal to so-called Generation Y or Millennials, the cohort of workersborn between the early 1980s and 2000s who, so the research suggests, havedifferent approaches to work and expectations of the workplace.

Meeting these expectations is challenging. In a highly competitive labourmarket, it is important to demonstrate that your business offers the kind offlexible work structures and collaborative environments that potentialemployees demand. However, new entrants will still be expected to fit withinan organisation’s existing model of work. Generation Y, for example, mightspend proportionately more time on social networks than incumbentemployees, but they will probably enter a workplace that is reliant on earliercommunication platforms, like email.

CIOs and their executive colleagues should take time to get to knowMillennials. New workers are often assigned mentors to help create asmooth introduction to the workplace. Such programmes can provide clearbenefits, but rewards can also come from an alternative approach. Someorganisations are using reverse mentoring, where new entrants educatesenior managers about some of the changes that are taking place outsidethe workplace and which are likely to seep into everyday working practices.

The confluence of digital transformation and a younger, more demandingworkforce, means IT leaders will have to be flexible. Engaged CIOs spend asmuch or possibly more time outside the IT department as they do workingwith their technology peers and partners. IT leaders looking to meet thedemands of line-of-business employees must speak in terms that the rest ofthe organisation can understand. Soft communication skills, in the digitalage, are more important than ever before for IT professionals.

ConclusionThe IT skills gap remains a challenge for businesses around the world. All the signs suggest that filling the gap will only become more difficult asorganisations continue to fight to secure the best analytical talent. CIOs andtheir executive peers must be as proactive as possible. By creating a strategythat considers recruitment, development, training, retraining, partnershipsand flexibility, leading executives can help their businesses deal with the skills shortage.

CIOs should not be scared to take a radical approach. The competition fortalented IT staff is high – approaches that include start-up communities, on-the-job training schemes and cross-organisation partnerships are likelyto be rewarded. In the end, what have you got to lose? If it is left unaddressed, the IT skills gap will negatively affect your own organisation.Change your approach to training and development now and you will be wellpositioned for the ongoing digital transformation.

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About the authorDr Mark Samuels is a business journalist who specialises in IT leadershipissues. Formerly editor at CIO Connect and features editor of Computing, hehas written for various organisations and publications, including theEconomist Intelligence Unit, Guardian Government Computing, ComputerWeekly, ZDNet, Tech Republic, IT Pro and Times Higher Education. Prior tobecoming a journalist, Mark completed a PhD on a jointly funded studentshipfrom Sheffield Hallam University and the University of Sheffield. His researchanalysed the use of IT in the retail sector. Mark can be found tweeting attwitter.com/mark_samuels

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References

1 www.manpowergroup.com/wps/wcm/connect/0b882c15-38bf-41f3-8882- 44c33d0e2952/2014_Talent_Shortage_WP_US2.pdf?MOD=AJPERES

2 www.bcs.org/upload/pdf/digital-leaders-report-2014.pdf

3 www.techweekeurope.co.uk/cloud/cloud-management/cloud-shadow-it-158846

4 www.bcs.org/content/conwebdoc/53934

5 www.slideshare.net/comptia/state-of-it-skills-gap-2014-summary-39986844

6 www.cbi.org.uk/media-centre/press-releases/2013/06/businesses-fear-skills- shortage-could-hold-back-growth

7 www.mckinsey.com/insights/business_technology/big_data_the_next_frontier_for _innovation

8 www.telegraph.co.uk/finance/jobs/10657008/Replacing-staff-costs-British- businesses-4bn-each-year.html

9 www.bcs.org/sfiaplus

10 www.computing.co.uk/ctg/analysis/2320912/the-it-skills-gap-a-genuine-problem-or- just-scaremongering

11 www.economistinsights.com/leadership-talent-education/analysis/closing-skills-gap

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