Tech & Work

Is the tech skills crisis just a myth?

If tech professionals are in such demand, why aren't salaries higher and unemployment lower?

It's often claimed we are suffering an IT skills crisis of epic proportions: just recently the European Commission announced that by 2015 there will be an estimated shortfall of 700,000 IT professionals across Europe.

And yet, academics have told TechRepublic there is little hard evidence of a shortage of  IT workers, as neither pay levels nor employment rates for IT professionals have reached the levels that might be seen in a skills crisis.

Pay levels for IT workers in the UK over the past eight years or so have not undergone the large shifts you would expect to see in an industry suffering from a skills crisis, says Dr Jonathan Liebenau, reader in Technology Management at the London School of Economics.

"In looking at historic wages we don't see the sort of fluctuations that would support the argument that employers are finding it consistently difficult to find people," he said.

"There's a consistent setting of a baseline where IT people are paid no more than accountants or lower, middle-level employees of a legal office in a large firm, or other such skilled workers."

Ron Hira, associate professor of public policy at the Rochester Institute of Technology and research associate at the Economic Policy Institute in Washington, said that pay for IT workers in the US has also risen broadly in line with that of other professional groups.

According to the government's technology skills body e-skills UK,  the average gross weekly earnings of full time IT and telecoms professionals are 41 per cent more than the UK average wage.

But pay levels for all skilled professions generally track above the average wage, according to the Office for National Statistics, UK degree holders earn an average of £12,000 a year more than the £17,800 earned by non-degree holders - some 67 per cent more. So the higher salaries of IT workers can't necessarily be attributed to high demand.

Employment

Levels of unemployment among IT workers are also not consistent with what would be expected for a profession in high demand, Liebenau said. He said the unemployment rate among IT-skilled people has "very consistently" been half of the general unemployment rate.

"We would expect that IT-skilled personnel who are constantly being chased, according to all the surveys of employer's intentions, would have very, very low unemployment [in relation to general employment levels], especially as systemic unemployment rises. Nevertheless, the unemployment of IT-skilled personnel is tracking at almost 50 per cent of the national unemployment rate," he said.

And despite the warnings of skills shortages in the coming years, each year industry finds enough IT workers to satisfy its demand, Liebenau added.

"If you look at historical surveys of industry they'll always say they haven't got enough people for the future and yet they'll always demonstrate that the year before they found enough people," he said.

In the US, Hira said, unemployment among IT workers is about double that of other college graduates. IT workers also generally take positions that they're offered, he said - not what would be expected in employees' market.

Why a skills shortfall isn't a skills crisis

While the long-term trends may show little evidence of a widespread IT skills shortage, there does appear to be growing demand for particular IT skills, for example application development.

UK IT recruitment specialist Computer People found that demand for .NET/C# developers was more than seven per cent higher in February 2012 than it was in 2011, with increased demand for all developer and IT project manager roles.

Simon Churan, managing director of IT recruiter Certes, said that there had been particular demand for niche skills like PHP coders or software engineers specialising in embedded systems.

But he added there has "always been skill shortages [in IT], even at the peak of the credit crunch", adding businesses always find a way to meet demand such as retraining staff or, more recently, by acquiring workers made redundant from the public sector.

So what is fueling these claims of a skills crisis? According to the LSE's Liebenau, one reason is many reports about IT skills demand are based on interviews with the likes of HR directors, who have a "clear incentive" to report that they need higher skilled people, in order that they have a larger talent pool to choose from.

About

Nick Heath is chief reporter for TechRepublic UK. He writes about the technology that IT-decision makers need to know about, and the latest happenings in the European tech scene.

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