Outsourcing

UK stuck with ageing IT workforce as offshoring squeezes out starter jobs

The proportion of under-24-year-olds working in the UK IT industry has halved over the 10 years, with part of the blame for the shortfall placed on the offshoring industry of entry-level jobs.

"This is where so much of the promise of new jobs and opportunities lie."

The words of UK prime minister David Cameron in 2010, paying homage to the unfettered employment the IT industry would bring to the UK.

But for UK graduates this land of plenty hasn't materialised. The IT workforce is not being replenished by new entrants, with the proportion of 16-24-year-olds working in IT halving over the past decade.

The dwindling share of school leavers and graduates landing jobs in IT comes at a time when computer science graduates are the most likely of any university leavers to be unemployed, with more than 14 percent of comp sci graduates out of work six months after graduation. In comparison only one percent of those who studied dentistry or medicine were unemployed this long after finishing their course.

So why are people who've spent years studying computing not finding their way into the IT industry?

According to Karen Price, CEO of IT industry skills body eSkills UK it's partly a lack of opportunity: the UK has offshored many of the roles that would have given graduates their start on the career ladder.

"We do have a rapidly ageing workforce. For the last 10 years we've been outsourcing and offshoring entry level roles, we've almost exported them," she said.

Figures from eSkills, based on an analysis of data from the Office for National Statistics Labour Force Survey, show the proportion of 16 – 24-year-olds working as IT and telecoms specialists in 2012 accounted for six percent of the workforce, half what it was in 2001.

Price sees industry believes that industry is now addressing the job shortfall by bringing roles suited to new starters back to the UK.

"The tide is turning and people are desperately trying to bring jobs back onshore," she said.

"Entry level jobs are being created and there are vacancies but we seem to have lost this middle of the sandwich and that's something we need to rapidly pick up on."

However, despite Price's optimism the problem is in the past, the number of entry-level jobs in the IT industry is continuing to fall, in line with a decline in the number of vacant jobs in the UK IT industry as a whole. eSkills analysis of data from IT Jobs Watch found there were about 5,200 positions advertised for entry-level IT staff during the third quarter of this year, about 3.2 percent of 160,000 IT positions advertised overall. The number of entry-level roles posted is down six percent on the year before, as is the total number of IT jobs advertised.

Market data also indicates that the pace at which IT work is being contracted to service providers with large offshore hubs isn't necessarily slowing. 

India's largest IT services company Tata Consultancy Services, reported revenues from UK contracts grew 44 percent during the 2013 financial year. And while offshoring is only a subset of outsourcing, outsourcing as a whole continues to grow across Europe. According to the ISG Global Outsourcing Index the number of outsourcing contracts worth more than £5m signed by firms based in Europe, the Middle East and Africa has increased every year since at least 2004.

Earlier this year John Harris, chairman of The Corporate IT Forum, which represents some of the largest business users of IT in the UK, expressed similar concerns to Price about the detrimental effect of offshoring on the UK IT talent pool.

Are universities doing enough?

The question of what lies behind young people failing to find employment in IT is complicated by many factors, as the roles that require computing expertise differ hugely in the types of skills they require, as do the quality and nature of IT-related higher education courses.

Price said the high unemployment rate is also partly due to universities not giving IT graduates the mix of skills that employers want.

"There is a mismatch between what business requires of IT people and what university courses are offering in terms of content, and also the aptitude and attitude of some of the students applying to do it," she said.

"The absolute prize that every company is after is the hybrid individual, the person who can combine technical and business capabilities, along with good communication skills."

"There is an overprovision of courses that aren't relevant."

Dr Iain Phillips is chairman of the Council for the Professors and Heads of Computing (CPHC), which last year released a report identifying further factors contributing to unemployment among graduates who studied IT-related courses.

The report identified a number of issues, including that IT courses had more graduates from universities created after 1992 compared to those in the Russell Group.

"Lots of companies only look for first and 2:1 quality students and they're more likely to come from Russell Group institutions because they only take the best students in the first place," said Phillips.

"Those companies might well look at a first or a 2:1 from a discipline that's not computing and take those students into a computing job instead."

Phillips said determining what lay behind the difficulties faced by younger people in finding IT employment is a complex issue, and would be studied further by the CPHC.

"I would like CPHC to delve into these figures a bit more. It's an issue for us, we don't like the headlines that say 'Computer science has a low employment record'."

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.

3 comments
jsargent
jsargent

When the government refuses to take on small software houses in preference to large multinational corporations this is going to happen. They do nothing to encourage local software houses to get going by choosing these large companies to expand their monopolies in government systems. Of-course if you can make your mark independent of the government that is better but there is more that the government can do to open up markets so that the younger workforce can get moving.

stuartwilliamsus
stuartwilliamsus

No doubt the product for support and engineering from overseas outsourcing is mostly crap.  I just bought a PC from Dell and had to talk to ovrseas order support an amazing 10 - 12 times and each time it was a disaster.  When I asked for a supervisor, I got dial tone.  But the U.K. and U.S. need to be focusing on cutting edge business like clould computing, wireless solutions, etc. not fixing Sally Anne's mouse on the 3d floor.  Let the 3d world  have our grunt work.

gharlow
gharlow

Having worked many years as a software developer in the US, I have seen first hand the devastation of off shoring to our trade and indeed as an older developer I became frustrated by continuous layoffs where entire groups were replaced by cheap and often ineffective Indian development teams.

By my thinking as developers we can no longer ride the easy gravy train software engineering used to be, but must rather go off on our own and become entrepreneurs.