You could be forgiven for being confused at the state of the IT industry at the moment. On the one hand there are endless reports about globalisation and off-shoring taking the UK’s entry level and technically skilled jobs to India and China. On the other hand there are continual warnings of a growing IT skills crisis. It seems contradictory to warn of a skills shortage when there are actually concerns about the number of jobs leaving our shores.

So what are the issues and are they as contradictory as they seem? Are we heading for a major decrease in the number of IT jobs, or alternatively, are we facing a decline in the number of candidates for jobs?

It is true that globalisation, and the resulting off-shoring, is leading to an increasing number of UK IT functions heading to the cheaper east, where Chinese and Indian labour costs mean lower operational costs for UK companies. While there is some optimism that as Indian costs rise some companies may recall many functions to the UK, it is more likely that new sources of labour will be found in China, Eastern Europe and maybe even Africa.  Unfortunately, as companies make a significant saving by moving support and development positions abroad, they face the prospect of struggling to fill more senior positions later down the line.

Support and development roles are traditionally an entry point where most graduates and apprentices begin their careers. With many of these functions moving abroad entry level candidates are struggling to get their feet on the proverbial ladder. According to a new report by the Association of Technology Staffing Companies (ATSCO)(1)  there is a real shortage of candidates looking for second or third jobs because entry-level positions are moving offshore . The report highlights how low level salaries have stagnated over the last 5 years as the need for support level positions has declined (2). Conversely the salaries of managers have increased by 20%. Demand for leaders having increased because fewer candidates are able to work their way through the conventional career routes.

As the media is reporting there are certainly reductions in jobs resulting from the wide scale outsourcing policies of many UK organisations, particularly in the area where most new entrants seek to penetrate the market. On face value one could conclude that globalisation will lead to a sea of unemployment across the industry, however, the resulting shift in the industry as it moves to adapt to these changes is in itself leading to a skills crisis across the industry. The prediction of the key thought leaders in this area, such as e-Skills (3) CEO Karen Price , is that while lower level technical roles move to the east, the UK will shift its emphasis to higher level management and design. The view is that while globalisation leads to reduced vacancies in certain areas, it also facilitates growth through lower development and delivery costs creating opportunities in other areas such as high level design. This shift will facilitate the UK in becoming a global leader in new innovative ways, however the negative impact of this change shift is beginning to appear and the problem begins at the grass roots level.

There has been a 50% drop in the uptake of Computer related degree courses in 5 years (4), with the number of children taking IT courses at school also declining - inevitably augmenting the regression at higher education level. There appears to be a number of key reasons for this decline. Firstly, the way IT is taught at schools has received much criticism from some areas for failing to inspire students (5). The curriculum apparently failing to encourage children to pursue a career in IT as the content of the course is often uninteresting. Secondly, a career in IT is often seen as boring and for ‘geeks’. There is a lack of understanding about the range of roles available and how there are endless opportunities to pursue an interesting and exciting vocation, as well as a lucrative one. Finally, there is a fear that many jobs are moving abroad, the majority of which are at entry level, and thus getting on the career ladder is seen as too difficult. This fear is based on reports, as we have already discussed, highlighting the negative impact of globalisation on the industry.

This drop in suitable graduates and apprentices inevitably threatens to limit the number of available candidates in the future. Moreover, the problem is compounded by the candidates who do make it on to the first rung of the ladder. Many often fail to match the expectations of their employers. The number of employers concerned at their employees’ lack of soft skills is significant. The CIPD’s annual Learning and Development report (March 2008) cited that 66% of employers felt that new employees were deficient in communication and interpersonal skills; 54% cited a lack of management and leadership skills; and 48% stated that their new employees lacked business skills or acumen, as well as strong commercial awareness (6).  With the National Curriculum focussed on the achievement of academic qualifications, it seems that the development of soft skills has fallen by the wayside as has the need to genuinely prepare students for the commercial world. This slows the progress of potential future leaders as employers seek to bring them up to commercial ‘scratch’ before fast-forwarding their careers.

When it appears that the future of IT in the UK will be reliant on business minded technical leaders, it is concerning that our education system is failing to deliver either communicative commercially minded students or even enough technical graduates and apprentices at all.

The two seemingly contradictory issues of job losses and a skills shortage are intrinsically linked. As more functions move to Asia the UK shifts its emphasis to high level operations, choosing to take advantage of the cheaper development costs of the east and leading the technical world through innovation. With fewer entry level positions available there are fewer candidates working their way towards top level positions, and with fewer entry level positions fewer students are opting for a career in IT, further compounding the issue. Globalisation has forced this change in the industry and ultimately led to both these issues. However, the real problem stems from the delay in preparing the grass roots to adapt to this revolution, and this is where the difficulty must be addressed and fundamental changes made.

e-Skills, the UK Sector Skills Council for IT and Telecoms, is dedicated to this task. They work to build bridges between schools, universities and businesses to increase the uptake of IT by students and to ensure that the education they receive prepares them for the world of business. They have created various initiatives to encourage children in to IT including Computer Club for Girls (CC4G), an IT Diploma designed for 14-19yr olds and the Make IT Happen competition for 9-11yr olds at primary school. They also work with universities to create commercially relevant qualifications such as the ITMB (IT Management for Business) degree.  The not for profit organisation has also built partnerships with companies such as Capgemini, IBM, EADS and Orange to establish their requirements. The involvement of so many of the world’s leading IT employers in various e-Skills projects demonstrates the growing realisation that companies need to adapt in order to maintain their talent pipeline. Rather than mourning the loss of low level support roles and development