Technology skills a problem
A CRITICAL shortage of skilled IT workers is slowing growth for many companies and forcing salary costs to spiral as they battle to recruit technology staff.
“There’s a big gap between what people learn at university and what they need at work. Why are universities not stepping up to the challenge?” said a speaker at a recent discussion hosted by software company SAP. “We have too few people studying engineering,” another complained. “Just headhunting to get skills is a merry-go-round where the costs are increasing,” said a third.
The only surprise is that the first speaker was from Germany, the second from Belgium and the third from the UK. SA is not alone in struggling to find enough technicians to keep its IT running. The discussion was triggered by research from the Economist Intelligence Unit (EIU) confirming the war for talent is escalating. Businesses in developed and developing countries alike are finding it harder to recruit and retain skilled workers.
SA is still suffering from its legacy of denying the vast majority of people a decent education. Yet similar problems are hitting countries where the education is supposedly world-class. One reason is that many IT companies shelved training programmes in the slump a few years ago, and snubbed universities that asked for their help in designing better courses.
“The gap between the skills that companies need and those being provided is widening,” the EIU report says.
As IT lost its image as a sexy, well-paid industry, young people no longer found it attractive. Now that cocktail of neglect, apathy and disinterest is taking a global toll.
Falling birth rates in developed countries, the quest for a better work-life balance and the retirement of the baby-boomer generation compound the problem.
Of 944 executives polled by the EIU, two-thirds expect recruitment and retention to get tougher. They also lament the inability of new recruits to manage change, think strategically, communicate effectively and solve problems.
Many executives are considering rehiring retirees and mothers. More than half will look overseas and almost half plan to help schools and universities improve their curricula.
SAP employee relationship executive Claus Heinrich says the best way to retain staff is to keep them stimulated. “People want to be in challenging jobs among winners. They want career development plans.”
Keeping talent is tricky, agrees Stephan Raemaekers of Deloitte Consulting in Belgium. “We are seen as an extension of the education system. People come to us knowing they can learn a lot, and after four or five years we start losing them.”
Companies trying to recruit in emerging countries are struggling too. IBM’s Global Business Services division is growing so rapidly in India that it needs to hire 1500 people every month, says spokesman Tom McKay.
Emerging market employees are hugely motivated by money, McKay says, but companies must also help them to progress and grow loyal to the firm by creating interesting opportunities and letting them work abroad to boost their skills.
Poaching from rivals only drives up costs without increasing the skills base. “Employees are not being developed. They are just being paid more for existing skills,” says McKay.
Even emerging nations can no longer count on an abundant supply of cheap labour, the EIU report says. Despite rapid population growth and numerous young people entering the workforce, competition for talent is rising. In Russia, salaries for some senior executives have reportedly risen 60% in a year.
Half the executives polled in emerging nations complain top talent is lured abroad. Yet they are learning how to hang on to people, or get them back. Last year more than 40000 Indian IT workers returned from the US and the UK to Bangalore in a trend dubbed “the brain gain”.
Helmut Kremar of SAP’s University Alliances organisation says companies must take a fresh look at retired people “and see if they still have a few good years in them. It’s a worry that people aged 17 or 18 are not excited about this industry. They see IT as relatively boring.”
Kremar says companies must also conduct extra training, as “the people who had the right skills a few years ago don’t necessarily have the right skills now as technologies change”.
Other ideas are to encourage workers to recommend friends, and to design incentives for people at different stages of their careers. Young workers may be excited at a chance to travel or work abroad, while married workers may prefer stability.
In the survey, 62% of respondents said flexible working arrangements would be more effective than simply offering higher salaries.
Working closely with schools and universities is another way to ease the strain, or collaborating with other companies to run training initiatives. Reskilling internal candidates, training the best potential new recruits and luring back mothers and retirees are other smart ideas.
Higher salaries are still the best incentive in emerging markets, the report says, and many companies in SA have taken that to heart. IT salaries in SA are now so competitive that they are on a par with European wages, says SAP’s global head of field services, Bernd-Michael Rumpf.
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