Is the IT skills gap driving outsourcing?
With a majority of businesses involved in the information technology sector now looking to become as streamline as possible in the wake of the current economic slowdown, operational efficiency has become more important than ever.
Central to this is employing the appropriate staff, with skills and knowledge at a premium and, according to a new report from the Confederation of British Industry (CBI), a further 730,000 science, technology and engineering jobs will need to be filled within the next six years, putting the net total at around 2.4 million.
Worryingly, however, the recent research carried out by the CBI in collaboration with the exams body Edexcel found that more than half of all UK employers fear that there will be a shortage of skilled workers to meet this booming demand.
Of those business leaders polled in the Education and Skills Survey 2008, 53 per cent agreed that the UK is facing a significant IT skills gap over the coming years, with growing numbers of young people leaving school or university without STEM (science, technology, engineering and mathematics) skills, a situation which is likely to cost the British industry dearly.
The study found that 56 per cent of employers are particularly worried about workers inability to use computers for even the simplest of IT tasks, with 69 per cent having recently invested more money in training to raise the IT skills of their staff.
John Cridland, deputy director-general of the CBI, said: "A worrying number of employers have little confidence that they will be able to plug their skills gaps. Too many firms also say poor basic skills are hampering customer service and acting as a drag on their business's performance."
Almost inevitably, this has led to a significant upturn in the number of UK companies either looking to recruit skilled workers from abroad or else outsource some or all of their IT operations, either to third-party specialists at home or overseas.
Of those businesses questioned, one third said that they would be looking to the rest of Europe to find STEM-skilled graduates within the next three years, with countries that have recently joined the European Union seen as an ideal source of skilled - and affordable - workers.
Indeed, growing numbers of firms are turning to this region in a bid to bridge the looming IT skills gap, though India still remains the most attractive location for recruitment or off-shoring work, with36 pent of those looking into the practice opting to invest here, while 24 per cent have turned to or will turn to China.
However, while the CBI has called on universities, schools and even employers to invest more time, money and effort into bringing the IT skills of those entering the workforce up to scratch, separate studies have also indicated that, even if this were achieved, the trend towards outsourcing would still continue relatively unabated.
Research carried out by Deloitte found that 64 per cent of managers cite cutting costs as the major driver behind the outsourcing of IT operations, with just 34 per cent arguing instead that it is the specialist skills offered by third-party providers.
Furthermore, given that the accountancy firm concluded that UK businesses are yet to tap into the full potential of outsourcing, it seems unlikely that there would be a major shift in keeping IT operations in-house even if the number of STEM graduates leaving British universities booms over the next few years.
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