By Huw Martin
The ever-increasing demand for IT skills, particularly within our large financial services clients, has reached a fever pitch. Customers are using every channel to market to find software engineers, developers, architects and so on, and are still finding the task incredibly challenging.
Where have all the candidates gone?
This was a question I heard one client ask in an agency briefing. The answer is well known and is in no small part down to the decisions over the past 10–15 years around the outsourcing and off-shoring of development skills by many of the major employers in Scotland.
What this did was limit the opportunities for graduates over a sustained period of time, meaning we restricted the local demand, which in no doubt affected the local supply. I understand the rationale given the immediate cost savings at the time, but can’t help think that we are paying for these decisions now given the explosion of the digital world and increased demand that has brought.
I wrote an article in Business Insider (approx 10 years ago) which tackled the question; Where are the architects of the future going to come from? It wasn’t mind-blowing stuff in all honesty, but it posed the question that if we keep (en masse) offshoring our development, where will we grow our own software engineers to design our future systems?
We now face the well-documented, ever-increasing challenge of finding people with the necessary skills and experience, and for many organisations, the need to hire in large numbers to stay competitive.
Companies are paying more and more for technical skills, but there are risks to this approach. At some point it is going to become unsustainable and will definitely lead to a new batch of jobs being chopped up and sent elsewhere – off-shoring to ‘cheaper’ parts of the world – sending the supply and demand spiral downward again.
We are already seeing this in the UK, in a slightly different way, with many London-based companies looking to ‘nearshore’ to Scotland, as the cost per hire is so much lower than in major hubs like London, New York, Paris, and Singapore. The costs aren’t as low as offshoring to further-flung regions of the world, but it’s certainly a medium-cost option.
What we cannot escape though is the need for a bigger technical talent pool – saving money isn’t enough to future-proof our economy.
What can we do to address the skills shortfall long-term?
Given these prevailing market conditions, we started to think about what can be done to get people talking holistically, for the good of our industry and not just purely from a position of competing self-interest.
Can companies share ideas and challenges, and work together to creatively innovate to alleviate some of the concerns raised by the landscape we are in?
In 2014 we set up The FS IT Skills Panel; a group of senior IT leaders from a range of financial services companies, linked in with ScotlandIS and Skills Development Scotland, to get the conversation started, and to see if there is an appetite for collaboration between some of the largest hirers in Scotland’s IT sector.
The panel has grown from an initial group of advocates to a forum which comprises of most of Scotland’s large FS organisations, and has recently included representation from the student community to help shape some of the decisions of the group.
In the meetings to date we’ve introduced many different groups to the panel; whether it be a small private company who organise hackathons for students, to a government body to help coordinate activity with schools and academia (STEMNET). There are lots of innovative ideas being generated in the SME space, and with backing from larger, more established companies, together we can help the wider economy.
They are only small steps, and we’re sure they are being replicated across the country no doubt, but when people act altruistically and try to do things for the greater good then there is hope that we can alleviate some of the challenges we mutually face, and make sure they don’t happen again.