Digital Economy Dispatch #138 -- The 3 Elements of a Digital Skills Blueprint in the Challenge to Find Tech Talent

Digital Economy Dispatch #138 -- The 3 Elements of a Digital Skills Blueprint in the Challenge to Find Tech Talent
2nd July 2023

In the digital era, there has always been a search to find tech talent. This became very clear to me when I was a young lecturer in computer science at the University of York over 30 years ago. An undergraduate student of mine reaching the end of his course had already found a coding job in London but was unsure if he should take it. He thought the salary was too low. I explained that the offer he had was more than twice my university lecturer’s salary even though I already had a PhD and several years commercial software development experience under my belt. He took the job and headed off to the city.

That was in the early 1990s when there was a renewed urgency for software to feed the needs of enterprise computing across many domains. We had entered an exciting time for digital adoption and those with the right skills were in high demand. This was one of several reasons that led me to move across to the USA where at the time the opportunities (and salaries) were far in excess of those in the UK. The rest, as they say, is history.

Its Déjà Vu All Over Again

While my experiences are long in the past, it is clear that we are now facing similar challenges as digital transformation enters the next phase of its development. Recent events such as the rush to deploy generative AI solutions has added even more pressure to a tight market of tech talent driven by a combination of factors. The shortage of tech talent is attributed to many issues, with 4 underlying conditions causing most concern:

1. Rapid Technological Advancement: Technology is advancing at an unprecedented pace, creating a high demand for skilled professionals who can keep up with emerging trends and work on cutting-edge projects. The skills required for these new technologies often outpace the rate at which the education system can produce graduates with relevant expertise.

2. Increasing Digitization Across Industries: The digitization of various industries, such as finance, healthcare, manufacturing, and transportation, has led to a surge in demand for tech talent. As more companies undergo digital transformation, they need skilled professionals to develop and maintain software, design user interfaces, manage data, and ensure cybersecurity.

3. Limited Supply of Qualified Professionals: The supply of tech talent has not kept pace with the growing demand. Historically, the education system faces challenges in producing enough graduates with the necessary technical skills. Additionally, the number of specialized training programs and coding boot camps is still relatively small compared to the demand.

4. Global Competition: The shortage of tech talent is not limited to a specific region but is experienced globally. Companies worldwide are competing for skilled professionals, creating a talent crunch. Tech hubs such as Silicon Valley, New York, London, and Bangalore have traditionally experienced high demand, but the shortage is now expanding to other cities and countries.

Each of these challenges requires focused responses and we see many different efforts around the world to increase the supply of tech talent. However, we also need to consider the implications this has for today’s organizations.

Wider and Deeper

While many of these tech skills concerns have been broadly discussed for some time, the 2023 Business Barometer report produced by the Open University and the British Chamber of Commerce add some useful additional perspective to the current UK situation. Based on a substantial survey of 1250 companies across many sectors in April/May 2023, the report highlights the breadth and depth of the talent gaps being faced in the UK. It takes a wide view of skills needs and finds that 73% of UK organisations are currently experiencing skills shortages, which remains one of the major challenges facing employers.

Some of the main findings include:

Beyond some of the more obvious conclusions from this survey, the report also focuses on several less straightforward concerns raised by the data that are particularly pertinent for those interested in maintaining momentum on their digital transformation journey.

The first of these is the extent of the negative impact these shortages are having on existing staff. This was highest in public sector, heath, and third sector organizations. Here, there is a great deal of pressure on existing staff to fill gaps, work extra hours, and take on additional roles. The impact, inevitably, is a more brittle and less resilient organization reliant on a smaller number of key personnel. It is a challenge being experienced in many IT teams right now, with obvious risks for both the organization and the individuals involved.

Second, organizations are placing a lot of faith in their ability to reskill and upskill employees quickly to plug gaps in their capabilities. Yet, there seems to be no obvious consensus on the best way to achieve this. The result is that a broad range of approaches are being adopted. Overall in this survey, 44% said they intend to use short courses with certification, 41% intend to use coaching or mentoring, and 35% intend to use short courses without certification. A smaller, but still significant proportion intend to use more structured or longer-term training courses such as apprenticeships (25%), industry accredited courses (23%), vocational qualifications (18%), or higher level or degree apprenticeships (9%).

Unsurprisingly, there is also a wide variation in the way organizations would like this training to be delivered. Only 12% of organisations preferred completely in person classrooms and only 5% preferred completely online classrooms. Around two-thirds (62%) preferred a mix of both. This raises an important challenge to educational groups who are still evaluating different methods of delivery to determine the most effective forms for mix mode delivery.

Third, the report highlights several additional risks for business leaders. The current market turbulence combined with staff shortages has limited opportunities to carry out sustained strategic planning activities and keep digital plans up-to-date. Particularly in smaller organizations, this has blocked their ability to spend appropriate effort building detailed plans and considering future directions. Lack of agility in planning is often cited as a critical factor in ensuring digital technologies are adopted appropriately, and highlighted in high profile digital change programmes such as the UK Tax system when they fail. This has the potential to derail organizations working hard to meet the current near-term needs but without a wider perspective to guide their future steps.

A Digital Skills Blueprint

All of this uncertainty makes for a confusing time for organizations looking to understand their current tech talent needs and build a resilient skills strategy capable of supporting their digital transformation journey for the short, medium and longer term. Broad experience supported by the latest reports on the current shortages of tech skills point to key actions that organizations must continue to prioritize to build an appropriate digital skills strategy that addresses these 3 concerns.

1. There is a significant shortage of tech talent in the UK, with a large majority of organizations experiencing skills shortages.

• Action: Address the talent gap by focusing on strategies to attract and develop tech talent, such as enhancing educational programs, supporting specialized training initiatives, and promoting careers in technology.

2. Existing staff are under pressure to fill skills gaps, leading to increased workload and potential risks for organizations and individuals.

• Action: Provide support and resources for existing staff, such as training opportunities, mentoring, and workload management, to alleviate the strain and maintain organizational resilience.

3. Organizations are relying on reskilling and upskilling employees to bridge the skills gap, but there is no clear consensus on the best approaches.

• Action: Foster collaboration between educational institutions, industry experts, and employers to develop effective reskilling and upskilling programs. Offer a mix of short courses, coaching, mentoring, apprenticeships, and industry-accredited courses to cater to different learning preferences and needs.

By placing a consistent focus on these actions, organizations, educational institutions, and policymakers can work together to alleviate the tech talent shortage, support existing staff, and ensure a sustainable and resilient digital future that is critical for all of us.