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Skills shortages threaten UK tech sector growth

Image credit: Volodymyr Melnyk/Dreamstime

The largest digital leadership survey, Harvey Nash Group’s Digital Leadership Report, has found that the seemingly unending growth in the UK tech sector is now under serious threat as massive skills shortages reach an all-time high.

The report found that 61 per cent of companies intend to boost their tech investment and 66 per cent to boost their headcount. This represents increases of over a third on 2020 levels.

The ongoing skills “crisis” is worsened by employees – having taken the opportunity to rethink their priorities during the worst of the coronavirus pandemic – switching direction in their careers. 8 in 10 digital leaders reported that new life priorities among staff are making retention more challenging, and 4 in 10 said that employees are not remaining with their companies as long as they would like, as they leave for better paid positions.

However, just 38 per cent of organisations have redesigned their employer offer to make them more attractive to new recruits, such as by embracing hybrid and flexible working.

Skills shortages are most acute in cyber security with 43 per cent of digital leaders reporting a shortage, up from a third in the past year. A recent government report found that the UK’s cyber security recruitment pool has a shortfall of 10,000 people annually. Other in-demand professionals are data analysts (36 per cent) and technical architects (33 per cent).

A shortage in developers is rising fastest of all professions in the tech sector (only behind HGV drivers and nurses overall). 32 per cent of leaders surveyed noted a shortage of developers.

Two-thirds of digital leaders said they are unable to keep pace with change because of a dearth of the talent they require. Harvey Nash Group identified, for instance, that companies are focused on creating new products and services but cannot recruit enough developers to do this work.

“With businesses planning record levels of digital investment, we could be standing on the verge of a “second renaissance” for technology,” said Bev White, CEO of Harvey Nash Group. “Organisations are looking to push their digital transformations further and faster than ever before, putting technology at the very heart of how they operate. This will take them beyond being merely 'tech-centric'; technology will literally be dispersed throughout the business, everywhere.”

“But these ambitions are coming under threat from the acute skills shortages that are now worse than ever before. In fact, businesses face a triple whammy. They lack the supply of skilled resource they need; they have not yet evolved a new and effective employee proposition for the hybrid working world; and the skills they need are themselves changing as technology develops at pace.”

“Digital leaders need to rapidly assess their needs and find solutions if their plans are not to be derailed by this potent cocktail of challenges,” she concluded.

In order to bridge the tech skills gap, digital leaders in the UK aim to broaden the skillsets of their tech teams, with 54 per cent planning to cross-train people from other parts of their organisation. The number of apprenticeships offered is expected to grow as 52 per cent of digital leaders confirmed they would offer more in the year ahead. Digital leaders also plan to widen their geographical net to source new talent, as hybrid working becomes more commonplace (almost half have already done this).

Meanwhile, female talent continues to be shut out of the tech industry as the gender divide closes at a snail’s pace. Of the digital leaders surveyed, 12 per cent were female and women made up less than a quarter of tech teams. The survey found that the most successful strategies for improving gender balance are driven by culture, training, support networks, and reporting, while mandating shortlists and quotas are generally considered less helpful.

The 2021 Harvey Nash Group Digital Leadership Report was carried out in collaboration with CIOnet and contributed to by MIT’s Centre for Information Systems Research. Over 2,100 digital leaders were surveyed between July and October 2021 across 87 countries, including 823 digital leaders in the UK.

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