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Home > News > July 2005 > 25-Jul-2005

Research warns of looming IT skills deficit

While many firms fear an impending IT skills shortage as a result of an increase in retirement rates and a decline in the number of European students graduating from IT-related courses, the reality is more complex according to a recent report by Forrester Research.

The research report says companies will see their IT skills requirements shift away from technicians and more toward business-oriented profiles. They will continue to outsource more routine activities.

This shift in the enterprise impacts education and recruitment. In theory, the educational system should be able to rapidly create new programs to train IT/business analysts, architects, enterprise program managers, and vendor managers - skills that firms expect to need in greater numbers in the future; however, Forrester believes that, in practice, this will take too long to meet company demands.

Richard Peynot, Senior Analyst at Forrester Research, said: "Other sources of talent, such as service providers, also need staff with technical skills - and the lack of new IT graduates gives them cause for concern, too. All the evidence indicates that Europe faces a serious risk of a shortage of IT skills and Forrester believes that companies need to take action now to support long-term IT competency needs and to pay close attention to the implications of renewed competition for the best talents."

While hiring is one way that companies try to tackle the problem of higher retiree numbers, Forrester also sees a new focus on training and education. In a recent survey of IT decision-makers from leading European economies, Forrester found that they plan to significantly accelerate spending on training between 2005 and 2007.

The survey also shows that companies look to engineering schools and technology universities to provide more content in disciplines like business, management, finance, architecture, and contracts; 90% of respondents complain about missing disciplines or a lack of depth of content that the educational system delivers in these newly important IT domains.

Forrester says that while some companies may have a clear picture of their future IT skills needs in mind, few academic IT departments yet reflect this profile in their curricula; and - as Forrester found in a parallel study of European technical universities and engineering schools - academia has barely begun to transform its IT programs.

Meanwhile, many European countries can’t even generate a respectable level of enthusiasm for computer sciences among young people planning to enter higher education. The result, according to Forrester, is that European governments face an uphill task to meet the bare minimum of IT skills that industry and commerce need, let alone reach the ambitious targets of the Lisbon Agenda(1).

Forrester reports that many companies don’t renew "routine" positions in development and operations simply because they will outsource them. This trend is particularly evident in the finance and public sectors. However, outsourcing does not mean simplification. Forrester says that companies that opt for global or selective outsourcing can’t afford to move all responsibilities and decisions to service providers. Security, enterprise and technical architecture, innovative solutions, new technologies, and evolving business remain critical challenges. Forrester says the decisions should be made internally by people with high skill levels - positions that Forrester believes are not "offshorable".

Peynot commented: "These high-level positions require experience and a relevant background. The educational system may take some time to align its programs with demand — so companies should seriously evaluate the possibility of training adults either internally or through partnerships with universities."

(1) In March 2000, the EU Heads of States and Governments agreed to make the EU "the most competitive and dynamic knowledge-driven economy by 2010".

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