Skills shortages and pay rises in the IT sector

August 26, 2008

A shortage of technical graduates and off-shoring schemes for low level IT work are both to blame for skills shortages within the IT sector and rising salary expectations for mid to high level IT professionals, according to recruitment consultancies and Incomes Data Services (IDS), the HR research organisation. This situation is leading to a skills gap, where IT graduates cannot find their first position out of university because much of the entry level work is being outsourced to countries such as India or China, and therefore cannot gain the 1-3 years’ experience required for the roles that many organisations are struggling to fill. This has led to a reduction in IT graduate numbers – applicant numbers for technology degrees have fallen by 48% since 2001.

This is proving to be a big problem for technology related companies and IT departments, not only in sourcing good quality candidates, but also in retaining the mid-level staff, who have perhaps gained a couple of years experience with the company, and are now being enticed away by higher salaries elsewhere because their skills are so much in need. I have experienced difficulties in recruiting staff in this area with more than one year’s experience, yet I don’t have the same difficulties in recruiting new graduates. This isn’t too much of a problem as long as the company is able to provide the appropriate training and support to these staff, who may have never had a job before. All of the new graduates come with the necessary technical skills, but may need close supervision or strong direction in terms of company policy, client management or commercial awareness. Further down the line, it is necessary to be on the ball in terms of retention of these individuals that the company has put a lot of time, effort and money into, as there are so many positions out there and not enough people to fill them. I am constantly plagued by recruitment agencies that find out the names of key staff in my organisation, call them under the guise of a client, and then offer them interviews for jobs with sky high salaries that we cannot compete with. Fortunately most of the time the staff let me know when this happens so that I can contact the agency to complain, but I have lost some staff because of this problem. Understanding the needs and desires of existing staff to retain them is a continual effort, covering all aspects of the employment experience including salary and benefits, career progression, learning and development and general happiness/interest in the role. Here’s some more ideas on how to manage staff retention.

With the continuing decline in IT graduates and increasing pay requirements, companies need to be quite innovative in their approach to recruitment and retention in this area. If you have any advice or experience to share regarding this issue then please leave a comment.

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Posted by hrgirl | Filed Under Recruitment and Retention, Reward/Benefits 

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