The UK’s tech industry is experiencing the highest skills shortages for more than a decade, with almost two thirds of CIOs (64%) reporting a shortfall of talent – which is impacting heavily on the most technology enabled cities and regions in the country.
The Harvey Nash/KPMG CIO Survey, the largest IT leadership survey in the world, reveals today (15th July 2019) that despite London (1st), Manchester (2nd) and Leeds (7th) featuring in the top ten best UK cities for digital technology in June[2], all are reporting major tech skills shortfalls.
The heat is off London but the North jumps over 20% in just two years
However, while almost two thirds of tech leaders in London (63%) are reporting shortages, this figure has remained stable over the last 12 months – as those reporting shortages in the North West (65%) and North East (63%) has continued to rise – jumping over 20% since 2017. This suggests that the pressure on finding tech skills in the capital has plateaued, but the intensity of the problem has now shifted north to cities like Manchester and Leeds.
Since 2017, when tech leaders based in London reported the highest scarcity in big data/analytics skills in the UK (42%), the capital (41% in 2019) has been overtaken by the North West (49%), which now tops the 2019 UK league table for its lack of big data/analytics specialists. Across the UK Harvey Nash estimates that a further 16,000 big data/analytics specialists are required to fill this growing skills gap.
Impact on the Northern Tech Powerhouse
top three skills shortages in the North West and North East in 2019 were:
- Big data/analytics – (49% in the North West/38% in North East)
- Developers – (37% in the North West) and Technical architecture/Enterprise architecture / IT strategy – (32% in the North East)
- AI/Cyber Security – (32% in the North West) and Automation robotics/Cyber security – (30% in the North East)
Albert Ellis, CEO of Harvey Nash, said:
“With technology developing at such a pace, supply just can’t keep up – with the most acute shortages at the top end, in advanced fields such as big data/analytics, cyber security, and AI. It is particularly worrying that Northern tech hubs like Manchester and Leeds have experienced greater rises in skills shortages than London, as these cities are often competing for talent that’s lured to the capital.”
Across the UK, the sector struggling most is transport/logistics where 76% of tech leaders said they are facing a critical skills shortage that is preventing their organisation from keeping up with the pace of change. The top band of companies, those with IT budgets of more than $250m, are also badly hit, with 74% reporting a critical shortage.
Large corporates hardest hit
The CIO Survey also found that it’s the big corporates that are feeling the pressure most. Amongst businesses over 50 years old, 68% are facing a talent problem. Larger organisations with budgets over $250m also appear to be the least able to retain their staff for the duration they would like: only 19% retain key staff within their technology teams compared to 44% of smaller businesses with budgets of under $50m.
Albert Ellis, concluded:
“On a positive front, it is encouraging to see how the digital economy is developing outside London. But at the same time factors that we may have thought unique to London – overheating skills shortages – are also spreading. At some point all of the UK economy will be a digital economy and the government will need to find ways of spreading the value generated evenly. Across the UK, businesses face a challenge in turning these tech skills shortages around.
Large corporates in particular need to find solutions fast. We are seeing quite a profound generational shift in which Millennials are most interested in innovative projects and learning new skills, more so than in salary and job security. They are looking to work for enterprises that have a clear purpose, and many of them also care deeply about working for a business with strong ethical, environmental and sustainability credentials.
“As a result, smaller, younger companies are frequently a more attractive proposition to today’s wave of IT talent.”
[2] Published by Data City on 12th June 2019 – https://www.thedatacity.com/uks-digital-technology-industry-is-25-larger-than-previously-thought/
