Evening Standard: Tech Sector Is Crying out for Skills
Tech Sector Is Crying out for Skills
Evening Standard, Jan. 26, 2016
From software engineers to CEOs, the capital's future is being put in jeopardy by skills gaps across the workforce
LONDON's tech talent pool is lagging dramatically behind other global cities. The number of software engineers in the capital at the end of the first quarter of 2015 totalled 20,879 - less than a tenth of those working in Silicon Valley and a fifth of the number in Bangalore, India.
However, the real crunch will come in the next decade when the number of global tech jobs will increase by 10.6 million.
The problem is this is a global market. So not only is the UK failing to develop enough talent, it is also going to struggle to attract it from overseas. IT staff are already being paid significantly less than in other parts of the world.
The maximum salary for software engineers in London is £64,725 compared to £90,784 in San Francisco. Firms are already struggling to fill roles, with the time taken to fill a STEM (science, technology, engineering and mathematics) role rising from 43 days in 2011 to 76 days in 2014 - and that is likely to be even longer in 2016.
Jean Martin is a talent solutions architect at CEB, which is conducting this research. She has been involved in President Obama's White House Tech-Hire initiative to get more people in the US trained up for the best tech jobs and has some solutions to the problem.
"London is not alone," she says.
"There are a number of regions that are surprised to find that they are lagging behind in the number of software engineers employed. In London, there is less activity in terms of university partnerships between the public and private sectors and this is contributing to the problem. The tech talent being produced is not always being prepared for the jobs that are available.
"However, university graduates are not the only solution to this skills gap. In the US, non-profit firms are developing STEM skills among the existing workforce, taking those with particular skills profiles - such as machinists and construction workers as well as truck drivers and agricultural workers - and training them to be coders.
"Employers and educators need to take a broader lens to the skills issue and take those with a technical aptitude on to these programmes, whatever their background.
"While there is always a need to revisit compensation - particularly as London is lagging behind - we found that there is a better way to solve the issue. Companies need to lure the best and deflect the rest by targeting very specific talent and just recruit those key individuals which may be less than 10 people globally. Broadening the talent pool also means targeting women particularly as more tech roles are now a hybrid of customer service, marketing or creativity. So rather than hiring those coming from tech programmes, firms should be looking for the best creative talents or the best in marketing, and then train these highaptitude individuals in technology. "Taking lateral skills and developing them will be vital, as London cannot simply rely on the university talent pipeline."
The more immediate threat is the lack of CEOs to head up the high-growth tech start-ups that will generate jobs and growth for the economy, according to Dermot Hill, chief executive of Intramezzo, the executive search and interim management firm.
Its A Board Fit For Purpose report, published today, has found that while the "quality and strength" of the leadership team is a top factor in the decision to invest in a company, nine in 10 are finding that "sourcing candidates with the right skills and experience for leadership positions is the biggest challenge when making senior hires".
High-growth firms in need of investment often require a new leadership team - a third of the leadership team is replaced during investment and senior talent is added post-investment by half of the venture capitalists surveyed.
"Having the right people in place to propel the business through its next phase of growth is crucial," says Hill.
Yet it is a significant challenge. Intramezzo had one client in need of a global head of talent and HR who had been looking for three years for the right candidate. After a search of 17 countries, the right person was found.
"These people are out there, but are hard to find simply through networking," says Hill. "But they can make a huge difference. One part-time CEO we sourced enabled a £60 million exit of a flat screen tech firm, while the second choice for the job founded Truphone, a £100 million global business."
As with the lack of software engineers identified by CEB, the shortage of CEOs is going to need a different approach - targeting a wider talent pool.
"Leading start-ups is no problem - there is no shortage of willing entrepreneurs in London," says Hill. "The issue is when businesses start to grow and these firms need leaders."
Unicorns - private companies valued at $1 billion or more - need a very specific skill set and there is "a shortage of the right level of talent with the right experience to be a safe pair of hands", says Hill.
"They are a bit like a fine wine," he says. "These leaders get better with age and experience, but there are not enough in the pipeline because there were simply not enough of these businesses around five or 10 years ago to develop this talent.
"So we are having to look abroad and turn to places like Silicon Valley, where leaders have a longer track record, as we need individuals who instinctively know when to do something and that can only be borne out of experience running a very large and rapidly growing tech company."
Hill says the UK needs to get better at "spotting potential with the right attitude and instincts" rather than relying solely on experience.
Republished with permission of Evening Standard Limited.