94% of Brit tech bosses just can't get the staff these days, claims bank No matter how optimistic British tech supremos may be, they're still battling to hire and keep skilled hands, according to a new study. This is a headline finding from the latest Innovation Economy Report by the Silicon Valley Bank (SVB). The financial institute surveyed 1,218 CEOs, CFOs and other executives around the world …
While pay is half the battle, and holding on to genuine talent is going to be a problem because of it, there is also a genuine skills shortage in IT. I regularly interview for consultant and senior consultant (sometimes known as solution architects) and the vast majority of people who think they are at this level really, really aren't. This then causes a problem, because these people are willing to accept lower pay to get a job, causing the value of genuine talent to go down as well. Unfortunately if you want someone who is actually really good at this sort of stuff, then the price isn't £50-£60k as most jobs outside London are advertised at, it's more like £120-150k and standards need to go up.
Eh £120K - £150K per annum for an IT consultant? Given that there are probably only 160 - 180 billable days possible from that person you'd have to charge out at £1500 quid a day to make it worthwhile to cover sales, marketing, pensions, cars, bonuses. Unless the person has sales skills and is going to keep a load of other people busy, or sell a shed load of your software, you are joking (or work for Accenture), those day rates are long gone.
I think charge out rates have to go up before standards have to go up if you want to be paid £150K.
As a freelancer maybe but the article was about tech bosses and staff.
52 weeks * 5 days per week is only 260 possible days.
I think staff may want 25 days holidays + 8 public holidays. That brings it down to a theoretical 227 days. Add in 5 days for sick/doctors/dentists 10 for training or general in the office days you are down to 212.
So let's assume your employer has awesome sales and can bill you 100% of the 212, no bench time whatsoever, at £1000 per day. So your employer makes £212K gross profit max.
You are then paid basic salary + pension no other perks;
£150K salary
£20K employers NI
£9K employer pension contribution
You cost £179K to your employer. so a total max gross profit of £33K. Leaving £33K to pay the sales and marketing to keep you busy, the finance team to invoice and collect the money and keep the revenue and VAT people happy, the IT people to keep you functioning, the lawyers to write the contracts, the accountants to do the audit etc. etc. Then any money left over will incur corp tax @ roughly 20%.
It doesn't work, do the math.
"It doesn't work, do the math."
If time were the only value a consultant adds then yes, you'd be right. The value I add though is all of the engineer days, hardware sales, software licensing, project management days, and customer loyalty as well as the billable days when I actually work. I also produce a boat load of reusable IP which other consultants dish out with their names on.
Maths is looking pretty good where I'm sitting.
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"At which point do you stop giving them year on year pay rises? When they reach market rate?"
Those words show that you have not quite understood the situation. "Market rate" can only be applicable to employees who have "commodity" skills. However, wise organizations will treasure their experienced in-house staff, not only for their knowledge and skill, but also for their understanding of existing systems and projects, and their ability to (in the fashionable jargon) "align" IT systems with business goals. Those abilities are not available on the open market, precisely because they can only be acquired by working for a specific organization for many years.
Bottom line: good IT staff are NOT fungible.
I think it was a genuine question rather than a statement of fact, so when do you stop paying someone more?
I agree most professionals aren't fungible but they do deliver a level of value. How do you determine they are paid correctly for the value they bring to an organisation. I think you have to ask yourself is the individual proactively adding increased value to your organisation or are they just "doing their job" the same as last year. If you are doing the same job as last year, and you can't get paid more money elsewhere (market rate) why should you get a pay rise higher than inflation? Treasuring experienced staff has little to do with continual year on year pay rises as that direction just leads to bankruptcy.
If you are doing the same job as last year, and you can't get paid more money elsewhere (market rate) why should you get a pay rise higher than inflation?
The corollorary to that is that if you don't get a pay rise, you've actually taken a pay cut in real terms.
That's a really quick way to demotivate your staff.
Vic.
No. Pay is 100% of the battle. If there is a skill shortage it's because all those with the skills and experience left to for jobs that pay more and offer more respect. Like plumbing. Or grave digging. Or hooking on the streets in a furry costume.
> Pay is 100% of the battle.
Not 100%. But at least 90%.
When I was managing a team, I'd take them to the pub on Friday lunchtime if we hit our deadlines. The monetary cost was trivial by comparison to what we were paying them - but it was the pub outings that seemed to motivate them.
Vic.
"If there is a skill shortage it's because all those with the skills and experience left to for jobs that pay more and offer more respect. Like plumbing. Or grave digging. Or hooking on the streets in a furry costume".
Damn straight, and by no means new. I vividly remember, back around 1973 it must have been, hiring a minicab to take me somewhere in London. I got talking to the driver who told me that he used to have a job designing complex integrated circuits for some company (I think it may have been Mullard) but when he started a family he had to leave and take up driving a taxi "because I needed the extra money". He wasn't at all angry - just sad.
I regularly interview for consultant and senior consultant (sometimes known as solution architects) and the vast majority of people who think they are at this level really, really aren't
@AC "Consultant/senior consultant" is not the same as "solution architect". The problem you see in interviews - which you blame on candidates deluding themselves - might be caused by you confusing the roles, or advertising for one then interviewing for the other. A senior consultant and an experienced solutions architect would struggle to do each other's jobs.
I don't believe there is a skills shortage in IT, the low pay belies it. There may, however, be a shortage in the odd combinations of skills which employers sometimes ask for. Things which rarely occur together and therefore rarely in the same person. Eg MS Outlook and Perl, or Solaris 10 and Blue Coat appliances and Powershell.
Adverts for random combinations started appearing in the last recession, I guess because employers were forced to get rid of expensive staff and instead recruit folks who could do both jobs badly for a third of the price. The UK is booming but not employers' appetites to pay recession wages. Can't blame them for trying I guess.
"94% of Brit tech bosses just can't get the staff these days"
...well not at 1998 prices, anyway. Third Jobserve hit was a hopeful "tech boss" in Nottingham who will cheerily pay 21k for 18 month's experience in " Windows, MS Exchange, Active Directory, WMWare, SQL, Linux".
Just to clarify, 21k is numerically what the above candidate would have earned in 1997,or 32k after inflation adjustment. And the 2014 job isn't even permanent, so presumably no sick, no hol, no training.
@I know lets bring some people in from India.
You can have four Indian Unix people for the same price as one UK Unix guy (I work in a big UK bank), despite the retention issues in India this means you have 24 hour cover with no overtime by more people for less money, the only issue is quality of technician, at first our outsourcing was rubbish, couldn't get the people, but now, even the less experienced techies are somewhere around 80% of the skill level of the UK people (and some Indian employees are significantly better than some of the UK employees).
OK, you can argue about the ethics of making UK people redundant and employ abroad instead, but it's starting to work (more so if that particular bank is mostly owned by the UK people/government), I don't like it (being one of those UK techies) but it's not surprising that the UK underpay when you can have something 80% as good for 25% of the price.
"[using offshored unix staff] you can have something 80% as good for 25% of the price.
The above statement comes to you from the large feather bed that the banks have been lying in since 2007. In the feather bed you don't have to worry about not going bankrupt.
In a few areas it may be true that more staff with less experience might be "good enough", which is fine. But they need to be 95% as good, not 80. Drawbacks are: the language barrier, lack of expertise, high staff churn and the increasing salaries of foreign workers, especially in India.
Offshoring an area that is too critical can lead to a steady degradation in the company's core systems. Offshoring is sometimes the result of a company who is deperately looking for a buyer trying to make its books look better. The damage may later threaten the company's survival but for a while is invisible to shareholders and buyers. Company gets bought, hooray! Too late the buyer notices a smell coming from the mainframes in the basement...
"That could be because they are asking for 5 years of experience in two year old tech."
If you think there is such a thing as 2 year old tech then you're clearly not experienced enough. Everything I've seen from vendors is based on older technologies, and having experience in these means that you'll make smarter decisions with the new stuff from day one. A good example is the recent addition of in memory tables to SQL server (not new at all in the database world), or the Atlantis memory product for SQL (RAM drives effectively. clever ones, granted, but RAM drives nonetheless). Inexperienced people immediately said "awesome, that'll fix my performance problems" while experienced people said "How did you solve the data consistency and security issues?". New tech, totally different reactions based on old tech experience.
Perhaps the banks should stop using agencies that are unscrupulous to pick up contractors. If they started managing contract resource internally they would probably get a lot better quality.
A friend of mine recently was told by an agent that he was a good fit for a particular role and would put him forward for it. However, since he was asking for the going rate he wasn't put forward as the agents like to make the most money out of placing people.
When my friend received a contact from the company via a different route he dutifully raised the possibility of a conflict - which was how he found out the agent hadn't put him forward. Since he was such a high quality candidate the company in question was less than impressed and has decided to drop that particular agent from their preferred supplier list. If only this would happen more.
Of course, this is irrelevant to any discussion around permanent staff, so ymmv.
There really needs to be a word to describe the increasing incidence of "news" "stories" which aren't.
News, that is.
"We can't get the staff" is almost an annual hymn now. And it has always struck me as bollocks.
When I was a 3 years plus experienced Windows MFC developer, there was supposedly a dearth of experienced Windows MFC developers. I would tout my cv around, and it turned out the subtext was there was a dearth of cheap exerienced Windows MFC developers.
Moved into SQL and Oracle development. Apparently there was a dearth of experienced SQL and Oracle developers. Turned out it was a dearth of cheap experienced SQL and Oracle developers.
Rinse and repeat.
That's why they outsource. There are plenty of people who can, or could have given the appropriate training, do the work locally but companies don't want to spend money on that and neither do they want to pay enough to keep trained staff. Young people need to understand that anything that can be remotely can be done remotely from anywhere in the world. In many of those places, a great living can be had for 25% to 40% of what western Europeans or North Americans earn.
It really does not work like that. A previous employer of mine tried some outsourcing and the first thing he learned the hard way was that if the wages were set at a rate where he actually saved money, it was harder to find people who knew what they were doing. And on the off chance that he lucked out and got someone good they would build up their experience and bail for the next better paying job offer.
If you expect to pay 40% less than the rates here, you will get either a ridiculously high turnover, or the bottom of the barrel employees who couldn't manage to find jobs at better paying places.
Outsourcing is not a good way to save money.
There seems to be an upward trend in what the IT staff are expected to do and a downward trend in what they can expect in return.
This corker of an ad was passed to me recently, I believe my exact reaction was that they consume a receptacle of phalluses.
"The thing with that advert is, they will find someone."
I thought the same thing - 'someone' will turn up and lie their way through the interview process - struggle along for a few months before getting caught out / moving on, then the company will need to do a bit of a knee-jerk hiring session getting someone (or two) that is - OK but paying well over the odds to fix the mistakes...
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27 applications is not many. Out of those 27, there's a good chance that about 6 are outside the EU and not legally entitled to work in the UK, maybe 9 don't actually speak English to any useful degree, at least 10 don't have more than 50% of the qualifications required (probably 3 or 4 don't have *any* of them), and another 6 or so are from people who may be legally entitled to work there, but don't have the first clue how much it costs to live in London. How these sets overlap is random.
So they'll end up interviewing maybe three candidates (who have *some* of the qualifications, speak English and live within a reasonable distance), employ one of them, and have about a one in ten chance of getting a great employee (who will then demand a 100% pay rise within three years), or 90% chance of getting a marginal fit who will struggle on for as long as they can bear it before jumping ship.
That ad is the norm these seems. No "seems" about it.
I make less money when adjusted for inflation that I did 16 years ago but am required to know 10 times what had to then.
Needless to say, I'm ALWAYS looking for a better paying job.
And of course, this survey is pure bullshit.
Then these IT Biz while finding it hard to keep staff are letting people go when they get to 50 or 55 because these 'Oldies' don't fit in with their image. These very skilled people then either find it hard to get another job for the same reasons or end up going back to their previous employer as a contractor at higher rates than before.
The problem is that a lot of big companies, banks, etc. don't live or die by the sexy new technologies, it's the unsexy stuff that they rely on. Which is why I got into middleware. You don't tend to get huge numbers of people who specialise and excel in the stuff that is effectively invisible, but gets everything working together, but the ones who do are usually older.
We do desperately need younger people who can come in, learn some of our systems before the experts retire in a couple of years, and commit to 5-10 years of support. you'd think that kind of job security would be tempting to a lot of people, but it's near impossible to get people who want to do that. Also until it becomes critical my company won't do anything serious about it. They'll leave it until the last second, panic, buy something off the shelf that doesn't work as well and throw money at a third party to get it all working in some semblance of what we already had.
I've recently been working at a large multinational. The company in question was nicely profitable last year.
But they decided that pay rises were only to go to a very select few. For about the third or fourth year running.
Apparently, they're having a bit of trouble retaining staff at the moment. I can't imagine why...
Vic.
Sounds familiar...
Even worse when you have access to the HR systems - can SEE what the bonus / pay rise pots for everyone was meant to be, then watch the figures dwindle as it gets closer and closer to being announced, only for it all to vanish on announcement day - but don't worry folks, "we're more agile / profitable as a company than ever!" - followed by a self pat on the back and bonuses for upper management as a: "Well done us - we saved a fortune not giving our skilled staff a pay rise"
...
Notice period + 2 weeks later
...
"Middle Managers, why are our skilled staff leaving us?! What did YOU do wrong? We need to retain our best people!"
No matter what happens, it is never the management that seems to be cut and outsourced. UK firms have become management companies, with the "work" being doing abroad where possible.
So it's no wonder they can't get the staff, those with experience and a good working life are staying put or contracting. The youngsters never get a chance since they don't have any experience (although they don't mind sticking inexperienced contractors on the job when outsourcing).
I'm looking for a move myself, but looking at the job market I'll have to take a serious cut in pay to move.
Experience of UNIX and Linux in SMEs, Cisco Experience, Citrix, Exchange Admin, Sharepoint etc etc seem to be extensively listed. Then I look at the pay, and they're looking to pay 18k-ish unless I move to London or the South East. Even then the difference doesn't make up for the difference in living costs.
The problem is that they get people accepting these jobs because they are either desperate, or lying about their experience. I may loath my current job, but I can't afford to take a 12k pay cut.
Same thing in life sciences where there's a shortage of STEM skills and hundreds of doctorates on the dole. Many more jobs in the south east and London compared with the north but the pay is <£20k. But people really will queue up to take the jobs. I had an argument with an eastern European colleague who claimed that UK people are too decadent, and that sleeping under the lab bench and going without food in order to perform your job is fine. Sure, I'll live in a shared room, sleeping on the floor with 10 other people, and eat what I can steal from the bins, but is that the future of a civilized society? Is hoping to live on average salary and raising a family in two up two down suburbia an outrageous demand? When did we give up on aspiration?
Here's my solution:
- Pay us a reasonable wage.
- Treat us like humans. Remember we'd like to spend some time with our family.
- See us as an asset, not an expense.
- Involve us in decision making and planning and listen to our views. We don't say "No" just to annoy you. We probably have a valid reason based on experience (You know - that stuff you asked for in the job advert)
been going on for ages
Employers who complain about "skills shortages" and "no skilled staff" are usually the ones paying the least and expecting staff to do 20hrs unpaid overtime a day.. sorry a week.
But dont worry, its just the usual prelude to the CBI type bods cozying upto the government with the whisper of "If you drop the visa requirements even more, then we'll get the skilled staff we need at £7/hr and you'll get a fat directorship when you get booted out of power"..... alledgedly.
Oh and my answer to anyone bleating skills shortage is "why the f*** are you not hiring someone close enough to your job spec and training them?"
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Bright, educated, young people are leaving university every year with no skills.
Some people pick up marketable skills because they're weird enough to be interested in that stuff, that would include us guys, and the majority of IT professionals. As well as 'blue collar' types like sparks and mechanics. They generally cared about what they do from a young age and stuck with it.
Then you've got the majority of people who are not interested in anything marketable at all. They may have 'skills' in the sense that they've learned to live independently, with a credit card in hand they make brilliant consumers, but they don't actually do anything useful.
It's not their fault, business just has to recognise that this is the case, and finally admit that they can't change it simply by waving the shitty stick and saying 'well if you want to work for us YOU have to go and learn this and YOU have to go and develop and interest in that' as sooner or later their workforce will dry up as no sane person is interested in carpet manufacturing or the minutiae of their central heating repair business, and they are going to be forced to provide some genuine apprenticeships.
Have you actually tried recruiting talented people recently? It's not easy. The place I work is really struggling to find good Java developers, even at £60K+, no long hours (and lots of tea breaks) and loads of benefits. It's almost impossible to find applicants, let along anyone who's any good (or has the potential to be good, with training and mentoring).
So from where I'm sitting, it really does look like there's a skills shortage. Otherwise I think that we'd be swamped with applications.
A) Just about any business owner is going to say that hiring and retention of good employees is a challenge. Interview 100 McDonald's franchisees and you will hear that.
B). I'd be sympathetic if there were signs of rapid wage inflation in British tech circles--but there really aren't.
C) So it sounds like the real problem is the willingness of these companies to offer a quality pay packages and invest in employee training.
What I've seen are firms that rather than listing what kind of actual experience and skills the applicant should have, will just have this list of specific software products, usually a large enough and specialized enough list that the only ones with experience with all of them would be people already working there. Having used some of the specific software, and comparable software for the rest, is not acceptable. These jobs will stay open a year or more sometimes. These will be the firms claiming they just can't find staff anywhere. They seem to think they will find an applicant that will drop right in, without having to "get up to speed" or "be shown the ropes", no matter how specialized the environment is.
"C) So it sounds like the real problem is the willingness of these companies to offer a quality pay packages and invest in employee training."
I just posted, but this sums up what I was trying to get at much more succinctly; places don't seem to want to invest in employee training, and instead seem to think they can find applicants that will not need any training.
...is a bloody horrific experience in red-tape, bs and expendability....Chasing down of salaries and the general lack of respect for IT workers is appalling.
I'm not surprised we've had so many major security breaches in the past two years and this is only going to get worse folks.
I'd rather live below with my means and work special contracts and leave before I overstay my welcome, than deal with the salary chasing corporate nightmare...
I hear an awful lot about "the market" and "the market rate", but it's not at all clear what these things actually are - or even if they exist in any meaningful sense. If I go to a fruit and veg market, I can see various stalls with apples, pears, bananas, onions, cabbage, etc. etc. I can survey them, and if the stallholders are any good I can even pick up a few and check for firmness, etc. If someone is selling fresh fish, I can look to see the colour of their scales, whether the eyes are bright, and so on.
How does any of this translate to hiring IT staff? It's pretty clear that the people doing the actual hiring usually have no understanding at all of the work that needs to be done - let alone the skill and experience needed to perform it. Methods for evaluating applicants are positively palaeolithic, often involving a trip to the pub to see if they are good company, or asking a bunch of questions that an artful dodger can ace and a typical Asperger-type programming ace might struggle with. Worst of all, there is no standard, reputable way of evaluating the contribution each employee makes in the long term.
So, to my mind, anyone invoking "the market" is just blagging pure and simple.
"Worst of all, there is no standard, reputable way of evaluating the contribution each employee makes in the long term."
Only true if the employee's manager has no understanding of what is going on. This is such a common scenario that we almost take it for granted, but it doesn't have to be that way.
My first IT consultancy boss had it right - interview in the pub to determine whether candidate was good team material; take the CV on trust; be absolutely ruthless about insisting on success in trial period (that's when you realize if the CV is true); ongoing monitoring to determine who needs intervention (and of what kind) to keep them on or push them off.
I agree with John.
"Worst of all, there is no standard, reputable way of evaluating the contribution each employee makes in the long term" there is a way and it's basic business.
Easier in some roles e.g. Sales i.e. have they hit their quota, or as in the case of consultancy see the posts below wrt charge out and billable days. Trickier for development or operations although I recommend you go away and try as it will help in your pay discussions!
John, I don't think you quite see my point. Not only is there no way of assessing a particular individual's contribution to the organization in money terms, there is no way of accurately assessing the entire IT department's contribution. At one extreme, many organizations would go out of business if they had no functioning IT systems. At the other, who knows how much better they could work if their IT was more effective?
See the works of Paul Strassmann, passim. Especially "The Business Value of Computers".
I was made redundant when the UK part of the company closed but I am "too old" for IT employment forcing me to drive a taxi to get some income.
I did, for a while, hold a QA role but made the mistake of running the job induction script as a proper QA exercise against the product which was in official QA. Results - official QA clear; my exercise over 20 minor product deviations and one possibly major bug.
I was called in by personnel and told that my job was not to look for bugs. to quote "The test scripts should be run and they would log a message if there was a bug".
We parted company as I would not compromise.
Other jobs I have been for I have been told I was too good and would be bored and leave in a couple of months - try sitting in a taxi all day for real excitement!
I fulfilled every IT role in the companies I worked for from designing and implementing the company IS and global networks, past day to day IT telephone support of all employees, designed and coded the company websites and applications and even coded the company product firmware.
I am told in interviews that no one can do all that - maybe not at the same time, but it is all so simple I can't understand why everyone doesn't!
Steve B
Unless you've passed retiring age, you're NEVER too old, & probably not then either :)
Quiz list for you to answer, here, or to yourself.
Where do you live ?
Are you prepared to travel as far as 200 miles, or further for a role ?
Are you prepared to stay away for 1 week, 2 weeks, or 4 weeks as required ?
Will you accept short term, i.e. 1 month, 3 months, or 6 months long contracts ?
If the answer to those is yes, then put your CV on Jobserve, & Jobsite, and create a Linked-In profile.
Start applying for jobs, don't use the bulk apply, don't bother with cover letters.
There is plenty of stuff out there, this week I have had a dozen or so roles offered, with the stand-out one paying 380GBP per day, and on my home doorstep.
Good luck.
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