ICT skills shortage still a myth

commentary The Information Technology Contract and Recruitment Association (ITCRA) should be applauded for going above and beyond the call of duty in a recent meeting with Immigration Minister Amanda Vanstone.

ITCRA officials took it upon themselves to argue -- on behalf of all foreign professionals seeking entry into Australia -- for a more flexible skills migration programme. At the discussion with other business organisations, the association tabled a whole raft of measures aimed at improving the system.

The organisation proposed a 10 percent increase in the number of foreigners permitted to practise their trade during the 2005 to 2006 period. This would bring the number of migrants to approximately 90,000 a year.

In a statement, ITCRA correctly identified the areas of shortage the nation is facing. They include nursing, medical science, accounting, finance, teaching and engineering. Failure to act would be detrimental and the economy will surely suffer the "largest skills shortage ever" over the next four years, the minister was told.

But the addition of information technology and communications (ICT) to the list was hard to digest. To its credit, ITCRA tried to justify its case to the minister but solid evidence to back up its argument was found wanting.

In fact, the Department of Employment and Workplace Relations has declared there is "no national shortage" in ICT skills. This conclusion was reached based on interviews conducted in May 2004 with 122 employers and 78 recruitment agencies nationwide.

Certain states experienced recruitment difficulties but no actual insufficiency in skills. New South Wales had difficulty in specialisations such as .NET technologies, Lotus Notes, Progress Software, SAP, PeopleSoft, Siebel, Linux and CISSP (certified information systems security professional).

ITCRA also pointed to Australia's lack of innovation in the software space to further its cause. Since very little is invented here, most ICT skills were obtained overseas first. The country, ITCRA argued, required "highly-trained skilled foreign workers to teach our ICT graduates on the major projects through skills transfer." I disagree.

Universities across the country have lamented the decline in the number of ICT undergraduates and that comes as no surprise. In 2000, around 12 percent of computer science graduates had difficulty finding full-time employment. That figure now stands at 30 percent, according to the Graduate Careers Council of Australia. Five years ago, the median starting salary for technology graduates was $37,000. Today, it has increased by a mere $1,000.

Dentistry, on the other hand, is one of the best performing professions both in terms of full-time employment and remuneration. Last year, a fresh graduate could earn an average of $60,000, an increase of $10,000 since the new millennium.

The nature of the problem for ICT is one of supply and demand. It has no connection with the quality of teaching at universities (although some tertiary institutions could use an overhaul of their computer science curriculum), and nothing to do with any skill shortages. If a continuous stream of job opportunities exist, does corporate Australia prefer to outsource overseas instead of hiring locals?

A dearth in .NET expertise, for instance, does not automatically warrant a drastic increase in the number of overseas software developers. The government is well-equipped in dealing with shortfalls in specialisations -- the introduction of the Skilled Independent Regional visa last July to fill skill shortages in regional areas.

To ensure a constant supply of highly skilled technology professionals, we have to first go back to the basics, fix the many problems in our own backyard and answer, in all honesty, the fundamental question of why ICT is not an attractive enough career.

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Talkback 16 comments

    Fran, I commenced work in the ...Anonymous -- 16/02/05

    Fran,

    I commenced work in the IT industry in 1975 and worked happily and profitably until 2001 when I, as Director of a Software R&D lab, I had to retrench my 17 staff and turn the lights off on my way out. Since then I have had only piecemeal short term contract work interspersed with long periods of unemployment. I know of many people who have left the industry or gone overseas in search of work. Every job I apply for has dozens of applicants - there is no shortage of IT staff in Australia - there is simply not the level of work required in previous years. Following the boom of Y2K and implementation of large CRM and enterprise systems costing tens of millions of dollars, companies have been questioning the return on investment made previously and have not been finding satisfactory results. Therefore IT budgets have not just been frozen - in many cases they have been drastically cut. Hence the reduction in staff requirements on a large scale. We may have skill shortages in some areas - but like myself, others have upgraded our skills to .Net , SQL Server etc. only to be told that the employer wants significant experience as well. A number of the jobs I apply for drag out for months and then evaporate for any one of a variety of strange reasons. IN these cases it would appear that the IT Department is trying to create an internal demand for some project and failing.

    The situation is critical - with the outsourcing of many low to medium level IT jobs to overseas suppliers there is further reduction in the demand here. We will become a technological third world country very soon.

    We certainly do NOT need to import any significant numbers of IT staff from overseas.

    How complicated is it ? " ...Anonymous -- 16/02/05

    How complicated is it ? "Skills shortage" is not the same as "staff shortage"! Just because we have 100 IT professionals doesnt mean they all have the skills that are up to mark. Hence "skills shortage". However there is no shortage of "IT staff".

    Of course contenders will now cry "training" etc. But that still will not cover the skills which are necessary to complete project work.

    Once again I repeat - do not confuse skill with manpower.

    mate, i think you're the one c ...Anonymous -- 17/02/05

    mate, i think you're the one confused. the argument is very simple. a specialisation like .Net might be hard to come by as the story suggests. anyone who claims there's a IT manpower shortage must be dreaming.

    Hi Fran, You're right: it's a ...Anonymous -- 17/02/05

    Hi Fran,

    You're right: it's a matter of supply and demand. If the skills are
    available in WA and the request is in NSW, what is the chance that the
    requester will offer an amount attractive enough for the person to
    make him or her decide to move interstate. Or the other way around,
    from NSW to WA ??
    As long as the there is another solution, getting the skills in cheap
    by having the migrants pay for their opportunity to come into the
    country by accepting the lower wages........
    What the people aren't talking about is that the knowledge that comes
    into the country, very likely goes out of the country just as fast.
    And all this time, the graduates won't gain any experience and
    eventually give up.

    Peter

    Hi Fran, The ICT skills shorta ...Anonymous -- 17/02/05

    Hi Fran,

    The ICT skills shortage (what there is of it) is because our universities don’t move quick enough to introduce/change subjects that are relevant to the market. How many universities teach Microsoft (content) courses? One that I know of. The rest are still coming to grips with technology that is in the process of being phased out. The problem is the academics themselves – once they get to a university they stagnate and don’t develop themselves or their curriculum.

    I am in the process of completing a university subject that focuses on HTML, JavaScript and Perl – WOW what technology.

    I have been espousing Web Services for a number of years and still find it amazing that there is little education or advancement in this (soon to be pervasive) technology. I must admit that having the University of Western Sydney (UWS) just around the corner certainly has it’s benefits. They completed part of a project for me last year and were absolutely fantastic with their openness, willingness to change and to provide some very bright students for the project.

    Now if I could only get another job without a recruiter who knows nothing about me, with technologies they know very little about and for a company they have a relationship with but don’t specify positions as they really are…

    There is NO skill shortage; wh ...Anonymous -- 17/02/05

    There is NO skill shortage; what we have is a shortage of common sense. Due to HR, and I.T. "agents" getting in the way of the work request, what starts out as a "nice to have" skill becomes a MUST HAVE. I am fed up wiuth being told I "can't" do something just because I've not done it before. Four years ago, I left Australia and went to Ireland. My 25 years experience enabled me to learn, use and teach new technologies, skills dopey Australian (English?) agents said I could not do. It's not what you know, but how you apply it. But then it's not about jobs, is it?.

    Anonymous Sydney consultant, i ...Anonymous -- 18/02/05

    Anonymous Sydney consultant, it seems pretty clear to me that people are ridiculing ITCRA's claims of skill shortages, not their claims of staff shortages, which they don't make. Maybe you should learn to read.

    ITCRA was making these claims even during the depths of the downturn, when even the government knew it was garbage.

    The interesting question is why the immigration department invites the ITCRA view on these issues without seeking counterbalancing views. ITCRA is just a pack of sales people.

    Hi Fran Its a bit difficult to ...Anonymous -- 20/02/05

    Hi Fran
    Its a bit difficult to judge ITCRA's merits/reasoning without reading their original report. We have here the 'what' without the 'why'. I have to ****ume ITCRA research suggests employers report skill shortages in these areas. [misunderstanding ?]

    It seems employers are requesting more task oriented skills rather than role oriented skills such as vendor specific technologies, methods and knowledge. So why do an undergraduate course in ICT when completing a 3/6/18 month vendor certification course gets you MCP/CCNA/A+/Net+/Linux for instance?

    I think a problem is that corporate Australia cannot continually import technologies and expect local ICT proffessional to have the same skills/experience in all regions compared to having the ability to pick and choose people from the global market.

    Although its not the governments role to determine which technologies corporates should use, they should definitely not be required to import skills because of corporate decisions ie If you want to run that technology, then factor in suitable local training/support.
    The government could provide incentives for this through training institutions.

    Overall I agree with what you say, though saying if a constant stream of job opportunities with 30% (grad) difficulties in finding full-time work implies too heavily that the jobs are either being filled over seas or being reported as a skill shortage. I expect non-grad ICT studies are becoming more popular and filling positions that were once the domain of university candidates.
    If this is true, then the big problem is not a skill shortage, but where is our research and development industry? If the trend is to move from university to non-grad studies, we wont be left with a non-skilled ICT workforce, we'll be a non-ICT developing, manufacturing or supplying country, rather ICT administrators/technicians.
    Hmmmm.. not much use with free trade agreements.
    Back to the drawing board I guess...

    I am writing from England wher ...Anonymous -- 20/02/05

    I am writing from England where the situation is similar -- there is a wide shortage of IT jobs.

    As to the skills shortage, there is in effect none, just as there is no staff shortage; when employers complain they cannot get the "perfect" combination of skills (where Oracle 8 experience counts for nothing when Oracle 9 experience is sought for), that's just talking prices down.

    What is happening is that the entire software industry is moving to countries with a much better cost base.

    Textiles, steel and ships are no longer manufactured in Manchester, Sheffield or Strathclyde. Those industries haven't just moved their low-end processes abroad, they have moved completely abroad.

    RAM and PC components are no longer manufactured in Oregon and California, using cheap immigrant workers; those industries have moved entirely first to Japan and then to Korea and Taiwan. The brand names are no longer USA based, they are now like Samsung and Acer.

    Immigration of cheap foreign guest workers would still be better for the nation than the wholesale export of the industry to their contries of origin, because at least immigrant workers would spend most of their earnings in their guest country, but it is not going to happen either in the medium-long term.

    Restricting immigration has the effect not of making available more jobs to currently unemployed IT people (because odds are that the job will then be exported, if the cheaper worker cannot be imported), but simply to keep the salaries of "tenured" currently employed workers growing.

    The economics of exporting the whole industry to where cheap workers live are rather more compelling than those of importing those workers to where the industry currently is.

    It is too bad, and makes dentists all the wealthier for it, as they are shielded from international competition, but all this is an effect of both the enormous amounts of money invested in the telecom bubble to create immense amounts of international internet bandwidth, and of a definite shift to pro-business policies by governments. Tough on us.

    I don't get involved in debati ...Anonymous -- 24/02/05

    I don't get involved in debating issues in public with our members. The ****ociation's member forums held in all capital cities at least four times each year provide adequate opportunity for members to debate and reach a common mind about the ****ociation's policies. On this issue I took the precaution of canv****ing all our members views before producing the advice that we provided to Minister Vanstone. Not all our members responded but those who did were fairly unanimous in their view of a need for an increase in the skilled migration quota. When this view was presented to the Minister in the company of representatives of about twelve other industries, the view was of a need for an increase was similarly unanimous. So this is not just ITCRA's view. I am confident it is the view of ITCRA member companies and the other industries where a skills shortage is currently being experienced.

    Apart from this, I hope I can ****ist your readers to arrive at a sound conclusion in regard to the issue of what Australia's Migration Program in 2005-2006 should be. What I actually said to Minister Vanstone on the 31 January is attached.

    I hope that they will consider it carefully. The economic proposition which underlies this advice is comprehensive, well researched and widely documented. It is none the less very simple.

    1. During the past five years, millions of Australian's have taken out mortgages at manageable interest rates. Their livelihood is dependent on those interest rates remaining close to where they currently are.

    2. The most significant economic event that would influence the Reserve Bank to increase interest rates is increased inflation.

    3. The most significant factor that would cause inflation to increase is upward wage pressure.

    4. The most significant cause of upward wage pressure is a shortage of skilled personnel.

    Therefore the central strategy that could be adopted by the Australian Government for keeping millions of Australians with mortgages in their new homes and to protect them from defaulting is to address Australia's (and much of the Western world's) shortage of skilled personnel.

    Please also note that my advice to Minister Vanstone was in respect to all skill categories in short supply in Australia not just highly skilled ICT personnel.

    Some other key pieces of information which may be of ****istance to your readers in arriving at a balanced view of this matter are:

    1. ITCRA members role is to find the best person for the job whatever their nationality or location.

    2. They would actually prefer to (and try hard to) find a local person for any position for which they have a client ****ignment due to the fact that that they can usually get a local person into place more quickly and without the h****le of a 457 Visa process.

    3. There is no financial gain for ITCRA members in sourcing a person from another country. In fact, generally the reverse the case.

    4. ITCRA members run ethically managed businesses under a Code of Conduct that requires that they meet the highest professional criteria in their relationships with their clients, candidates and each other. I have met nearly all of them and find them to be good citizens of Australia with a sound understanding of the importance of their role in the Australian economy and their local community.

    believing your own hype Danial Brogan -- 28/06/06 (in reply to #120113706)

    ITCRA and Norman are perhaps the most twisted and hypocritical dogs in the market. Norm is simply a failed recruiter who wanted to remain in the lime light. ITCRA is just an agency that has it's own agenda and represents the large agencies who are only interested in sucking the wealth from the average IT contractor while lining their own pockets! ITCRA is a representation for the agencies - not the IT PEOPLE. Norm has dinner and lunch with other fat cat businessmen where they discuss opportunities to increase wealth.

    Give it a rest Norman - we know what you're about !

    Frankly as an IT contractor looking for a new job from time to time - I know that the best contracts I should target are ones from independent agencies coz then at least I'm not making you and your twisted organsiation any more powerful...

    Norman, Why should the ITCRA b ...Anonymous -- 24/02/05

    Norman, Why should the ITCRA be focussing on keeping interest rates low? They should be representing IT professionals and not trying to do the Federal Government’s (and Reserve Bank’s) job.

    The ITCRA policy is clearly driven by the corporate greed of some of its members under the thin guise of representing the IT industry. Until such time as the organisation genuinely and objectively supports Australian IT workers most will have little time for the rubbish being peddled by it.

    Hey Norman, why don't you get ...Anonymous -- 01/03/05

    Hey Norman, why don't you get involved in debating issues in public? Who appointed you the controller of workplace issues?

    Secondly, if you're so concerned about inflationary pressures, I'm sure you'll be encouraging your members to stop gouging government departments with high mark-ups.

    Waiting for your response.

    Norman, when did ITCRA acquire ...Anonymous -- 02/03/05

    Norman, when did ITCRA acquire Reserve Bank responsibilities?

    As you well know, the responsibilities of ITCRA members are to maximise profit for their owners and shareholders, not to look after the interests of property investors. The fact that you would attempt to present such a strange argument undermines your case.

    Secondly, you still don't produce evidence or proof of skill shortages. Please show me research by professional, unbiased labour market economists.

    Third, why should property investors be protected from the market, Norman? We keep hearing that professional software engineers should not be protected, even though everyone else in the economy is protected.

    Fourth, self-regulated systems are practically useless. Tell me how many complaints ITCRA has investigated against its members, what the results were of those investigations, and who sits on the investigating panel.

    when you look at those IT Job ...Anonymous -- 04/03/05

    when you look at those IT Job Ads from job agencies, you will find a list of skills in different products & experiences which the job requires but the funny thing is how many of IT people can be competent in all those skills in 5yrs or 10 years or longer? most IT people specialise in one area for many years to get proper experience. many companies stick to only few brands of product for simplicity and easy management. If a person work for one company for several years they only get certain experience in those few products. most hardware or software are similar and it's not difficult to pick up skills in other brands of products provided you have experience in other similar products. How hard is it to find someone with both oracle skills and Cisco routers? what a joke! no wonder there are skill shortages!

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