IT skills shortage choking SA business

The South African IT industry doesn't have a skills issue or a skills problem: it has a full-blown skills crisis. If it doesn't do something about it quickly, the entire industry will suffer a slow and agonising decline. And that's the optimistic scenario.

Millions of people wanting jobs. Thousands of jobs wanting people. It sounds like a match made in heaven. It isn't. The bleak reality of the South African IT industry - and most business sectors in this country, for that matter - is a rapidly dwindling skills pool, where it's dog-eat-dog in the war for skilled people.

Listen to top IT and business leaders, and the tune is depressingly familiar: the shortage of IT skills is having an increasingly negative impact on business, with many companies being forced to delay introducing new products and services because of problems filling vacancies.

It's turning into a war for talent that will see the industry eat itself.

Johan van Jaarsveld, MD, EOH Interim Talent

Neil Harper, human resources director of group IT at Standard Bank, says the current IT skills crisis in SA is growing by the day as businesses scrabble to meet their increasing demands with a shrinking labour pool.

"The jobs are there and they are high-paying jobs, but we are just not seeing the pipeline of people coming through the system," says Harper.

"This is going to force businesses to look beyond our borders for IT skills - and I think that's a big problem for the economy, the industry and the country as a whole."

How can a country with millions of unemployed people suffer from skills and talent shortages? It sounds bizarre. But scratch the surface and the reasons are right there. For a start, the number of people with the right skills is negligible. Far too few young South Africans go on to higher education, let alone with maths and science.

What's more, in a world where IT skills are the backbone of practically every business, growth is outpacing supply. Tech-intensive companies like Standard Bank have almost doubled their IT headcount in the past few years, and are still being forced to outsource lower-level jobs to allow current staff to meet burgeoning business requirements. The fact that the world is our oyster plays a real role in the skills shortage.

According to last year's ITWeb skills survey, the dearth of skills is not just a South African problem. The talent market today is a global one and thousands of skilled South African IT professionals are heading for foreign pastures, their eyes glazed by the lure of the dollar, the pound and the euro.

But if the industry has the capacity and desire to recruit and grow its skills base, what's the problem? Why does such a large shortfall exist? What can, and should, be done to alleviate the problem?

We've got a classic skills mismatch on our hands.

Moira da Roche, president, Computer Society of SA

A recent roundtable discussion at ITWeb's offices hinted at some answers - and suggests the industry should take a long, hard look at itself and its commitment to genuine skills development in this country.

It is estimated that SA only created 6 000 jobs during the first quarter of 2006. It needed 30 000. According to technology research firm IDC, unless something is done rapidly, SA will be unable to fill 113 900 jobs requiring IT networking skills by 2009 because of a shortage of trained people.

The situation is even more extreme in other specific technology areas. For example, the shortfall between supply and demand in advanced networking technology skills (Internet protocol (IP) telephony, security and wireless) will be 30% in 2009. This sector's shortfall alone represents 69 700 people.

Other areas badly lagging behind in the skills race are C#, .Net, Java and project management, says Susan Rousseau of Insource.ICT. Basic desktop people are available, but the challenge remains to bridge the yawning divide between juniors and seniors.

"The economy has grown so fast that the demand for experienced skills has outstripped the supply," says Johan van Jaarsveld of EOH Interim Talent.

"This has seen a situation arise where people become mercenary: they change jobs for an extra R100 per hour. We are seeing huge premiums being paid to lure scarce skills and it's turning into a war for talent that will see the industry eat itself."

Why should government provide a high level of support if business doesn't show some willingness to address skills development from within its own ranks?

Sandra Burmeister, CEO, Landelahni Recruitment

What's more, says Greg Vercellotti, a director at Dariel Solutions, the poaching wars are slowly killing the industry as a whole: as salaries go up, so companies put their rates up. And as rates climb, clients cut back on projects. So, instead of there being 10 projects in the marketplace, suddenly there are only eight. And then some companies take their projects offshore to Ireland or India - and the whole market loses out.

In response, SA's 30-something ICT academies are producing just over 3 000 technicians a year - the proverbial drop of water in the bucket. There's a steady decline in students graduating with IT-related skills, and the problem is only getting worse as universities across the country are seeing fewer students registering for IT-related studies.

The demand for skills has reached the point where companies are luring graduates away from tertiary institutions before they get to post-graduate levels, which means that no higher-calibre people are coming into the system.

There are just not enough people coming through. There are young people out there who are desperate to get into the IT world, but don't have computers at school.

Greg Vercellotti, director, Dariel Solutions

Lungile Mdletshe of the Business Systems Group, which relies heavily on universities for its talent needs, says this is a clear trend as more companies compete for fewer people.

On the other hand, research conducted for the Joint Initiative on Priority Skills Acquisition by the Development Policy Research Unit at the University of Cape Town, showed there are approximately 200 000 unemployed graduates in SA with a mix of certificates, diplomas and degrees. Unemployment among black graduates rose faster than any other category of the unemployed, showing an increase from 6.6% to 9.7% between 1995 and 2005.

"We've got a classic skills mismatch on our hands," says Moira da Roche, president of the Computer Society of SA. "We're simply not meeting the need in terms of the people we are developing."

Practically every company in the industry will tell you that they have learnership programmes. They will claim to be investing heavily in education and training. The numbers just aren't adding up, though. It's all very well and laudable to have a training programme that produces 12 or 20 or even 40 graduates a year, but in many cases, that doesn't even cover the organisation's own needs, let alone contribute to a greater body of skills.

What's more, there's a disturbing trend in some sectors of the industry to throw its hands in the air and blame government for everything, from the high crime rate that drives people away, to the lack of coherent skills development strategies. It is an approach that deeply irks people like Sandra Burmeister, CEO of Landelahni Recruitment Group, who wants industry to take some responsibility.

"Why should government provide a high level of support if business doesn't show some willingness to address skills development from within its own ranks? This is, after all, not only government's problem. We all have a stake in it," she says. "And besides, when it comes to the empowerment of women, both the public and private sectors are failing miserably."

The bottom line is that the private sector, government and the country's educational institutions all have a role to play in building the pipeline of IT skills. But it's ultimately up to the IT industry to stand together to drive this increase in the size of the skills pool - and it has to do so in the face of increasing competition from other industries, says Basetsana Magano, human resources director at Hewlett-Packard.

"The problem is that there is no integration," she says. "Everyone is trying to go it alone, when we as an industry could be getting far more done if we were putting our heads together. We've got to determine together what the relevant skill sets are that industry needs and how to train them. Otherwise, we'll still be sitting here in five years' time having the same conversation."

Fact is, government - as the biggest IT employer in the country, with the biggest budget and the biggest need for skills - is well aware of the problem. Right now, though, says Magano, government doesn't have the capacity to spend the money budgeted on skills development, and the private sector is perfectly placed to help the government spend that money correctly.

One bold solution being put forward is for big business in SA to create a vast centre of excellence to train teachers and engineers.

Nakatomi's Ahmed Kassam, a former government relations specialist at Microsoft, says this kind of private sector-driven initiative can churn out up to 100 000 students a year - and can tap into funds like the ₤80 billion set aside by the UK government for education in developing countries.

"We have so many skills in SA that are not being utilised," says Kassam. "We have many different academies, but tertiary institutions are battling to provide enough skills. We have 60 million children in Africa who don't have formal education. If you don't address those issues, you will never get a pipeline to get enough skills to meet the demand."

However, an industry institute like this will only work if the fundamentals are right, says Derek Hughes, executive chairman of DVT.

"This institute can only be fed by what is leaving the schooling system. Right now, many graduates don't even have basic arithmetic skills due to poor maths and science training. And the IT industry is simply not in a position to fix primary school education, which is the root of the problem."

This leads to a problem that Dariel Solutions' Vercellotti calls "a lack of putty".

"There are just not enough people coming through. There are young people out there who are desperate to get into the IT world, but don't have computers at school. This is where the divide starts. How do we address this bulk of people early on? We have to give them the opportunities to move on."

Another huge problem is that the IT industry is no longer the glamorous career choice it once was. Even with SA's vast education imbalances, there are still hundreds of schools producing tens of thousands of matriculants with maths and science - but they are no longer going into IT.

"We're not only competing with other companies for skills; we are competing with other industries," says Dimension Data HR director Linda Fine.

"Today's matriculants are moving into engineering and medicine. They don't understand what IT is all about or what it means to be a networking specialist or a software developer."

One answer, says Standard Bank's Harper, is to make IT sexy again: to make school learners and prospective students aware of the "bright possibilities" of careers in IT, and encourage them to take the right subjects at school level - most notably maths and science - to allow them to take advantage of these.

"By the time they get to university level, most of our students are maths and science-phobic," says Harper.

"We need to make sure we have pupils taking these subjects to be able to further their own careers in IT. What's more, we have to find ways of ensuring that pupils, students and parents are given high quality information to enable them to make informed career choices."

The CSSA's Da Roche says the broader issue of computer education in schools needs attention. In spite of the numerous corporate social investment projects to put computers in schools across the country, she says fewer children are being taught computer skills at schools, to the extent that the annual Computer Olympiad is battling to fill its boots.

EOH's Van Jaarsveld also believes it is important to understand the new generation of jobseekers better.

"The face of employment has changed radically in the past few years. Today's kids don't want to wear a suit; they want to wear a ponytail. They don't necessarily want to work for a company. We need to understand that we can develop and train these young people and use them in the industry."

That's all very well, but it's a little long-term to be of any use to an industry that is slowly suffocating. While longer-term strategies are vital to the well-being of the industry and the country as a whole, right now the IT industry should be casting its net wider. And if Nakatomi's Kassam has his way, the net would be cast first across the continent.

"We should be using African skills," says Kassam. "There is a huge skills base in Africa. Some of the biggest IT players in the country are using highly skilled people from countries like Mali, Tanzania and the DRC. They are right under our noses, as it were."

But dipping into the global talent pool is sometimes an onerous process. Work permits are hard to come by, and relocating people and their families can be a costly and time-consuming process.

The other alternative is taking in learners and providing mentorship programmes, but this takes time and money as well. As DiData's Fine points out, few IT professionals can afford to spend 20% of their day training a learner, especially not in a smaller company where every person's input is critical.

If the investment in people drives margins up, the business becomes unprofitable and the jobs of everyone in the company are at risk.

Sydney Ramutla, regional chief executive, Business Connexion

There's no doubt that the necessity of investing in people development adds costs to a business. And there are also risks like losing those people to greedy competitors bearing gifts and large pay packages, says Sydney Ramutla, regional chief executive at Business Connexion.

"Profitability is critical. If the investment in people drives margins up, the business becomes unprofitable, and the jobs of everyone in the company are at risk. So, investing in people, while absolutely critical, also has to be balanced against the realities of doing business," says Ramutla. "It remains a fine balance between people development and business performance."

DVT's Hughes is an unashamed private sector fan. His solution to the industry's immediate problem sounds disarmingly simple: scrap the current skills development levy and put training back in the hands of the private sector in exchange for tax breaks. Make it easy for companies to bring in 10% to 15% of their workforce from outside the country by providing five-year visas and offering relief on BEE targets.

As The Economist's Adrian Wooldridge wrote in a series on 'The Battle for Brainpower' in October 2006, the success of advanced economies is increasingly dependent not on their physical capital, but on their capacity to mobilise their citizens' brainpower. The talent wars may be a source of trepidation for companies and countries, but they should also be a cause for celebration. We wait with bated breath for the local IT industry to grab the opportunity.