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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