ICT Trends: skills shortage going from bad to worse|
by Garry Roberton, Senior Lecturer, Wintec
Globally, CIOs and recruitment agencies are seriously concerned about the impending skills shortages in the ICT sector. In New Zealand these same concerns are being echoed. Senior Wintec Lecturer Garry Roberton provides a further update on past, recent and projected ICT tertiary enrolment and job trends.
ICT skills shortages: not getting better
At the CIO/Computerworld roundtable held in July 2008, key players in the New Zealand hi-tech community declared the skills shortage as the number-one challenge facing the sector. On a scale of one to ten, Paul Matthews, chief executive of the New Zealand Computer Society, ranked the ICT skills shortage a "nine".
According to Mattthews:
"The talent shortage is a critical problem, acting as a drag on the growth of the economy".
Are things getting better, or worse? I've looked at some data and unfortunately, it will be a while before we can stop ringing the alarm bell on the skills shortage in New Zealand.
Tertiary ICT enrolments down
Last month's ICT Trends article showed that tertiary enrolments in NZ have tracked the global trends over the last decade, evidenced in the following two charts:
CRA Taulbee Survey (USA)
According to the Computing Research Association "total enrolment among majors and pre-majors in US CS departments increased 10 percent, the third straight year of increases in total enrolment, indicating that the post "dot-com crash" decline in undergraduate computing program enrolments is over."
Even if this trend in the USA continues, this year the total enrolments will still be about thirty per cent below the 2001 peak. There is also some evidence that global enrolments may already have peaked at current levels, based on demographics and improving economic indicators.
ITP/Polytechnic Enrolments (CITRENZ)
The ITP/Polytechnic sector ICT EFTS enrolments have increased 45 per cent between 2007 and 2011 based on data collected by CITRENZ. This year, the increase is an estimated ten per cent. However, this is still a quarter lower, or 1,000 fewer enrolments than in 2002.
What's underpinning the evidence suggesting that enrolments in NZ may already have peaked at current levels?
New Zealand demographics point to lower school rolls
The following chart shows projected secondary school rolls under the three sets of scenarios, low, medium and high, and compares these with the previous medium projection in 2007.
Secondary School Roll Projection Scenarios (MoE National School Role Projections)
Even with the best scenario as per the red line, there will be no significant increase in secondary school rolls before 2020. Ergo, tertiary enrolments have now peaked, in terms of domestic students, and will remain at current levels, and/or slowly decline over the next eight years.
New Zealand employment rising
Department of Labour
Employment rose strongly
- Rising wage growth, increased employment intentions, and continued growth in online job advertisements point to a gradual strengthening in the demand for labour over the past year".
- "Employment rose by 1.4 per cent, or 30,000 workers, over the March 2011, well above average market expectations of a 0.4 per cent increase."
Historical and anecdotal evidence suggests that as the economy continues to improve tertiary enrolments will be impacted negatively. Students leaving secondary school will have more employment and/or career options to choose from.
Thus, tertiary ICT enrolments may be hit with a double whammy of declining secondary school leavers and an increasingly buoyant NZ economy. Some school leavers are able to choose work over tertiary studies, an often attractive option compared to ending up with a large student loan after graduation.
Add to this a third and largely unknown factor of the impact of the strong NZ dollar on international enrolments. The NZ education market competes against other Western economies like the USA, Canada and European countries, and the rising Kiwi dollar makes us less attractive to overseas students.
ICT job ads jump
The following chart shows the 2011 trend to July for Seek and Trademe ICT job adverts. Monthly increases on Seek; Auckland experienced a 5% increase, Waikato a 14% increase while overall all NZ ICT jobs advertised on Seek rose 4%.
To give you an idea how ICT compares to other sectors, other jobs on Trademe increased just 0.6 per cent overall.
Significantly, the Seek ICT July job advert figure of 3,127 is only ten per cent below the pre-recession peak of 3,487 in September 2007 and is up almost a third on this time last year.
This suggests that companies will be struggling to fill vacancies, and will have to compete hard for job seekers.
Industry comments on the impending skills shortages in the ICT sector
It's not just New Zealand ICT businesses that are worried about skills shortages. The following are examples of recent commentary on the skills shortage in ICT from overseas.
ITCRA, the Australian Information Technology Contract and Recruitment Association, published a report in May, which contained the following; (Australia is) on the cusp of an employment skills shortage in the ICT sector. The group's inaugural Skillsmatch ICT Skills Dashboard revealed; an average of 26.3 days taken to hire a new ICT employee, an increase of six days in the past year. In the same period, the number of suitable candidates for each role has decreased from 7.7 candidates to 6.8 candidates.
- International Business Times (Accessed July 2011)
Hiring process lengthening in tighter market; good quality candidates are getting harder to source, survey finds. Potentia Recruitment managing director Josh Comrie; "The market today is one that has very much gone back to the one last seen in 2007 - it is candidate-short. In-demand skill sets include senior network design, infrastructure design and software design roles - It is the architecture roles. C# and Java developers are also in demand and the Flash Flex development toolset is also becoming very popular."
- ComputerWorld (Accessed July 2011)
Garry also produces a monthly report containing statistics and facts related to ICT enrolments and job trends which can be accessed here.
Garry Roberton is a Senior Lecturer with the School of IT at Wintec and Executive Board Member of CITRENZ.
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Contributed content is the opinion of the author only, and not necessarily the view of IITP.