Almost 70% of businesses held back by talent shortage

Digital teams are failing to keep up with the pace of change in UK tech because of skills shortages, according to research by Nash Squared.

The talent provider’s Digital leadership report found that 68% of the digital leaders surveyed in the UK said a lack of skills is standing in their way, while 57% said they will never have enough access to enough tech staff.

Globally, these figures look much the same – 70% of digital leaders globally felt they can’t keep up with tech trends because of a lack of skilled workers and, on average, digital leaders are losing about 11% of their team every year, many because staff are looking for higher salaries.

Bev White, CEO at Nash Squared, said: “People are being given a crazy number of offers, but even more importantly, huge chunks of promises in cash and other things, such as development or promotions to stay or to join a different company.

“You’ll see and hear about stories where people have joined into a job, and in a month or two months they’ve gone because someone else offered them something even better.”

There has been an increasing element of competition between firms when it comes to technology talent, because everyone is fishing in the same pool – making it easier for candidates to demand certain perks for their skills, such as higher salaries – leaving 63% of digital leaders in the UK thinking salary demands will be “unsustainable” in the future.

White added: “It’s really hard to keep the back door closed. It’s all well and good having a great attraction strategy, but can you keep people in the business? That’s not about meeting permanent demands for more and more cash, because that’s not sustainable.

“But it’s about creating the right culture, giving people the voice to help develop their careers and what they want to develop into, and then backing that up by actually making it happen.”

There is also a lack of diversity in the UK’s tech sector, with BCS research in 2020 finding that women accounted for 17% of IT specialists in the UK, while ThoughtWorks found that there were fewer opportunities for people from under-represented groups in the UK’s tech sector to hold leadership positions.

The number of female digital leaders in the UK has increased by 3%, according to Nash Squared, which said women now make up 15% of digital leaderships positions, compared with 13% last year. The percentage of tech teams made up by women is growing slowly, with the Digital leadership report finding this number to be 23% – and 27% of new hires over the past two years have been women.

Nash Squared said increased remote working is a contributor to this rise in women in tech, with many firms saying that remote work has allowed them to hire talent from other countries, too.

Global figures from the Digital leadership report suggest that men are more likely to have hired an equal number of male and female candidates over the last year – 16% of male digital leaders globally said at least 50% of the people they had hired had been women, as opposed to 14% of female leaders.

Almost 20% of digital leaders globally also said they had no representation of ethnic minorities in their teams, with ethnic minorities making up about 21% of tech teams worldwide – which may be good or bad, depending on specific countries.

The UK government has implemented many initiatives to try to increase the number if people with digital skills in the UK, as well as increase diversity in the sector, but 78% don’t think government interventions are helping to resolve the skills gap. This varies from country to country, and only 41% of digital leaders in Asia believe the same thing.

Using Ireland as an example of a region where gender diversity in tech is an ongoing focus, White said that although a “concentrated economy” like Ireland can make a “better than average” impact, “if you put in concentrated, sustained effort, you can get the results”.

Many in the UK are worried about spending during the economic crisis, but during the pandemic, technology proved its importance, and more than half of digital leaders think their budgets will rise this year. Some 55% also said they expect to increase the number of people on their tech teams in the next year.

Among the tech subjects most in focus are cyber and data. Almost 45% of digital leaders surveyed in the UK have experienced a major cyber attack over the past two years – so it is no surprise that the search for cyber talent is intensifying.

As companies’ use of data increases – 67% of digital leaders said big data analytics will be in the top two technologies to invest in over the next year – so does the need for data skills, but 42% of digital leaders are struggling to find people with data and analytics skills in the UK.

Where possible, there are plans to replace certain workers with automation over the coming years, with 40% of digital leaders globally saying they are already using, or are planning to use, “digital labour” as part of their IT remit, and 7% saying they plan to automate at least half of their workforce over the next five years.