Fears of software skills shortage in Germany and the Netherlands

A shortage of IT professionals in Germany and the Netherlands is worrying enterprises, industry associations and government institutions in the two countries.

Germany has more than 43,000 vacancies for IT specialists, while there are 15,000 listed IT job openings in the Netherlands.

“Every unfilled vacancy means a loss of value creation and innovation in Germany,” said Thorsten Dirks, president of German digital association Bitkom.

Research from Bitkom shows that almost 60% of the German companies surveyed are short of IT specialists, and demand is greatest for software developers.

Almost 64% of the IT companies surveyed have vacancies for software developers, and 27% of end-user companies are looking for similarly-skilled staff. Firms are particularly in need of expertise in cloud computing (48%), big data (45%) and app programming (33%). Software language skills in demand are .NET, Java and PHP.

Compared with two years ago, three times as many end-user companies in Germany are seeking staff with software development skills. “Companies in traditional sectors are becoming digital companies,” said Dirks. “They no longer only buy IT solutions to digitise certain business processes.

“Because these companies’ business models are changing, digitisation reaches the production [process] and even the product itself.”

A similar trend is seen in the Netherlands, where the top five job titles posted on Indeed are in IT development. “We are seeing high demand for software developers at small and medium businesses in the Netherlands,” said Ivo Poulissen, policy adviser, education and labour market, at Dutch industry association Nederland ICT.

“The whole economy is becoming more and more digital, which means technology is becoming an integral part of companies’ business model. Businesses are becoming software companies.”

Poulissen gives the example of the Netherlands’ BinckBank, an online broker that offers its customers access to all major financial markets worldwide. “Its product is totally based on software,” he said. “Technology is at the heart of the company.”

Research firm Forrester expects software spending in the Netherlands to grow by 4%, with the financial service industry driving investments in tech. More than half of the Netherlands’ national income is from the services sector, particularly financial services.

“The Dutch have not stopped financial innovation since they invented the stock market,” said Forrester analyst Andrew Bartels. “For example, the Dutch financial services company ING will invest €200m to expand its digital banking platform.”

In Germany, tech spending is forecast to grow by 5%. This rise is fuelled by ‘Industry 4.0’, which refers to technologies and processes related to the internet of things, analytics and cloud technologies, applied in a smart manufacturing context.

As in other European countries, Germany’s business technology agenda is driving growth in software and tech consulting. Industry 4.0 has emerged thanks to the country’s legacy of heavy manufacturing, and it is currently attracting huge attention from both small and large businesses.

Although the projects currently under way are small, Forrester expects more and more companies to drive investment to this area. For example, the German government is spending almost $500m to develop Industry 4.0 technology.

Despite the strong demand for IT professionals, there is a discrepancy between the kind of skills and experience that employers are seeking and what job-hunters’ CVs have to offer. In Germany, 6% of the job postings are tech- or IT-related, but only 1.8% of searches are for tech or IT roles, says Indeed. Of all EU countries, the gap between employer demand and jobseeker interest has widened the most in Germany.

By contrast, the gap between employer demand and jobseeker interest has narrowed the most in the Netherlands. But the gap between demand and supply is a big problem, said Poulissen. Some 4% of job postings on Indeed are for tech or IT, while only 1.6% of searches are for such positions.

Demand for software developers in the Netherlands will increase as companies are expected to spend more on software, said Forrester. “Software is eating the world,” said Poulissen. “But it’s hard to say what skills will be asked for in the next couple of years. Innovations create a new kind of demand.”

To fill the skills gap, companies are doing two things, said Poulissen. Bigger organisations are outsourcing their software development, while smaller ones are keeping software development in-house and are training professionals who are new to software development.

Industry association Nederland ICT is working with schools and government to raise interest in IT as a career. “Companies can provide guest lessons at schools,” says Poulissen. “And schools’ IT studies and companies are working together to make sure the right skills are being taught.”

The Dutch government is giving attention to the subject, and there are plans to add computational thinking to all student curriculums in the country. “It is one of the basic skills of an IT job,” Poulissen added.

In Germany, Bitkom is considering training foreign refugees to help fill the skills gap. “Many refugees are young, well-trained and motivated,” said Dirks. “They want to be here, work and use their new chance actively. We should use this opportunity as well.”