The IT industry is facing its toughest challenge yet. Robert Chapman paints a bleak picture of companies going bust while IT salaries soar - and all because of a lack of a skilled IT workforce. He calls for the government to provide tax breaks for training, and says that the IT industry will soon be beyond the point of no return.

"Tackling the skills crisis will not be an easy feat, but if both government and business do not start to rectify the problem now, we will soon be beyond the point of no return."

If we believe everything we read in the papers, the UK is heading for a skills crisis. Well, this time, the papers have got it absolutely right.

Skilled IT professionals in the UK are at an all-time low and the situation is facing breaking point. There is no denying that the IT industry is up against one of its biggest challenges yet, one which left alone could see many British companies disappear for good as they struggle to find qualified employees to carry out IT related jobs. The software industry has seen the brunt of the crisis so far.

Tackling the skills crisis will not be an easy feat, but if both government and business do not start to rectify the problem now, we will soon be beyond the point of no return.

According to the Office of National Statistics, the current value of software production to the UK economy is £20bn, up from £2.5bn in 2003.

If the crisis in skilled technical staff continues, we will simply not be able to sustain this level of growth year-on-year, which will directly affect the economy as a result.

The crisis

In the last five years the UK has seen a decline in skilled IT professionals. However, it’s not just the techie jobs such as software development that have suffered. Digital media, an area companies are becoming increasingly reliant on, has seen an unprecedented shortfall in employee numbers.

The situation has become so serious that those employees lucky enough to possess good IT skills can command a salary far higher than they could have dreamed of. This poses another issue as businesses struggle to find the money to pay IT staff.

In addition to this, employers are no longer satisfied just with technical skills: increasingly businesses are looking for well-rounded individuals who can combine their technical knowledge with negotiation, management and interpersonal skills.

The cause

The skills crisis did not creep up overnight, the signs have been there for a while. A recent study - by Lancaster University Management School, the 'British Computer Society and Microsoft' - found that those involved at the start of the UK software industry, three decades ago, are now moving towards retirement. With the study also highlighting a 50% drop in applicants for computer degrees over the past five years, there are just not enough graduates to take their place.

Schools are not encouraging pupils to study computer sciences at university, as they don’t fully understand what the courses involve. Also, the majority of IT related courses continue to be taken up by men. The UK has found it increasingly difficult to recruit women into IT and therefore the numbers are always going to be low. Initiatives like the Computer Club for Girls (CC4G), while a good start, have been slow to take off.

The future

In order to make up for the skills deficit, many companies are focusing on outsourcing. The Microsoft study, mentioned earlier, estimates that 200,000 basic IT jobs will be offshored by 2010. This in itself creates its own issues, as UK customers become disheartened with having to deal with staff based out of the UK. We only need to look at the perils of overseas call centres to see how outsourcing can create more problems than it helps.

The skills crisis cannot be allowed to continue in the UK and unless the government and business tackle the root cause of the problem the situation will become critical, and the UK will lose its presence as a technology innovator.

The government needs to take action and encourage companies to focus on training in order to close the skills gap. It is unrealistic to expect it to front all of the costs associated with training, an alternative would be to offer tax breaks for companies who give their staff time off to train. This would encourage staff to undertake training rather than forcing them to use their own holiday entitlement to gain qualifications, which often leads to staff resentment.

While training existing staff will solve the crisis in the short term, the government needs to look at education and start from the bottom up. IT needs to drastically overhaul its image if it’s to attract the entrepreneurs of the future.

The UK is one of the most educated countries in the world and yet when it comes to skills it is found wanting. It’s time the government took action and put the plans in place to ensure the UK never enters a skills crisis again.

Robert Chapman is the CEO and co-founder of Firebrand Training.