Apprenticeships – a cornerstone for the future of IT?

by Heat Recruitment

by Jeff Alcock

The IT industry needs a little help, when it comes to the supply of talent. While the demand for services and products is rising dramatically in line with the shift towards a digital society, the number of specialists required to fuel this growth has, evidently, not materialised.

Failures of digitalisation projects in business have been estimated to cost up to £500,000 – a figure widely attributed to the lack of available talent. Research has shown that up to 84% of companies have failed in some way at implementing digital transformation – the NHS’ attempts to switch from paper to digital is a key example of this.

Despite billions being invested in upgrading the service and an initial estimate for completion by 2020, the NHS project has now been delayed by a minimum of seven years. In addition, figures now show a reduction in the number of unemployed within the UK – down by 52,000 on the previous figure, and the lowest level since 1975. With fewer workers available, and a lack of skilled talent in the IT industry currently, where can this desperately needed boost come from?

The question then becomes one of resourcing. Where can the right talent be found to fill these positions? The education sector currently is not adequately training their students to prosper in the world of business – apprenticeships, therefore, may offer a more tenable solution… naturally, featuring some amendments.

Indeed, data has shown that available vacancies in the IT sector have jumped by nearly 22 per cent this year. Conversely, the average salary has risen… permanent roles are up by 4.2%, and day rates have risen by 6% to £458 per day. The biggest rise in demand we have seen, however, is for ‘junior developer’ roles, with a 4.5% average bump. It is clear then, that amongst significant demand for IT staff, associated salaries are rising in tandem – with a strong need seen in entry level positions.

Degree apprenticeships, for example, are becoming more popular. With tuition fees now at an all-time high, many who would have first looked to a university-led education are now turning their focus elsewhere.

This form of training still takes the shape of a university based education, yet with far greater input from businesses as to what skills are required in the real world. The IT industry desperately requires an influx of new, skilled staff. Moving back towards a model where businesses take direct action to develop the next intake of talent can no longer be a philosophical debate, but must become a necessity to ensure the future of the industry.

The issue, therefore, sits with government. The number of people beginning apprenticeships has dropped significantly in the first three months following the introduction of the apprenticeship levy – decreasing by 43,600. The levy, in short, was aimed to develop 3m new apprenticeships by 2020. In practice, this means hits large employers, one of the largest employers of apprentices, with an “annual pay bill” of £3m or more. This figure is defined by the UK government as “all payments to employees that are subject to employer Class 1 secondary National Insurance contributions (NICs) such as wages, bonuses and commissions.”

While the intent behind the levy is clear, what is also apparent is its lack of progress – instead of funding the future careers of 3 million apprentices, it has made employers themselves less likely to bring this new talent pool on board. To solve the skills shortage in IT going forward, apprenticeships will be a key tool. With current regulation reducing this talent pool, however, more must change before apprentices can be taken on in numbers great enough to meet the current industry demand for talent.

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