LogicaCMG squeezed by graduate shortage

LogicaCMG squeezed by graduate shortage

Summary: Good news for IT pros looking for work, but perhaps not for clients who face higher prices to underpin wage increases at LogicaCMG

TOPICS: Networking

IT services firm LogicaCMG is struggling to hire qualified staff in the UK, forcing it to increase wages and move work overseas.

In its interim financial results, released on Wednesday, LogicaCMG admitted that it was finding it harder to hire high-calibre graduates in the current labour market.

"It's not a crisis, but it is a concern," said a LogicaCMG spokeswoman on Thursday, who explained that part of the problem is that fewer UK students are choosing to study subjects such as maths and physics at university.

"In the UK, the skills we're most in need of are onshore project management, technical architects and consulting," she explained.

This shortage appears to be good news for those who do get hired, but not necessarily for LogicaCMG's clients. The company reassured investors that it was managing to charge clients higher prices, to compensate for wage increases required to fill vacancies.

"We are able to achieve increased prices for the higher demand skill areas, allowing us to compensate for wage increases," said the company in Wednesday's financial results statement.

Faced with recruiting challenges in the UK, LogicaCMG has been hiring more subcontractors in this country and abroad. This is typically more costly than employing full-time staff, so there is pressure within LogicaCMG to drive costs down. As well as conducting its work offshore, the company also recently moved its own accounting operations to Bangalore, India.

There is growing concern that Europe may be facing a tech skills shortage in the future.

In August, the Confederation of British Industry (CBI) warned that the UK education system is failing to turn out the kind of school leavers that the technology industry requires to stay competitive with China, India and Eastern Europe.

The issue is also being examined by the European Commission, via a taskforce launched in June.

Topic: Networking

Kick off your day with ZDNet's daily email newsletter. It's the freshest tech news and opinion, served hot. Get it.


1 comment
Log in or register to join the discussion
  • How about retraining their existing staff or hire in Uk people with similar skills and train them up.

    Paying IT people decent pay would also help..... pay levels for average IT professional has been basically static .......
    it went down a few years ago....... living costs shooting up and lets not mention property prices ......Also if your have a technical/science background you basically end up mostly likely in a career sideline and little chance of reaching senior levels or board level........ but if your have a finance / generalist background you stand a good chance of reaching board level or managerial levels.

    What companies want is the right skills and cheap IT labour ......

    Its seem to be ok to thow money, big bonues, share options, big pensions etc at company
    directors but reluctance to pay people who do the real work decent pay.

    Its like the CBI whining about the lack of people taking up science - one of reasons been poor pay, status and propects ......