Short-term thinking led Australia into an IT skills shortage

Short-term thinking led Australia into an IT skills shortage

Summary: Job advertisements looking for candidates with a decade's worth of experience is leading to a skills crisis of our own making.


It's a cliche, but the only way to break into app development these days is to have over 10 years of experience developing for iOS.

While it's clearly an exaggeration, there is a grain of truth to it, and the ICT workforce study (PDF) released yesterday by the Australian Workforce and Productivity Agency provides some pointers to the appearance of a skills shortage in the Australian IT industry.

Trying to determine whether we are suffering from a skills shortage is a little like trying to determine whether light is a wave or a particle, in that people see what they want to see.

Take the differing views of two bank CIOs from last year. Westpac CIO Clive Whincup told ZDNet that organisations are being forced offshore by the skills shortage, whereas CommBank CIO Michael Harte called such statements "nonsense", and called the whole idea of a "skills shortage" a myth.

But rather than dissecting these issues with the use of "feelings" and other forms of divination, let's turn to the ICT workforce study and assess some facts.

The study says that unemployment in IT is lower than the national average, with a peak in unemployment occurring in 2009, coinciding with the heights of the global financial crisis, and that demand for IT skills is projected to rise over the next five years.

This makes it appear that there is a shortage of people looking to enter the IT workforce, but everything is not as it seems.

"In 2011, 51 percent of all ICT graduates aged 20 to 29 years were not employed in ICT professional occupations," the report says.

If that sounds bad as an overall statistic, it gets worse for students engaged in computer science or software engineering degrees.

"Only 18 percent of students with a bachelor degree or higher qualification in information technology gain employment as software and applications programmers, which is the largest of the 18 primary ICT occupations."

What is occurring is that IT graduates are finding employment, but not fields directly relevant to their education.

"The percentage of information technology graduates in jobs shortly after their course completion, where their qualifications are not directly relevant, increased from 58.7 percent in 2009 to 70.2 percent in 2012.

"74.7 percent of computer science graduates and 79.5 percent of electronic and computer engineering graduates secure full-time employment upon completion of their courses, although not all of them may have secured jobs in ICT occupations.

"While this is not an indication that they are in unrewarding jobs, it does signal an outflow of skills at a time when the demand for ICT skills is on the rise."

If the report's projections are correct, and the demand for IT professionals is set to grow by 9.5 percent, or by 21,400 workers, by 2017, can we really be affording to lose 70 percent of our graduates?

The current mindset of business would suggest that, at least for the short term, we can. With the solution coming in the form of 457 visas.

"The number of primary subclass 457 visa applications granted in the computer professionals grouping in 2011 —12 was more than twice the number of higher education completions in the field of information technology for 2011."

In that year, the number of completions was over 12,000, with international students making up two thirds of the graduates.

For the 2011-12 financial year, 457 visa holders made up around 4.2 percent of the total number of IT professionals in the workforce, and 1.5 percent of IT managers. Numbers from the Australian Computer Society put 457 holders as making up 5.2 percent of software and application programmers, and 4 percent of IT business and systems analysts.

The recent changes to the law requiring a local advertisement of a position prior to looking for 457 workers is unlikely to stem the tide.

"Data from DEEWR's Survey of Employers Who Have Recently Advertised indicates about 10 percent of applicants in three ICT occupations — ICT business analyst, systems analyst, and analyst programmer — were suitable for the positions advertised, and for developer programmer and software engineer positions only 5 percent of applicants were suitable," says the report.

"One of the reasons for the mismatch between employer requirements and applicants is that the positions require between two and 10 years previous experience, which new entrants cannot meet."

And here, we have the core of the problem that leads to the "skills shortage".

There is clearly a multitude of fresh talent pouring out of tertiary education institutions, but few are willing to invest the time and resources necessary to fill the gap between fresh-faced recruit and able team member. Companies are looking for talent that can hit the ground running, and contribute immediately.

"Employers increasingly demand so-called 'T-shaped' professionals with both broad knowledge and deep expertise, including technical skills, domain knowledge, and soft skills, which include communication and business skills. Employer demand for experienced workers means that there are fewer entry-level positions available for new graduates."

Graduates looking for a start are getting smashed from two directions, as some existing workers are stepping down the career ladder to find work.

"For example, in Queensland, as a result of some government departments reducing contractor hours, many ICT technicians are having difficulty finding positions at their current skill levels, and are consequently taking on lower-skilled roles."

Add into that equation the high turnover and prevalence of contract labour, and it's easy to see why IT could be regarded as a hard industry to successfully break into.

To help ease the burden on graduates, the report recommends "a more strategic approach to work-integrated learning and the consideration of an apprenticeship/traineeship model for ICT skills". The report notes that graduates who complete an apprenticeship are 1.5 times more likely to find work.

Until that model takes off, though, businesses are left seeing what they want to see.

If you are disposed to wanting a department of mid to senior developers, then you'll believe that you are beset on all sides by a skills shortage. Whereas companies that are willing to take a chance on a set of junior programmers are likely to see a plethora of suitable candidates beating down their door.

The "we are not a nursery" mindset that permeates the industry is slowly eating the industry from the inside, hence the reliance on temporary 457 workers.

In this environment, a little bit of investment has the chance to go a long way.

This is why I am more tempted to side with the Harte viewpoint, and deny the existence of a skills shortage. In fact, if there is a shortage of anything, it is of companies that are willing to invest in workers who are not quite up to scratch compared to the often outrageous conditions listed in job advertisements.

On the positive side, for those people who are able to get a start in the IT field, the news is not all bad .

"Graduates who are successful in finding employment, however, find the experience rewarding and career enhancing," according to the report.

It's a shame that more people are not able to get the precious foot in the door to begin their career.

Topics: IT Employment, Australia


Chris started his journalistic adventure in 2006 as the Editor of Builder AU after originally joining CBS as a programmer. After a Canadian sojourn, he returned in 2011 as the Editor of TechRepublic Australia, and is now the Australian Editor of ZDNet.

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  • Shortages ??? Your kidding right

    I've been in the I.T industry for 18 years and can safely say that this is the worst I have seen the industry with many of my peers stating the same, and H/W vendors claiming that for the financial year past was the worst in terms of meeting there targets. Outsourcing and 457 visa's have destroyed I.T in Australia. This has been a slow death since the early 2000's. Don't beleive the spin of the large enterprises that continually push outsourcing. I am living it first hand, with many of my colleague with 10+ years experience out of work since December and others about to have their roles sent to Bangalore.

    There is a standard tactic that many of there companies use and it's quite well known. Advertise roles for half the market rate, where no local resident with a mortgage and bills could live off. After 4 weeks of no applications then apply to the Govt to bring in workers on 457 visa's - put them in a 2 bedroom appartment in Coburg and pay them half the daily rate of an Australian worker. Been happening for years now with a a large IT company being the main culprit - Hence the nickname given to it which includes the words Indian B M.

    To further make the case that this is belony, The average wage of a sysadmin has indeed gone down since the late 90's. Why ? because the amount of sysadmins looking for work has increased 10 fold since then b/c of outsourcing, surely if there was a shortage then wages would have risen ?

    Ask the many I.T professionals out of work if there is an I.T Skills shortage. Don't pi$$ down the back of an out of work IT worker and tell them there is a skill shortage.
  • I keep hearing about the Aussie IT shortage on ZDnet

    yet everyone I know in IT says the market is way over saturated. what's the deal ZDnet?
  • Shortages, YES, but....

    Ahh, the nineties rhetoric did it job with many IT personal dumped in the workforce with varying attitudes and skills. Then the wages explosion dumped them into the recycle bin. It goes to show you that in our western economies wages it the best driver not rhetoric.

    The government did their job of encouraging the uptake of IT and the education pumped them out as fast as they could, now it is time for businesses to hold their end of the bargain.
  • Lies

    There is no skills shortage.
    There is however a shortage of people willing to work for well below market rates.
  • IT Skills Shortages? Yes and No...

    In general, there is no IT skills shortages in Australia with loads of people out of work and have been looking for jobs for 6 months or more. Roles such as programmers, that can be easily off-shored, are being off-shored.

    There is an exception though. For very niche, specialised sectors of IT there is a skills shortage. For example, ERP.
  • Not that I can see

    From where I sit, there cannot be a shortage of IT pros.

    Our son is 45; he worked full-time in IT for over 25 years; he is experienced in programming, systems analysis, business analysis, and software testing here in Australia and overseas; he has been desperately trying to get a job for almost 2 years and seldom even has his CV acknowledged when he applies.

    He was working for one of Australia's very biggest companies. They outsourced what they could (with occasionally devastating effects on the company's operations) and filled the place with 457s. He was 'retrenched' the day he came back from annual leave and just before he became eligible for long service leave. As they escorted him out of the building, he walked past literally hundreds of 457s doing work he knew like the back of his hand. I have had first hand experience of working with another project team, from one of the world's biggest consulting houses, staffed almost exclusively with 457s: they were so poorly trained, so bad at their job and so unproductive that they were expensive at any price. They simply could not understand what our team, almost entirely Australian trained, were doing -- mind you they were not Robinson Crusoe there: when our client was sold, the overseas buyer tried to cut my, by then 'ex-', team out of the loop and no one else in Western or Eastern Europe, the Americas or Asia could understand what we had done or how we did it. A competitor of our client offered $100 million so they could get their hands on the software.

    One other problem seems to be the behaviour of the placement agencies. They seem to automatically scan and pre-process applications, so your application cannot even get to first base if it is not formatted so it can be 'evaluated' by a program. From there it goes to a new graduate who has no hope in hell of seeing what they are looking at.
  • re-write the article

    Maybe the author of the article could re-write this article - small sample of size of 6 comments all state that there is no IT shortage - pretty obvious trend starting to occur here
  • Managers/Departments squarely to blame

    One thing that I have seen recur over the last 15+ years is this constantly increasing belief by managers, board and departments that they somehow DESERVE more for less. They are wanting people with ever increasing skills sets, who fit perfectly what they require and then expect to pay them like they are factory workers.

    IT skills have been severely devalued over the last few years and this rests squarely on the shoulders of those who make decisions for spending and hiring. They will happily fork out hundreds of thousands of dollars for a CIO or a board member, who effectively provide absolutely no benefit to the company (their job can just as easily be done by the professional and capable staff under them), and then scrimp and scrape over paying expects in their field who actually get the work done.

    So while they continue to value "corporate flakeys" over the people actually on the ground doing the work, they are creating their own problem.

    I absolutely guarantee, that if you put forward a position with FAIR remuneration, you will get a flood of capable applications, PROVING that it is the attitude of those hiring that is artificially inflating this "skills shortage"....

    There are NO shortage of skills... just a shortage of common sense among managers and how much value they assign to IT.
  • Just a question

    @trevagreene: Which part of ICT does your skills fall under, and where are you based?

    Trying to find skilled and experienced Systems and Network Engineers in WA is impossible. They are either demanding huge salaries (completely out of proportion for what we as a small ICT support company can afford) or are unwilling to move interstate.

    The candidates we do get in after advertising a position fall flat with-in days, having misrepresented (aka blatantly lying about) their experience / skills. Those that come in and do have industry certifications from either MS or Cisco (as examples) have NO clue as to what they actually need to do, if it doesn't fall into one of the default scenarios taught during their 5 day crash course.

    Kids coming out of TAFE / Uni seem uninterested in working (I had to ban a apprentice from bringing his phone into the workshop, as he spent more time on it than working), or are so clueless you wonder why they made the effort of going to TAFE in the first place. And no, we're not talking about experience related performance, this is base level knowledge that you'd expect someone who presents a Diploma-level qualification to have!

    In my opinion, if you want more Australians to be employable in ICT, change the way they are trained, so that the expected base knowledge is there at least. Do away with OBE for ICT at TAFE, it is killing the ability of young graduates to gain entry into the job market!!
  • Worked in I.T for longer than some have been alive BUT....

    ....back when I started there were no courses for the industry, just "If you want to do that job, great!" and so that is how I started in the N.A.B. in I.T. having been a general banking clerk and teller beforehand. Since then I have done things such as learning Basic and Cobol at need and programming in them and a myriad of other things. I can build, as any of you reading this can, servers, desktop machines, networks and so on from the ground up. I avoid Macs only because I need to eat and there isnt money enough in it but I do Ipads and such as well and am currently learning App programming with an emphasis on Android as I believe the same short sightedness of Apple in between Jobs being there is what would have killed the company had Gates not injected funds. Post Jobs, I think it will head the same way and seems to be living up to that expectation even now.

    So what job could I get seeing I have worked THAT LONG in I.T. do you think? No, let's be clear - when I started the only qualification you needed was the ability to open your mouth and say you wanted to do it. Have I bothered to get qualified since then? No but I do the job anyway. So what job could I get? The answer is that I can *NOT* get a job on a permanent basis in I.T. nor can I get a part time one either but I *DO* get hired on a consultation basis which is glory speak for "We have this problem no-one in here can fix" and I fix it. No-one asks my qualifications then. They have an urgent problem and they need it fixed and I do it.

    I am no Robinson Crusoe, as the old saying goes, either. I have met and know people in the same boat as me - older than 50 with no degrees fixing the blunders of those WITH degrees where said people are people with a bit of paper but possessing no clue. I have implemented disaster recovery for mining company suppliers and had to avail myself of those disaster recovery backups when they refused to put in UPS devices and paid the price by having power outages at critical moments. No computer when I arrived there turned into the same old computer they knew and loved 40 minutes later with only the document they were working on at the time the power went out missing and even then I was able to grab back most of it.

    Yeah all that is nothing to those of you working in the industry. I know. It is impressive only to those who need it but the real problem is in conveying that idea to them, one I do reasonably well. I enjoy the looks of horror on their faces when the idea gets across! ;-}

    So there we have it. I have all the experience, none of the paper qualifications and decades doing the job, teaching others how to do it and being able to talk to people the way they wish to be talked to by me in ways they can understand. What do I lack? A full time salary job. Who wants someone over 50 who knows how to do it when you can get someone half that age with paper qualifications? The answer to that is "Only companies where the data isnt sacrosanct or companies where they have never experienced a problem and dont think they will ever have one, either".

    After all the above is said and done, I remain working on call in those jobs that others get paid to do but cannot actually do. So I make income and put bread and butter on the table and honestly, there are days where driving from an urgent job in Campbelltown NSW to another urgent job in Lithgow NSW are not so bad! Still, making good money one week and not as good the next IS disconcerting sometimes!!
  • Government wake up.

    Employers and those seeking staff are the problem. In this case the article is about IT, but I have seen it in the meet industry. Loads of Afriucans brought in by a company that could not keep Australian staff. Management was the problem. 457 was the cure of that poor management.

    I clearly recall an advertisement that appeared just days after was released seeking a VB.Net programmer with at least 2 years experience. Another job vacancy the would not have been filled by anyone but a liar.

    I see in this a single employer saying that they can't get people unless that pay exorbitant salaries. My heart bleeds, but if that is what the market demands, get with the program, and pay up or train your own indentured staff. Your in Western Australia. Idiots with spittle dribbling off their chin can earn thousands a week on the cray boats.

    Mining companies pay silly amounts to people and fly them half way around the country. Why, because most workers are only happy if they can see the Swan (or Derwent or Torrents or whatever.)

    Occupation Mining Engineer. Address Perth. Not many mines in Perth. But he has a mine salary. So everyone in his street want on to. Talk to your state government about why they don't tax fly in fly out to balance the books. Don't whine about a skills shortage. There is none.

    There is however a prepared to turn up and do the job shortage, but that is social media driven.
  • Skills shortage my foot

    What a load of rot. If it is not the agencies only contacting people with paper qualifications it is businesses like Westpac off-shoring through their service provider to save a buck. I watched as quite a few talented people were laid off from Westpac to the detriment of that company. Meanhwile I am in the same boat as Greg W, 15 years experience as a Project Manager and a long list of successful projects here and overseas, but no paper qual's and can't get past first base with an agency because they are asking for ridiculous qualifications and the CV won't scan for all the key words. The industry is a shambles and going to get worse due to this kind of action.
  • There is an exception though

    There is an exception though. For very niche, specialised sectors of IT there is a skills shortage. For example,
    • Niche fields are niche for a reason

      These niche markets will always have a shortage because companies want people who already know how to use multi million dollar CRM's and ERP's... unless you were lucky enough to get to work on one of these right out of college there is no way you would know anything about these systems... the questions becomes, why would you bring in 100's of people who definitely will not have these skills either in the hope that 1 person with this skillset slips through? Wouldn't it just be more prudent for companies to invest in training their employees? The answer is probably that companies are afraid of talent flight if they train their employees or employers simply see no worth in it.
  • Shortage my eye

    Over the last few years, I've seen Australian companies pay local employees less and less. Not only does it look like the market is shrinking, there simply are not enough jobs out there. At times it looks like there are more recruiters out there than actual jobs for the IT Market.In my opinion this field now have the lowest pay ceiling that I can see of any industry out there and all because people are willing to outsource or bring in people on 457 to work for a fraction of the cost.
  • I'd like to add

    People claim that they can't get skills in IT without pay exhorbitant amounts.
    This is such a load of croc... why is paying $100k+ to an IT guy exhorbitant if he is good at his or her job? No one questions twice or thrice this salary being paid to marketing guys or guys in investment banking! Governments cry about not enough Sciences and Math graduates... why would someone do hard majors like the Sciences if they are going to be paid far worse than Business School graduates who have no skill they bring to the market place but land marketing, sales types jobs and make tons more money? Basically not having a quantifiable skills in the market place means you actually get paid to show up to work, while having a quantifiable skill means you get told you are too expensive and your job gets outsourced!