Firms fail to skill up for recovery

Companies must improve their skills management if they are to take advantage of any economic upswing, according to e-skills UK.

In its latest review of the IT employment market, the sector skills council is cautiously optimistic about the possibility of widespread recovery.

Its e-skills Bulletin points out that in the fourth quarter of 2003 the rate of unemployment in the sector fell below the national average for the first time in over a year.

In addition, two-thirds of IT skills areas saw an increase in demand over the previous quarter.

Peter Hounsome, a research analyst at the organisation, said: "Demand for staff is up across the board, trade surplus is up, investment is up and orders are up, so the signs are looking quite favourable for the industry.

"My main worry is whether the sector is sufficiently prepared to take advantage of the situation.

"There is going to be increasing demand for IT staff and increasing pressure on companies' budgets as they try to recruit and retain the quality staff they need to take advantage of the upswing.

"The problem is that half of employers already have IT skills gaps."

Hounsome also pointed to data from the National Employer Skills Survey which suggests that organisations' training provisions and forward planning are woefully inadequate.

"Only a third of companies have a training plan or training budget, and only two-thirds have a business plan," he said.

The e-skills Bulletin, published quarterly, collates and interprets IT employment data from various government and industry sources.

In the fourth quarter of 2003, the greatest growth in demand was for permanent internet staff and contract PC support workers, whose numbers were up by 32 and 24 per cent respectively over the previous quarter.

The organisation said that other fourth-quarter industry data suggests that the growth is likely to continue.

It noted that the FTSE index for computer services rose by eight per cent, more than three-fifths of business application developers reported increased sales and private-sector IT investment grew by £144m (six per cent) over the period.