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Report: UK faces triple whammy from skills shortfall, VISA restrictions, Brexit uncertainty

Britain’s tech sector faces a ‘triple whammy’ hit to its workforce without government action, according to a new report. Firstly from a critical fall-off in STEM skills in its own population due to lack of funding; secondly from VISA restrictions on the availability of high-skilled specialists from overseas; and thirdly from the uncertainty of the impact on Brexit in its a highly international tech workforce.
The Coalition for a Digital Economy (Coadec), a policy group representing tech and digital startups, is calling on the government to reverse cuts to the UK budget which covered 2016 to 2019 which affect STEM skills. It said the UK is also hampered by a lack of funding for new training providers.
This is against a backdrop of tech sector accounting for 16% of UK domestic output and 3 million workers, which amounts to 10 per cent of all jobs in the UK (manufacturing accounts for 10% and construction accounts for 6%).
UK industry leaders are calling on ministers to take urgent steps to boost STEM skills, adapt the current apprenticeship model and improve basic numeracy and literacy. It is estimated that Britain will need an extra 2.287 million digitally skilled workers by 2020 to satisfy its growing tech economy. Software developers are the most sought-after, accounting for 27 per cent of vacancies.
Currently the UK is in the bottom division internationally when it comes to the proportion of teenagers studying maths to a high level.
The report also found that Government-backed university degrees in computer science are not leading to enough jobs filled, not meeting industry needs, while at the same time successful new software developer training providers are failing to attract Government funding.
Tech leaders have called on the Government to move to a system where 16-19 mathematics is compulsory and adapt the apprenticeship model to allow uptake of software developers
Alex Depledge MBE, Chair, Coadec said: “The UK is faced with a unique opportunity to become a world-leading tech hub and it’s crucial the Government does everything possible to increase the flow of talent to one of the UK’s fastest growing sectors. That means increasing the proportion of 16-19 year-olds studying mathematics and STEM subjects to a high level, and a funding boost for software development training.”
Evgeny Shadchnev, Co-founder, Makers Academy, said: “We know the single most important reason people don’t apply to Makers Academy is cost, making the course inaccessible by the majority of British people. If the Government subsidised the course in the same way it funds apprenticeships or computer science courses, we estimate that the number of candidates we could train increase ten-fold within a year. That is 20 per cent of the nationwide computer science undergraduate cohort.”
In a separate report report release over the weekend Coadec warned that restrictions on the availability of high-skilled specialists from overseas risks also choking off a major growth sector of the UK economy.
 
It follows numerous warnings by tech industry leaders that Brexit and its new curbs on immigration from the EU could hugely impact the UK’s competitiveness in tech. 
Coadec is calling on the Government to avert a skills crisis in an industry where the UK is currently a world leader by creating a special visa to allow qualified people to enter the UK and seek work in the digital economy.
It said Britain’s tech sector is at risk of 800,000 talent shortage and it relies heavily on non-UK citizens: Nearly one third of tech companies’ first ten hires are from outside the UK.
To qualify for the high-skilled six-month tech visa, aspiring specialists would have to have studied at a designated institution or to have passed a standardised, high-level exam in specific programming languages.
Taavet Hinrikus, co-founder, TransferWise said: “For the UK’s tech sector to thrive, we have to find solutions to the current talent and skills shortages. It’s everything from how we build the capacity in the UK through education, and how we attract the best from around the world through immigration policies. Post-Brexit, the need is even more pressing.”
He and other tech leaders are calling for a new minimum six-month high-skilled visa to speed the flow of top global talent.

The report found that the first ten hires at the average UK startup are highly skilled, and dominated by developers and engineers. Companies are also very small: holding fewer than 50 employees, leaving them vulnerable to any further regulation and restrictions.
Almost 70% of respondents to the Codec survey said bureaucracy and time is already a major barrier. A number of those surveyed said they considered hiring from outside the EU, but decided against it after studying the visa process. A third of startups said it cost £6,000 to make a single hire. Much of this sum was spent on legal fees.
 
It also found that the greatest non-EU migration is from North America, New Zealand and Australia, where the same skills are already in high demand and therefore UK companies must offer even better packages to attract these workers.
The report urges the Government to pilot a scheme with a small number of highly trusted tech companies, who would endorse companies, just as Tech City endorses applicants. Once through this process, startups would be able to hire Tier 2 workers. One other suggestion is that companies endorsed through this process could offer equity compensation in lieu of some salary requirements when hiring Tier 2 workers. As above, this could initially be piloted for Tier 5 countries.

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