UK faces triple whammy from skills shortfall, visa restrictions and Brexit uncertainty
Britain’s tech sector faces a triple whammy hit to its workforce without government action, according to new reports. 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 of Brexit on its 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 U.K. budget that covered 2016 to 2019 and affect STEM skills. It said the U.K. is also hampered by a lack of funding for new training providers.
This is against a backdrop of the tech sector accounting for 16 percent of U.K. domestic output and 3 million workers, which amounts to 10 percent of all jobs in the U.K. (manufacturing accounts for 10 percent and construction accounts for 6 percent).
U.K. 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 percent of vacancies.
Currently, the U.K. is in the bottom division internationally when it comes to the proportion of teenagers studying math to a high level.
The report also found that government-backed university degrees in computer science are not leading to enough jobs filled and 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 its crucial the Government does everything possible to increase the flow of talent to one of the UKs 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 of Makers Academy, said: “We know the single most important reason people dont 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, Coadec warned that restrictions on the availability of high-skilled specialists from overseas risks choking off a major growth sector of the U.K. economy.
It follows numerous warnings by tech industry leaders that Brexit and its new curbs on immigration from the EU could hugely impact the U.K.s competitiveness in tech.
Coadec is calling on the government to avert a skills crisis in an industry where the U.K. is currently a world leader by creating a special visa to allow qualified people to enter the U.K. and seek work in the digital economy.
It said Britain’s tech sector is at risk of a talent shortage of 800,000 workers, and it relies heavily on non-U.K. citizens: Nearly one-third of tech companies first 10 hires are from outside the U.K. 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 standardized, high-level exam in specific programming languages.
Taavet Hinrikus, co-founder of TransferWise said: “For the UKs tech sector to thrive, we have to find solutions to the current talent and skills shortages. Its 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 10 hires at the average U.K. 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 percent 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. One-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 U.K. 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 that 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. This could initially be piloted for Tier 5 countries.