Ireland’s IT skills bottleneck

26 Jul 2007

Ireland’s IT sector is struggling with a major skills shortage and is fighting to keep its top talent.

One of the most famous tech industry books is the provocatively titled Only the Paranoid Survive by Intel co-founder Andy Grove, but it’s probably not on Derek Ashmore’s reading list.

Nortel Ireland’s country manager is currently hiring senior staff and a career path leading right to his office door is a hot topic of conversation among interviewees.

Not that Ashmore is daunted; in fact, he likes it that way. “When you get to a senior-level discussion, that comes to the table very quickly,” he says.
“It’s important that people are looking for your job. You have to have that calibre of people in the organisation who want that. On a personal level, it’s important to me that people are thinking like that. You don’t just want people who say ‘I’m bored in my job and saw your ad on the web’.”

That’s not to say Nortel – or any other IT company – is enjoying an easy time in recruiting top staff. Observers say the Irish jobs market has been squeezing slowly tighter.

John McKeown, head of resourcing with IT Alliance, an Irish-owned technology outsourcing provider, has first-hand knowledge of the battleground, having worked in resourcing for multinationals based in Ireland for several years.

“In my experience, it’s extremely tough in the Irish market across all sectors but specifically in the ICT arena,” he says.

Ashmore’s own experience bears this out. “It took me seven months to find an opportunity that attracted me,” he asserts, referring to his time scouting for roles before taking up his current position last December.
The problem is not new, but a recent survey has shown just how acute it has become.

According to the research, 93pc of senior managers in the Irish IT and finance sectors said it is more difficult to find high-performing candidates than it was two years ago.

Technical and sales roles are the hardest to fill at a senior level, the research found.

McKeown says hiring senior-level software developers, for example, frequently happens through networking and contacts rather than the traditional recruitment agency process.

More worrying is that the expected economic slowdown may not make life easier for companies in hiring mode. Almost 40pc of those surveyed believe it will be even harder to recruit senior staffers two years from now.

“To get the top players, the real impact performers, is tough,” admits Stephen Kennedy(pictured), managing director of Talent Partners, which commissioned the research.

Adding urgency to the problem, almost one in three Irish companies (29pc) said turnover of high performers is increasing compared to two years ago.

More than half of the companies polled for the survey lost a high performer within the past 18 months and said this had a negative impact on their company.

Customer information and intellectual property departs, skills and knowledge leave; then there’s the cost to recruit and train a replacement.
On average, this loss translated to €237,000 when measured in financial terms. For a handful of companies, this figure was in the millions.

Kennedy makes a sporting analogy, using Manchester United’s unsuccessful efforts in replacing a player of Roy Keane’s stature. “A lot of companies are looking to recruit people who are good, but not necessarily big game players,” he says. “There’s a limited talent pool and I think it’s dwindling.”

Ashmore has found some people in the market positioning themselves as senior candidates without the CVs to back up their claims. “They have the aspiration but don’t have the experience.”

There may be several factors to explain the loss of available talent.

According to McKeown, some senior professionals prefer contracting rather than permanent roles because this gives them a much wider breadth of experience and variety than a full-time role could offer.
“In one year, you could get exposure to three or four different companies, on site, and I think people like that,” he admits.

Kennedy has seen some take the entrepreneurial route for the freedom and easy decision making it brings. Coaxing such people back into a full-time role can be tough.

The deciding factor won’t necessarily be just another hefty pay packet, says McKeown. “Look at the job ads; a lot use words like ‘career progression’ and ‘career path’. These are key words.”

The Talent Partners survey suggests that not everyone has got this message yet: 79pc believe that Irish organisations need to improve the way they identify, hire and retain high performers and 15pc rate themselves as poor or very poor at it.

Just 17pc actively have a policy for attracting and retaining top talent, but an internal talent management strategy – preferably under the guidance of a senior executive – is a must, according to Kennedy.

“We have a culture of the best guy being promoted into a management role, but it mightn’t be the best fit for him or the company.”

Training and development need more attention, Ashmore agrees. This needs some lateral thinking. “For someone out of the engineering department, it doesn’t follow that their next role will be senior engineer or up to a director of operations. They may have a skillset that’s better deployed in a sales or marketing role,” says Ashmore.

There should be a succession plan, articulated to staff. “Businesses need to understand their talent pool and align it with the career path of the person. Then you’ll get the most out of them,” he claims.

Companies should also work with headhunting firms, like how football clubs employ talent scouts, says Kennedy. Although strong performers can be nurtured from within, there are times when the only option is to go to the market for an experienced hand.

“It’s great to promote internally and do it by all means, but you need to benchmark against outside talent and see what you need to achieve,” he says.

“At the senior level, you want to have someone who hits the ground running,” he adds.

At least the survey suggested a high awareness among most companies of the need to improve how they identify, hire and retain high performers. If the signs of a tighter market prove true, it will be a must, not an option.

A clear path to door marked ‘boss’

Gerry McCarthy, consulting and integration (C&I) country manager at HP Ireland, counts himself as “living proof” that an employee taken on from third level and coached correctly can rise to a senior role.

He joined Digital, now part of HP, as a graduate in the early Eighties. “I went through a very similar programme that our graduates are going through now,” he recalls.

“We have a training and mentoring programme for all new hires,” claims McCarthy.

He believes training can be key to attracting new employees fresh from college. “Mentoring is a crucial part of getting graduates on board and it brings them along much faster,” he explains.

Overseen by experienced staff, new recruits are already working on
customer sites and delivering IT projects. “It has encouraged us to expand our recruitment in that area.”

Over the past 18 months the C&I division has recruited 13 graduates in technical and commercial roles and plans to hire a further eight candidates over the next six months.

This approach also helps to overcome the problem of potential shortages in experienced employees.

“It’s always been a challenge to recruit senior staff and will remain so.”
McCarthy’s example shows that graduates can at least see a clear path to the door marked ‘boss’.

By Gordon Smith