Comment: The next skills shortage?

20 May 2005

It’s been a few years — the turn of the century in fact — since there last was talk of a serious skills shortage in the ICT area. Then, the skills most in demand were in the software area — from cutting-edge Java and HTML tools right down to Cobol, for those ubiquitous Y2K projects of the time. A few years on, software skills are still key but the continued growth of the internet is fuelling demand for IT professionals who combine knowledge of both hardware and software systems. Network engineers are the people in question and it seems the demand for their services is such that recruitment agencies and employers are starting to notice the first inklings of a skills shortage.

“Someone with a Cisco accreditation is worth their weight in gold in this market,” comments Nessa Butler, managing director of Rescon Recruitment, who notes that pay rates for network engineers working on contract have been rising steadily of late. “Two years back, demand was down across the board and this included network engineers. A standard network engineer who got €200 a day two years ago commands €300 a day now — a 50pc rate rise.”

Demand is being driven by the continued growth of the economy and within it the technology sector itself. Businesses large and small are investing in ICT once again and the corollary is that ICT skills across the board are in demand once more. However, on top of that, there seems to have been marked shift towards network-based computing.

Pointing out that “convergence is definitely here” Mike Galvin, general manager of Cisco Ireland, notes that large blue-chip companies such as banks and insurance companies are investing heavily in networks that can deliver the types of services that are going to yield the hoped-for competitive edge.

“There’s a swing towards network architecture as the key to delivering everything else, so in the customer’s mind, the network is becoming that more strategic,” he observes. “The increased priority on the network is driving demand for people.”

However, it is not only the large banks and other indigenous firms that are leading the drive towards network computing. Barry Rhodes, CEO of the Internet Neutral Exchange association (INEX), an internet protocol (IP) traffic exchange and routing facility in Dublin, notes that the recent arrival of the large US dotcoms such as Google, PayPal and Amazon is also having a noticeable impact on the market for networking skills. Rhodes expects they will eventually use Ireland as their European digital content hub, which will require large server farms and extensive network infrastructure to move IP traffic back and forth. He notes that a number of existing INEX members, which include telcos and internet service providers, clearly feeling the pinch of increased competition for talent, have voiced their concerns over the growing shortage of network engineers.

Fortunately, the pipeline of talent appears to be relatively well stocked, particularly at the lower end of the scale. In conjunction with the institutes of technology and other higher-education colleges, Cisco runs a network training programme called the Cisco Network Academy (CNAC), which gives a grounding in general networking technology, not just Cisco’s.

To date, approximately 6,000 students have successfully completed the course and become Cisco Certified Network Associates. Galvin feels it is largely thanks to this that there have been no significant skills shortages but that shortages are still possible if demand continues to increase, he reasons. He reckons both Government and third-level colleges could do more to promote these courses, which provide essential skills to the economy.

Shay Walsh, director of networks at BT Ireland, also feels there is “probably going to be a skills shortage” in the network engineering area. One of the biggest employers of network engineers in the country, BT Ireland has approximately 220 staff in the networks area encompassing a range of skills including planning, design, construction as well as engineering. Though satisfied with the supply of engineering graduates, as the business has strong links with feeder universities of University of Limerick and Dublin City University, he feels there is already a talent squeeze at more senior levels shortages. BT is seen as a good potential poaching ground by up-and-coming telcos such and the newly arrived US dotcoms — Google et al. That relatively few staff members have been lost so far is thanks to the progressive career development policies of the company, he maintains. “You have to have proper continuous professional development, pay them the market rate, have a visible career path for them and treat them properly — in other words do what you say you’ll do.”

He also points out skills have to be adaptable and therefore he sees “getting the right skills deployed to the changing marketplace” as the biggest challenge. Similar to other interviewees, he notes the move towards new IP-based data networks, which are enabling new services such as voice over IP and IP telephony and are driving new skill requirements.

For now, we seem to be able to produce the network engineering talent we need — if only just — but there are clear warning signs that as the economy continues to grow and the IP networks become increasingly more central to business strategy, we could soon be facing a new skills pain point.

By Brian Skelly