Tech sector needs to be sexier

The skills shortage in New Zealand's information communication technology (ICT) sector is restricting growth, prompting calls to make the industry more appealing to school leavers.

Sexy is a word that needs to be used more often when it comes to ICT, says Xero chief executive Rod Drury.

"When you hear the success stories, there are lots of good things happening in ICT. There's lots of travel, people make quite a lot of money and there's lots of toys. It's really sexy stuff."

Wellington-based Xero, which designs online accounting systems, employs 42 people and is looking to employ up to another 50 across New Zealand, UK and Australia in the next year.

But Drury is worried about the company's ability to find enough staff to keep it growing.

"It's a real constraint to growth. There's an absolute shortage right now. Most of the tech companies are looking for staff."

Xero usually has five vacancies at any one time and along with most other ICT companies it is frantically employing good candidates even if they don't have an opening, because they know they soon will.

"We're always looking for staff. If we find good people we create roles for them. We don't let good people go."

Christchurch's SLI Systems, an internet search technology company with offices also in the UK and US, is doing the same.

"We find it pretty hard to get the right people. We'd rather be over-resourced for a period of time and carry that for a while. That's very symptomatic of the market," engineering manager Wayne Munro says.

"It's pretty hard to find these people and if we find the right people we'll grab them whether or not we have a vacancy for that person straight away. We are finding staff, but at the same time we're growing and we need more. We're never catching up."

SLI Systems is looking for eight people, including four IT staff.

"Hopefully the staff will come along. If not, we have to come up with some sort of back up plan," chief financial officer Rod Garrett says.

About 4000 new ICT jobs were created in New Zealand each year between June 2001 and June 2006. More than 11,000 are expected to be created during the next four years, according to a study released this month by International Data Corporation.

The demand has created a huge shortage with an Information Technology Recruiters Survey, published by the Department of Labour in December 2006, finding that out of 134 specialist IT areas 118 were in acute shortage.

Application and web development experienced the highest shortage, followed by networking technology.

Most of the 27 recruitment agencies that took part in the survey said it had become more difficult to recruit candidates than the year before and most expected the difficulty to persist during the following 12 months.

The latest Labour Market Outlook predicts continued pressure on skills and the supply of labour. It expects skill shortages to remain at high levels in the short to medium term.

SLI believes the key to beating the skills shortage is having the right culture. It must be doing something right because in the six years it has been operating, it has never had any engineering staff leave.

"My feeling from talking to people, is a number of tech companies run on fairly tight budgets and treat their engineers as a commodity and don't treat them well. We try to treat our staff well and we keep them," Garrett says.

They believe it is important engineers either have their own office or share with only one other person.

"Some of the senior staff have told us they couldn't stand working in an open plan environment."

Flexibility is also a key issue in retaining staff.

"We've got one case where one of the staff wanted to go and do his OE, so he's working for us overseas. We employ quite a few graduates and it's inevitable they will want to do that. We try to accommodate that within the company."

SLI has incentive schemes where staff get bonuses depending on the number of new customers. Staff can also buy into the company with share options, which gives them an added incentive to help SLI do well, Garrett says.

He is not sure where the answer lies to address the shortage.

But, Gen-i general manager Chris Quin believes the IT industry has to work together to help alleviate the shortage.

"At the moment most organisations just compete for resources, attempting to steal staff off each other and offer them more money. It's not good for the industry. We need to work together. This is the responsibility of industry members like us and others."

He says the industry is not as sexy and cool as it likes to think it is.

The Telecom business arm, which has 3500 business clients in New Zealand and employs 1700 people, has 55 vacancies and will be looking at employing more than 200 in the next year.

Quin cannot see a time when his company will have full employment.

The New Zealand ICT industry is operating in a zero unemployment environment, forcing Gen-i to make sure it can deliver on promises it makes to clients, Quin says.

Gen-i has a team of full-time staff dedicated to finding potential employees. It also uses recruitment agencies, attends shows and pays staff up to $1000 for recommending successful candidates.

About a third of Gen-i's vacancies are filled by people from the UK and Europe.

But Waikato Institute of Technology School of IT programme and education manager Garry Roberton says we can go overseas all we like, but Australia and the UK are experiencing shortages as well. Firms recruiting from overseas might still have some success, but it is because of lifestyle and incentives, not salary.

Polytechnics experienced a 30 per cent drop in ICT enrolments between 2003-06 and universities have seen a 50% drop, prompting staff redundancies at tertiary institutions across New Zealand, he says. There is a whole variety of reasons behind the drop and that is the problem, Roberton says.

The dotcom crash is partly to blame, along with a lack of understanding about the industry from parents, secondary school students and careers advisers.

"They think it's hard work, low pay. It's got a geeky image. They think there aren't any jobs, which is plain crazy."

Graduates earn an average of about $35,000, but because of the shortage that could go up by $20,000 within two years.

Roberton believes the industry needs to do a lot more to make itself more attractive to school leavers. It needs to emphasise the social and people skills side of the job.

"It's perceived as a low value subject. We have to turn it around. We have to get secondary students looking at computers and ICT as a valid, exciting, interesting and valuable career."

The Ministry of Education is looking at ways to increase the number of students taking up IT at school. The National Advisory Committee on Computing Qualifications is also developing a collaborative degree that can be offered by all institutes of technology and polytechnics (ITP) throughout the country. At the moment they all offer their own individual degrees.

"Some of the smaller ITPs are struggling. The degrees are becoming less viable and economic."

If all ITPs offered the same IT degree then some could offer the first year or two and then students could complete the final year at larger ITP.

In a bid to stem the flow of graduates heading overseas, Wellington IT companies, including Xero, are taking part in the Summer of Code internship programme, where 28 students from Victoria and Massey universities spend the summer working for them. The students are paid at least $17 an hour and companies can apply for funding from the Foundation for Research, Science and Technology, which will pay $14 an hour for the students' time.

The Department of Labour has also got several initiatives on the go.

Its immigration arm is involved in pilot projects, including determining the issues stopping employers from taking on migrants.

Immigration New Zealand South Island relationship manager Craig Walsh said it set up a project where employers were sent a list of all the migrants looking for IT work and applying for residency. About 25 people picked up jobs from it.

It even held a "speed dating" event in Auckland where graduates and employers had a few minutes to introduce themselves to each other.

Christchurch IT consultant Edwin Dando has a different view on how to address the skills shortage. He says companies struggling to recruit new staff should not bother. Companies needed to look closely at how they approach their business and ask themselves if they really need more people.

Businesses need to identify which areas actually require expertise and knowledge and areas where lesser skilled people could do the job, Dando says. "It's always going to be tough for us to attract and retain skilled, specialist staff in times of economic growth. To survive we need to be smarter."

- © Fairfax NZ News