‘Recently released data from ONS/Textkernel shows that over the past five years, growth in demand for IT staff in Scotland has outstripped that recorded for the UK as a whole, with increases of 89% and 45% respectively over the Q3 2017-2023 period.’

So says the new BCS report, The Tech Labour Market, Scotland, handed out to delegates at the organisation’s Digital Skills Network Scotland event.

The report stated that skills shortages have increased among Scottish tech sector employers throughout 2022 (up from 47% to 51% of businesses) and that labour shortages were the factor most often thought to be affecting turnover among tech firms in Scotland during the third quarter at 20%, double that of the previous quarter.

With that mind, a panel made up of Tich Kent, Senior Software Developer, Amazon; Joanna Allen, Head of Projects & Programme at Scottish Tech Army; Craig Reid, Director, Mazars; Dr Colin Smart, Enterprise Architect Lead-Director, Deloitte, took to the stage to discuss the issues around developing an adaptable and digital workforce for Scotland.

Tech Talent Supply and Demand

Through the third quarter of 2022, just under one in three Scottish IT firms experienced ‘a shortage of workers’ – a 3% increase on the previous quarter, something that the report stated was characteristic of a wider industry trend increase occurring over the previous year. 

“We don’t recruit top talent,” says Dr Smart.

He adds: “People who excel in computer science are going to get a much better offer in terms of financial reward from the tech monoliths such as Amazon and Google. If all we did was throw money and opportunity to people and say, ‘we’re going to take the cream of the crop’, we’re not doing our bit for the wider ecosystem and building back into that talent pipeline.” 

In the case of Deloitte, Dr Smart says they like to “bring in people who are curious, people who are keen to learn, people who are passionate about a topic, about their sense of purpose, and then support them in their development through their career.”

Varying degrees of this approach was prevalent throughout the panel, with Mazars Director, Craig Reid, saying that when they recruit for any apprenticeship programme, they do so “completely blind.”

He adds: “I like to interview individuals without seeing their CV or without any background knowledge on the individual apart from their name.”

Senior Amazon Software Developer, Tich Kent, also acquiesced in that he feels there must be a reassessment of pathways into tech employment that moves away from the traditional modality of school, university, then job. For him, the answer lies in more proactive internship and apprenticeship programmes.

He says: “We massively expanded our apprenticeship programme and that’s been successful in offering a route into tech for people that don’t come from that traditional background, as well as bringing in those who are actively seeking a career change.”

Kent’s point is vindicated through the wider tech industry data provided in BCS’ report, which states that the number of people starting tech modern apprenticeships (MAs) during the third quarter of 2022 was up 34% on the previous year to 645 starts in total or 7.5% of all starts at that time.

While that seems like good news, that’s only the case if you observe tech as an umbrella industry. Looking at IT – so crucial to modern enterprise – the story is starkly different. By the third quarter of 2022, there were approximately 9,000 people working as IT specialists in Scotland who had completed an apprenticeship – 6% of the total IT specialists at the time.

This was well below the norm for all workers who had come through an apprenticeship scheme in Scotland (10%). In fact, there’s been a concerning downward trend in this regard considering IT was nearly in line with the broader workforce as recently as the third quarter of 2019. 

From the Scottish Tech Army’s Joanna Allen’s perspective, there’s much less of a stigma now around volunteering to pick up tech and IT skills. This embracing of extra-curricular upskilling could arguably be attributed to the shifting sands of ‘technical skills’ and requirements from employers, with the top 5 now comprising Agile (33%), Azure (17%), DevOps (13%), AWS (13&), and SQL (13%). 

“What we’ve seen is a lot of people come to us for that practical experience,” says Allen. 

She adds: “When we first started, there was scepticism around volunteering, it was kind of this thing that you did when you’re retired. We’ve seen a real shift in acceptance.”

What Else Can be Gleaned from the BCS Report?

The gulfs in the Scottish tech labour market (specifically, IT) and business outlooks for the year serve as some of the most compelling data offered in BCS’ report. What’s concerning is that Scotland seems to be falling behind in key metrics when compared to the rest of the UK.

More than ever, there is a demand for advanced IT skills, with more than six in 10 tech sector employers surveyed in the final quarter of 2022 stating that they had ‘experienced an increase in demand for advanced digital skills in the last 12 months.’ Around one in six (16%) stated this to have been the case with regards to IT user/basic digital skills.

This palatable need for IT skills across the board, however, is outpacing training and education among IT specialists. For example, excluding Northern Ireland, job-related education and training among IT specialists was lower in Scotland than in any other UK nation or region during the third quarter of 2022.

Low incidence of work-related education/training was not limited to this quarter only. In recent years, Scotland has consistently recorded below the UK norm, according to BCS’ report. 

With a confluence of all this data in mind, what are the views on performance outlook and how does it compare to last year?

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According to the data, in Q3 2022, a larger proportion of tech employers anticipated increases in business performance over the coming year, compared to the wider economy (52% versus 30%).

However, it should be noted that this figure of 52% is a drop from the previous two quarters (58% and 55%, respectively).

This dulling view on performance, while not quantifiably tectonic shifting, is reflective of a worrying malaise setting in around the Scottish tech labour market when you consider a confluence of worrying data trends with regards to labour, IT skills and decelerating training and education programmes.