Orange & Gold Blog

Government urged to help plug digital skills gaps…


Following a recent run of broadly positive statistics about the temporary labour market and the 
IT contracting sector, the government was told (by Hays) last week that it should “promote and 
endorse” the use of skilled contractors in IT and other industries where the UK is experiencing a skills 
shortage, to help tackle what it claimed was one of the worst talent deficits in Europe. It stated that 
the mismatch between demand and resources in the IT sector had been exacerbated in the last year, 
with demand for services increasing as the economy has begun to recover and that if the issue is 
not addressed, it could actually hinder the recovery, given the potential for growth in IT and digital 
services. The government was urged by the recruiter to champion the use of skilled temporary and 
contract workers in the industries that faced the greatest shortages, following on from a report 
it issued previously saying that the majority of IT employers expected permanent employees to 
lack the experience required for the vacancies they anticipate needing to fill, acting as a barrier to 
development.
Separately, in an event focussing on digital skills in the North West of England (and particularly at 
MediaCity at Salford Quays) extensive debate was given to the issue of ensuring our economy can 
remain competitive in the global growth areas of digital and mobile development, cloud computing, 
web-technology and e-commerce, with employers saying that graduates and new employees are 
already out of date when they join the workforce. Professor Dennis Keyhoe (who runs a cloud 
computing and data centre business) was quoted as saying “the world needs 2.5m cloud computing 
engineers by 2015 – this country has produced none in the last year.” 
At the Conservative Party conference last week, MP Chris Pincher urged HMRC to provide a better, 
overall definition of freelancers/freelancing and to recognise the value of this part of the workforce 
to the UK as a whole in today’s economy. He also called for the expansion of the IR35 forum, so that 
it provides tax simplification to contractors. He said that the flexibility required in the UK labour 
market to address skills shortages and keep the economic recovery on track would be hindered 
otherwise. 
The above follows recent announcements by both big accountancy firms and the government 
itself that huge resources are going to be invested in cyber-security and by banks in their risk and 
compliance systems.
All in all, this adds credence to recent surveys reporting record vacancies for IT staff, a two-year 
low in the gap between assignments and the number of contractors expecting pay increases and 
increased opportunities.
Traditionally, contractors have often benefited from economic downturn, as companies run scared 
of investing in permanent staff, though at some point even the freelance market is affected by cuts. 
Currently however, it appears that there are genuine skills shortages in boom areas of the global 
economy and a growing tide of opinion that freelance contractors are an integral part of the solution 
to this issue and are correspondingly important to the continuing prosperity of the UK economy. 
One the one hand, in the short term this may be bad news for the UK’s competitiveness in the global 
market – if we can’t fill these gaps, the suggestion is this may actually hold back growth and our 
ability to take advantage in the fast-paced development of these sectors. On the other hand, it may 
represent very good news for freelance IT specialists, who are free to develop their own career to 
suit what the market wants, in terms of cutting edge knowledge and skills.