The combination of accelerating retirement rates with a significant decline in the number of European students graduating from IT-related courses leads many firms to fear an IT skills shortage beginning in 2006. However, the reality is more complex, according to a recent report by Forrester Research, Inc. (NASDAQ: FORR). In the future, companies will see their IT skills requirements shift away from technicians and more toward business-oriented profiles. They will continue to outsource more routine activities. This shift in the enterprise impacts education and recruitment. In theory, the educational system should be able to rapidly create new programs to train IT/business analysts, architects, enterprise program managers, and vendor managers ¿ skills that firms expect to need in greater numbers in the future; however, Forrester believes that, in practice, this will take too long to meet company demands.

Richard Peynot, Senior Analyst at Forrester Research, states: ¿Other sources of talent, such as service providers, also need staff with technical skills ¿ and the lack of new IT graduates gives them cause for concern, too. All the evidence indicates that Europe faces a serious risk of a shortage of IT skills and Forrester believes that companies need to take action now to support long-term IT competency needs and to pay close attention to the implications of renewed competition for the best talents.¿

While hiring is one way that companies try to tackle the problem of higher retiree numbers, Forrester also sees a new focus on training and education. In a recent survey of IT decision-makers from leading European economies, Forrester found that they plan to significantly accelerate spending on training between 2005 and 2007. The survey also shows that companies look to engineering schools and technology universities to provide more content in disciplines like business, management, finance, architecture, and contracts; 90% of respondents complain about missing disciplines or a lack of depth of content that the educational system delivers in these newly important IT domains.

The Educational System Needs Time To Adapt To Competency Shifts

While some companies may have a clear picture of their future IT skills needs in mind, few academic IT departments yet reflect this profile in their curricula; and ¿ as Forrester uncovered in a parallel study of European technical universities and engineering schools ¿ academia has barely begun to transform its IT programs. Meanwhile, many European countries can¿t even generate a respectable level of enthusiasm for computer sciences among young people planning to enter higher education. The result, according to Forrester, is that European governments face an uphill task to meet the bare minimum of IT skills that industry and commerce need, let alone reach the ambitious targets of the Lisbon Agenda.*

Outsourcing Shifts Technical Positions To Service Providers

Forrester reports that many companies don¿t renew ¿routine¿ positions in development and operations simply because they will outsource them. This trend is particularly evident in the finance and public sectors. However, outsourcing does not mean simplification. Companies that opt for global or selective outsourcing can¿t afford to move all responsibilities and decisions to service providers. Security, enterprise and technical architecture, innovative solutions, new technologies, and evolving business remain critical challenges. The decisions should be made internally by people with high skill levels ¿ positions that Forrester believes are not ¿offshorable.¿

Peynot comments: ¿These high-level positions require experience and a relevant background. The educational system may take some time to align its programs with demand ¿ so companies should seriously evaluate the possibility of training adults either internally or through partnerships with universities.¿

The report mentioned in this release, ¿Europe¿s Looming IT Skills Deficit,¿ is available to Forrester WholeView 2¿ clients.

* In March 2000, the EU set a target to become the most competitive and dynamic knowledge-driven economy by 2010. See this link for more information.