NI firms beginning to feel effects of shortage of skills in electronics

The shortage of skilled recruits to the electronics industry, a problem identified in the latest quarterly executive skills survey from PA Consulting, highlights a difficulty affecting sectors of the Northern Ireland economy.

The survey offers an optimistic view of Northern Ireland's economic prospects, but Mr Michael McDonnell of PA, says the results reflect problems experienced by growing numbers of businesses in recruiting skilled personnel.

One factor is the high rates of pay available in the Republic, encouraging many Northern people to head South. This has led to noticeable skills shortages in certain sectors, particularly IT, engineering, and construction.

"The increasing competition for electrical and electronic skills is confirmed by our contact with key players in the industry," Mr McDonnell said. "Specialist technical posts have been difficult to fill at the entry level for some time, but the supply shortage is now extending to management grades, as new positions are created, and salaries rise."

He said that while international companies could plug gaps in the short term with internal transfers, indigenous businesses were fully exposed to the difficulties a tightening labour market creates.

The chairman of the Northern Ireland branch of the Institution of Electrical Engineers (IEE) agreed. Mr Alan Watts said the arrival of new firms in the past five years had led to the expansion of existing companies, particularly in telecoms, software and electronics.

He added that Northern Ireland was a victim of its own success in that the local economy needed more electronic and software engineers to maintain its recent growth.

"These are now clearly in short supply and this endangers continued expansion," he said. "The IEE is particularly concerned with professional engineers in electronics and software. It would be a mistake to think that skills shortages in these areas only affect engineering companies.

"Today's businesses all rely on engineers who provide the technical innovation and communications infrastructure, so a shortage impedes growth in all sectors."

He said it was clear talking to IIE's 1,900 Northern members that salaries had risen.

Although the IEE's main interest is in degree engineers, Mr Watts said an even greater shortage existed for non-degree engineers and technicians. "Ultimately, the solution lies in attracting more people into the profession and in providing suitable training for them. Much work is also being done by the IEE and others to update the poor image of engineering and so attract more entrants," he said.

Recruitment is not always the problem. The University of Ulster says demand for postgraduate computer courses at the university's Magee College campus in Derry exceeds places by 66 per cent. The reason for the demand is Derry's growing IT industry, which the university says has resulted in growing interest in computer-related courses: two out of every three applications for the postgraduate course are turned away.

Dr Bill Johnston, director of the postgraduate computer course, said resources could not meet demand. "We have added a further 100 places to our Computer and Information Systems postgraduate course," Dr Johnston said. "But it still isn't enough. I have 1,500 applications on my desk for just 500 places."

The Dean of Informatics, Prof Norman Black, said only around 20 people out of the 500 students on the course received funding. "The fact that the majority of our students on these courses are self-funding is an indication of their commitment and determination.

Employers like people who have come through our computing conversion courses," Dr Johnston added. "They see those graduates as having proven adaptability." The university's vice-chancellor, Prof Gerry McKenna, said demand for IT courses would have to be met for Northern Ireland to compete in the "digital society". He added that money should also be made available for graduates to retrain in new technologies through new conversion courses.

The government document Strategy 2010, presented last year, identified six growth sectors in the economy, among them electronics, telecoms, computer software, health technologies, tourism, and tradable services such as call centres and back-office jobs. In electronics, the document projects a growth in turnover to £2.5 billion from £829 million, equivalent to 15 per cent in output growth. Employment in the telecoms sector is expected to grow by 5,000, up from the current 6,000-7,500.

Computer software is the fastest growing sector of the economy, and the target is that it will employ 25,000 people by the end of the decade, generating £2.5 billion in revenue. In the health technologies sector, it is thought output could grow to £1 billion from £170 million over the next 10 years, with employment rising from 3,000 to 13,000.

But in a recent review of IT skills availability on the Northern labour market, the NIERC said there was "little likelihood" of a shortage of IT-qualified personnel. It said "significant progress" had been made in balancing the skills supply and demand of the local software industry at entry level.

The report said that while there was a continuing difficulty in finding all the experienced people required for the industry, the region should be well placed to take growth opportunities in the sector, providing higher and further education enrolments continued to grow.

The Minister of Higher Education, Dr Sean Farren, said that Northern Ireland still faced the challenge of creating the labour supply conditions which would enable the region to take full advantage of the global opportunities in the wider software industry.

"There are currently shortages of experienced staff for many more senior positions, which are inevitable given the rapid international growth in the sector. The report paints a reasonably positive picture, but we cannot be complacent and I have set my sights on ensuring that the education and training sectors reflect the changing needs of the economy," said Dr Farren.