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IT reported as the ‘most productive’ UK industry

UK on track to becoming a tech superpower

New data reveals the IT and information services industry has seen the biggest improvement in productivity – growing by 13.71% year-on-year (YOY) since Q4 2022.

The Business Productivity Index, by ECI Software Solutions, reveals the 20 industries have seen the biggest leap in productivity and the least.  Between January to March 2023, the total register for public companies increased by 63,462 – 8.2% more than the same period in the previous year.

ECI’s Business Productivity Index analysed Office for National Statistics (ONS) data to see which industry’s productivity has grown the most, YOY. To create the business productivity index, the ECI used ONS productivity overview data from 20 industries relating to the final quarter of 2022, which was segmented by industry and year, to understand percentage change over time.

The IT and information productivity growth of 13.71%  – validates the UK’s drive toward becoming a technology and science superpower – with more than three million people working in UK tech. Since the ONS started measuring labour productivity, its average lifetime output sits at 74.79, while in 2022 it reached 121.1.

Productivity growth for businesses manufacturing food products, beverages and tobacco rose the least YOY, by just 2.02%. This was the only manufacturing sub-sector featured on the list to experience an increase in productivity. Production of transport equipment products took the biggest productivity hit, falling by 7.98% when compared to the same period last year.

Four other sectors of manufacturing also suffered a productivity loss – the manufacture of wood and paper products, printing and reproduction of recorded media fell by 2.77%; the manufacture of chemicals, chemical products and basic pharmaceutical products fell by 4.21%; and the manufacture of computer, electronic and optical products and electrical equipment fell by 4.64%. Although the manufacture of basic metals and fabricated metal products fell by 7.98%, this industry’s lifetime average is the highest on the list, at 100.48 points. In comparison, the average lifetime output for real estate activities (excluding imputed rental) sits at just 70.75 overall and is the lowest.

Beyond manufacturing, the industry with the biggest YOY productivity decrease was real estate activities, which decreased by 3.60%, and production which fell by 2.50%. The ONS has created a calculator for businesses to understand how productive they currently are.

Chris Fisher, VP of EMEA, LBMH at ECI Software Solutions said: “There’s a real push to improve productivity across the UK, getting us up to speed with some of our global peers. Recent statistics show that, across all industries, productivity is still at the same level as it was before the pandemic – though it has managed to successfully rise above the 2020 dip. Manufacturing seems to be particularly harshly hit and likely to be reeling from the effects of Covid-19 yet it also poses the most exciting opportunity. Data and IT services are becoming more accessible – and in turn, manufacturing businesses are well placed to make the most of the innovations coming out of the sector to help it work smart in the future.”

ECI’s Business Productivity Index can be viewed online here.

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Aberdeenshire recruitment agency bags Scottish Enterprise Award

The company offers an alternative approach to the mainstream recruitment process

Celebrations abound in the Aberdeenshire recruitment agency, Grace May People, this week after being awarded ‘Best UK-wide IT and digital recruitment services at the 2022 Scottish Enterprise Awards

The company offers an alternative approach to the mainstream recruitment process by providing bespoke technology and executive services across a variety of roles in the tech space.

The awards are sponsored by the digital business magazine SME News and serve to recognise individuals and firms across Scotland for their innovation, excellence, and dedication to providing outstanding customer service.

Sasha Jaypalan, Company Founder and Director of Grace May People, said: “We’re delighted to have received this award. It’s a huge testament to the hard work and commitment of our small team. Recommendations from clients and candidates play a critical role in the growth of our company and since setting up in 2015, we’ve become the trusted recruitment partner for a number of major companies and achieved a 5-star rating with over 70 Google reviews from candidates. This is fantastic recognition of our efforts.”

Holly Blackwood, Awards Coordinator for Scottish Enterprise Awards commented: “Scotland is full of successful and innovative enterprises, and these awards help to highlight the diverse range of small and medium-sized businesses that continually demonstrate innovation and excellence in their chosen sector. Our team rewards individuals and firms based on customer excellence in their chosen industry, the standard of their products and their commitment to service – and Grace May’s testimonials and their distinctive approach really shone out as exemplary. Congratulations to their team!”

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Meta sued for discriminating against US citizens

Parent of company of Facebook pays immigrants less

According to recent court findings, an IT professional filed suit against Meta, the parent company of Facebook, alleging it didn’t hire him because he was a US citizen.

According to the court filings, it’s alleged that the lawsuit said the company preferred visa holders — such as those on H-1B visas — at sites in the US because it could pay them less for the same tasks.

The plaintiff in the suit is Purushothaman Rajaram, a naturalized US citizen who lives in Pennsylvania. He has 20 years of experience in IT and it’s reported that Facebook considered him for employment on two occasions in 2020. The first being May 2020 when he was contacted by Infosys Inc. for a position at Facebook, and the second being in June 2020 by Facebook directly. He was hired on neither occasion.

The suit, filed on May 17 and seeks class action status.

“By law, H-1B visa workers must be paid by their employer at least as much as other individuals with similar experience and qualifications for the specific employment in question,” according to the lawsuit. “Thus, the only reason Facebook would choose to hire and relegate certain positions to visa holders is to pay them less than American counterparts, an unlawful practice that is known in the industry as ‘wage theft.’”

Meta hires H-1B visa holders directly, according to the suit, and has secured more than 20,000 H-1B visas with a vast majority for employees who will perform software engineer roles. It also said Meta is an H-1B visa-dependent employer in that 15% or more of its US workforce is on an H-1B visa.

In addition, the suit said Meta also brings in H-1B visa workers from third-party vendors such as Infosys and Accenture.

Rajaram’s lawsuit refers to legal action by the US Departments of Labor and Justice against Facebook in which the social networking giant agreed to pay $4.75 million to settle allegations of bias against US workers.

Rajaram’s suit seeks damages including punitive damages.

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Candidate shortages slow down hiring

Starting salaries show a record rise

According to the latest KPMG and REC, UK Report on Jobs survey, candidate shortages have slowed down hiring in both permanent and temporary recruitment. Even though expansions are high based on previous records, the increase rates hit 11- and 12-month lows, respectively.

The report, compiled by S&P Global, is based on responses to questionnaires from around 400 UK recruitment and employee consultancies.

The survey found that overall staff supply had the steepest drop in four months. Those surveyed attributed the candidate shortages to the low unemployment rate and uncertainty related to the pandemic and the war in Ukraine. Other reasons included fewer EU workers and robust demand for staff.

The candidate shortage has led to significant increases in starting salaries – the salaries for new permanent employees rose at the quickest rate in 24 and a half years. In addition, the average wages for temporary workers also increased at the fastest pace in three months.

Although all UK regions showed increases, there were variations in the various English regions. The Midlands showed the steepest increase in permanent placements, while the lowest increase was in the South of England.

Further variations were noted between the private and public sectors, with the largest expansion in demand being in the private sector.

The IT and computing industry continues to show the steepest increase in demand. Conversely, the softest increase was in the retail sector.

Neil Carberry, Chief Executive of the REC, commented: “We can clearly see that labour and skills shortages are driving inflation in these latest figures. Starting salaries for permanent staff are growing at a new record pace, partially due to demand for staff accelerating and partially as firms increase pay for all staff in the face of rising prices. Record COVID infection levels are also pushing up demand for temporary workers, particularly in blue collar and hospitality sectors, underpinning the ability of temps to seek higher rates.

“However, the overall number of placements being made is starting to stabilise. This is no surprise after a period of historically high growth, and in the face of more economic uncertainty. Even so, the jobs market is very tight. Businesses will need to broaden their searches and be creative in making their offer to candidates more attractive, in consultation with recruitment experts. But government can help by incentivising investment in skills and people during the inflation crisis.”

Claire Warnes, Head of Education, Skills and Productivity at KPMG UK, said: “There’s no end in sight to the deep-seated workforce challenges facing the UK economy. Once again this month, job vacancies are increasing while there are simply not enough candidates in all sectors to fill them. With fewer EU workers, the ongoing effects of the pandemic, the economic impacts of the war in Ukraine and cost of living pressures, many employers will continue to struggle to hire the talent and access the skills they need. With unemployment staying low, there are many great opportunities for job-seekers to join or rejoin the workforce in all sectors.”

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Global hiring maintains momentum  

Impact of the Ukraine crisis is not reflected in employer hiring 

According to the ManpowerGroup Employment Outlook Survey, strong hiring optimism has continued into the second quarter of 2022. The survey of 41,000 employers showed that employers in 36 of 40 countries reported stronger hiring intentions than this time last year with the greatest demand in IT, finance, and manufacturing. The demand for skilled workers has remained at a record high as employers continue to look to attract and retain the best, diverse talent while embracing the post-pandemic era. 

The ManpowerGroup Employment Outlook Survey is the most comprehensive, forward-looking employment survey of its kind, used globally as a key economic indicator. The Net Employment Outlook is derived by taking the percentage of employers anticipating an increase in hiring activity and subtracting from this the percentage of employers expecting a decrease in hiring activity. 

Jonas Prising, CEO and Chairman of ManpowerGroup commented: “Labour markets around the world are looking strong for Q2, with hiring outlooks back at pre-pandemic levels in most countries. Any impact of the Ukraine crisis is not reflected in employer hiring intentions. While Poland and neighbouring countries are dealing with the humanitarian crisis, we must be poised to help resettlement and employment efforts for refugees, adapting roles and requirements to fill vacancies and create new opportunities.” 

Jonas continued: “At ManpowerGroup we are working fast to leverage our experience integrating refugees into labour markets from other countries – for example from Syria to Germany, Afghanistan to U.S. – and to adapt and scale reskilling and upskilling programmes specifically targeted to this population. Now is the time for collaboration between employers and governments to make it as fast and simple as possible to integrate refugees into the workforce so they can earn a living, contribute to society, and most importantly feel welcomed in their new surroundings.” 

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Apprentices: the key to building the future?

Apprenticeship applications up by 37% 

According to data from CV-Library, the UK independent job board, apprenticeship roles have increased by 28% when compared to 2021 figures and are up 203% when compared to 2020 figures. These figures have been revealed in the wake of the 15th annual National Apprenticeship Week (NAW) where the theme for the week was ‘build the future’.  

NAW brings together businesses and apprentices across the country to shine a light on the positive impact that apprenticeships make to individuals, businesses and the wider economy.  

During NAW, focus was given to how apprenticeships can help individuals to develop their kids and knowledge required to have a rewarding career and how businesses can develop a talented workforce that is equipped with future-ready skills.  

Encouragingly, according to the data from CV-Library’s survey, candidates have made 74,574 searches for apprenticeship roles in February so far, and in 2022 to date, applications to these roles have shot up by +37% on the same year period last year.   

The data revealed that the industries proving most popular during National Apprenticeship Week were:   

Top industries for apprenticeship job searches (Feb 2022 to date)  

  1. Accounting/Financial/Insurance  
  1. Administration  
  1. Education  
  1. Sales  
  1. Retail/Purchasing  
  1. IT  
  1. Engineering  
  1. Medical/Pharmaceutical/Scientific  
  1. Construction  
  1. Automotive/Aerospace   

When it came to taking steps to apply, young people who wanted to begin an apprenticeship chose the following sectors:   

Top apprenticeship applications by industry (Feb 2022)  

  1. Administration  
  1. Engineering  
  1. Construction  
  1. Manufacturing/Surveying  
  1. Distribution   

Finally, the research also showed that apprentice salaries varied depending on the industry. CV-Library’s survey revealed that the top five highest paying industries for apprenticeships are:  

Top apprenticeship salaries (Feb 2022)  

  1. IT – average salary of £25,401  
  1. Education – average salary of £22,117  
  1. Manufacturing/Surveying – average salary of £19,006  
  1. Medical/Pharmaceutical/Scientific – average salary of £18,800  
  1. Sales – average salary of £18,237  

Lee Biggins, CEO and founder of CV-Library commented: “This data provides clear evidence of the increasing popularity of apprenticeships. The breadth and diversity of roles on offer is attracting more candidates and the skills shortage in the UK job market is enticing employers to invest more heavily in these schemes. If businesses don’t want to get left behind, they need to embrace apprenticeships. Training future generations of professionals should be high on the agenda for employers.”   

Ken Brotherston, CEO of TALiNT Partners also commented: “It’s great to see this trend which is a reflection of the move from many employers to take a long-term approach to addressing skills shortages. The wide range of different roles and sectors that modern apprenticeships can offer is also great to see (although traditional roles as a plumber or electrician are still in high demand and paying more than ever, too). Let’s hope this is a trend that continues to grow.”  

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Talent shortages ‘were evident before lockdown’

Demand for IT professionals up 76% year-on-year in July 2021

Data preceding the pandemic highlights the true extent of skills shortages in the UK with applications to jobs down 47% between July 2019 and July 2020. According to real-time data from the global network of job boards, Broadbean Technology, the decline in applications, largely attributed to the pandemic, suggests that the UK was already experiencing talent shortfalls before lockdown.

Sectors worst hit

In the engineering, accounting and financial services industries, the demand for talent increased by over 100% in the year to July 2021. However, when compared to two years ago, Broadbean’s data suggests that talent shortages are worsening.

Broadbean’s data shows that engineering vacancy numbers doubled (up 103%) between July 2020 and July 2021. However, when compared to the latest data with July 2019, vacancies were down by 20%, with the number of applications decreasing by 54%.

The financial services sector also saw vacancies double (104%) between July 2020 and July 2021. But for July 2019 to July 2020, vacancies dropped 12%, and application numbers declined 57%.

In the accounting industry, vacancies were up by 104% between July 2020 and July 2021, but were down 31% when compared to 2019 figures, while application numbers from 2019 – 2021 also fell 56%.

Demand for IT professionals still rising

The fast shift to online working environments in the last year resulted in an annual increase of 76% in vacancies in the IT industry. The digital transformation of workforces continues to drive demand for this talent in this sector.

As Alex Fourlis, Managing Director at Broadbean Technology explained: “While there are ongoing reports of a post-Covid talent shortage, as the so called ‘Great Resignation’ impacts headcount and increases competition for talent, our data shows that the skills shortage was already well underway before the virus struck. Covid may have pushed the severe skills shortages the UK is facing into the public consciousness, but trouble was already bubbling under the surface in the early months of last year.

“This can, in part, be linked to the impact of Brexit on talent pools and the need for an appropriate visa route for independent professionals to encourage people from outside the UK to work in the country.”

Pre-Covid skills shortage

Olly Newton, Executive Director, The Edge Foundation said: “Figures from the Government’s own Employer Skills Survey showed 226,000 vacancies created by skills shortages in 2017, up from just 91,000 in 2011. These are jobs that remained unfilled because the right skills couldn’t be found – an economic and social tragedy.

“It has cost employers dearly – £4.4 billion has been paid out in the past year on recruitment fees, higher salaries and temporary staff. It has also cost young people dearly – young people who should have been given the skills they needed to get into and thrive in those jobs.

“Research from before COVID showed that these shortages were widening not shrinking. Research by the Open University publicised by the Edge Foundation shows that nine out of ten organisations (88%) report a shortage of employees with digital skills. Meanwhile, looking to the future, work by the Government’s own Industrial Strategy Council suggested that by 2030, 7 million workers could be under-skilled for the requirements of their changing jobs.”

Photo courtesy of Canva.com

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Hybrid working fuels huge growth in IT vacancies with demand up 91%

With the arrival of the pandemic, the need arose for fast digital transformations and an agile working approach to the ‘stay at home’ orders issued at the beginning of the first lockdown in March of 2020. The increased need for technology solutions for businesses to continue operating during the most uncertain economic climate seen in a lifetime, could be directly related to the increase in vacancies for IT professionals that have continued to accelerate in 2021. Hiring levels in June represent the fourth record breaking month of the year and according to research conducted by the Association of Professional Staffing Companies (APSCo), hiring levels in the first half of 2021 currently make up 91 percent of the total of tech hires for the whole of 2020.

Hybrid working drives demand for IT professionals as the economy comes back to life

Gone are the days of full time, office-based working. Many businesses are now implementing hybrid working policies that allow for employees to split their work hours between home and the office. According to business intelligence specialists Vacancysoft, this new way of work has seen firms in England and Wales post 11,553 vacancies in June alone, marking the first time this year that hiring levels have breached 10,000. This sudden burst of advertised positions can be attributed to the removal of the work-from-home rule on 19 July, Freedom Day in the UK, and companies were pressed to have their hybrid working models in place and operational.

Data from Vacancysoft also revealed that the technology arena was responsible for the most professional IT vacancies which made up 43.2 percent of total vacancies in June of this year.  Banking followed in second place, with 12.4 percent.

Amazon retains spot as top hirer   

Across the companies hiring for IT talent in the first half of 2021, Amazon topped the table with 854 vacancies. The data also reveals that there was notable hiring activity at Sky, which published 771 senior IT roles in the first six months of the year, and JPMorgan Chase & Co who recruited for 742 tech experts over the same period.

Ann Swain, CEO of APSCo comments: “The fact that IT vacancies continue to perform so well is incredibly encouraging and reflective of not only the huge reliance on remote working, but also employers’ reliance on these experts to facilitate and implement hybrid working models as Freedom Day approached in June.  As the country continues to open up and recover from the pandemic we don’t expect any let up in demand for IT talent as hybrid working practices look set to be a firm part of our future.”

Photo courtesy of Canva.com

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Tech workers becoming more demanding

Businesses looking to engage tech contractors may need to rethink their pay rates and conditions, according to new research by Hays Technology.

A survey carried out by the specialist IT recruitment agency in May polled more than 600 contractors and hirers and was used to put together its UK Contractor Day Rate Guide 2021.

The research revealed that demand for technology expertise is increasing, but that skills shortages are hindering many firms’ efforts to hire talent. It reported a 21% increase in demand for IT contractors and a 17% increase in placements from H1 to H2.

Of the organisations polled, 42% said they did not have the required talent to achieve their current business objectives and more than 8 in 10 reported they had found it difficult to recruit contractors over the last year.

This supply and demand mismatch has led to day rate increases for many contractors, with some  project and change managers achieving increases of more than 10%. Overall, data gathered by Hays offices across the UK showed that technology day rates had increased by 0.8% over the last 12 months. Software developers had seen an average day rate rise of 2.4%.

James Hallahan, Director of Hays Technology in UK & Ireland, said: “Skills shortages abound in the technology sector and there are plentiful opportunities for tech contractors to be deployed within organisations that can’t find enough permanent employees with the right skills. Contractors with the most sought-after technical and soft skills, and those with a proven track record for successfully managing projects and leading change are going to expect assignments that deliver on flexibility and terms.”

Beyond pay

However, the Hays research also found that contractors wanted more than just pay increases: the majority now also wanted to be able to work remotely.

Many were already working from home for some of the time and more than half said their work-life balance had improved since March 2020, with almost three-quarters reporting that being able to work remotely was important to them.

Almost half (46%) now want greater flexibility with regard to hours and two in 10 said they wanted to change the expectation for them to work outside of their contracted hours to enhance their work-life balance.

The thorny issue of the IR35 reforms that were introduced in April remains a sticking point between contractors and hirers, found Hays.

“Most contractors want to stay outside of PAYE, presenting a potential shortage for organisations seeking to secure their skills. So, while the increase in activity means there is great demand for tech contractors, organisations are having a difficult time engaging with them. They may need to take an assignment-by-assignment view in order to attract the right skills and work with a recruitment specialist to help them secure the best talent,” said Hallahan.

Photo courtesy of Canva.com

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