SBA

IT Matters 101

Last year I promised myself I would stop writing IT Matters when I had written one hundred of these articles. I’ve been wittering on fortnightly for the past four years and the Examiner has been kind enough to give me a page to myself - which I have filled for them free of charge - but why?

I personally believe that the Manx business community needs to become better at understanding and exploiting information technology, in order to offer more competitive and more diverse services and products to customers on and off island (and the same applies to our Government). The purpose of this column has been always to attempt to stimulate business and government leaders and senior managers into thinking a little bit more, a little bit harder, about the role that information technology plays in business and society - because IT has changed the world, and will continue to change the world, and those who have been at the forefront of understanding and exploiting that change have profited at the expense of those who have lagged behind. 

On one level information technology has immensely benefited most of us through its enablement of complex data analysis and the global dissemination of information which improves human welfare. On another level IT is little more than a corporate and national arms race, and the winners profit immensely whilst the also-rans have to run ever faster just to stand still.

There is however nothing mystical about information technology, it is simply intricate mechanisms put together by clever humans - and the more clever the humans who are deployed to create and engineer IT systems the more benefits those IT systems deliver for “us” - corporately, nationally or globally. Almost any business, government, or nation can exploit IT better, by thinking harder about how it can benefit from IT and by attracting better IT talent to build more useful and productive IT systems. 

So, this article is IT Matters issue 98, I am rapidly approaching issue 100 - who will write IT Matters 101? Will there be an IT Matters 101? Or will this column stagnate? I’ve been scouting around for talent to take over from me, but unfortunately to date I’ve drawn a blank. The obvious candidates on the island to succeed me in authoring this page are too busy doing other things, we have a talent shortage in folks who can witter on about IT in business. Maybe working for free is not sufficiently attractive!

If you think you can take over from me then please get in touch - either with me or with Duncan Foulkes who edits the Business News section. We would love to see someone step forward to keep IT Matters going. A fresh start, back to basics, IT Matters 101.

In a recent statement to Tynwald our Education Minister, Graham Cregeen, explained to members that one of the challenges faced by his department in obtaining IT teachers is the salary expectations of IT professionals, saying “when you are looking at salaries in some IT industries they are well in excess of £50,000 per year”. IT talent is obviously expensive, reflecting the intellect, versatility and scarcity of, and demand for, those people who can build more useful and productive IT systems.

Perhaps the cost of IT talent is not so surprising - the impact of a good (or poor) IT professional is multiplied across all of the staff and transactions of the enterprise, it usually pays to hire the best. Coming back to Mr. Cregeen’s statement, I personally remember conducting the annual appraisal of one of my team, a programmer (let’s call him Eric), in 1993 when I was a manager in the UK development centre of a large American technology corporation - and apologising that I could not increase his salary beyond £50,000 unless he agreed to be “promoted” into a management role. He was at the top-end of the corporate pay scale for a programmer, and had been for several years, and was worth every penny of it.  £50,000 today doesn’t seem extravagant for a decent programmer in the context of £50,000 in 1993, although I’m sure many employers would not agree. 

Of course Eric was top-end talent, the average UK programmer in 1993 was earning nearer to £20,000 than £50,000, but talent is expensive. Today the average UK salary advertised for programmers is, according to Computer Weekly, apparently c. £52,500 - which looks OK until you consider that the average today in the USA is more like £85,000 ($115,000) - and of course top-end talent like Eric gets paid significantly more than double whether one is considering the UK or the USA. 

Programmers, due to the intellectual nature and complexity of their work, usually get paid substantially more than the IT technicians who maintain your PCs and networks, but substantially less than the  architects, managers and directors who design and build the big picture of corporate IT and are responsible for keeping it all going. Programmers generally occupy the middle ground of the IT profession and its salary scales.

The reality is that the UK, France, Germany and other rich European countries all claim to have a major shortage of IT talent - and none of them feature in the top five countries for IT remuneration. The USA, Switzerland, Norway, Denmark and Israel all pay substantially more than the UK, France or Germany for their IT professionals - and substantially more than the average national salary across a basket of professions. One survey I read recently had the UK as the only major country where the average IT remuneration is below the average of professional remuneration, a surprising result which seems to be backed up by the 2017 UK Office of National Statistics salary survey which shows the IT disciplines performing poorly in comparison with other professional disciplines requiring similar levels of talent for which shortages are fewer.

No individual salary survey is authoritative, the way that job types are categorised and the inclusion or exclusion of different aspects of remuneration and reward mean that accurate like for like comparisons are difficult, but across a basket of surveys from different countries the trend is the same - the major EU states including the UK, which are claiming a significant shortage of IT professionals, are undervaluing IT professionals in comparison with the global leaders. It’s reasonable to infer that the Isle of Man is likely to be in the same position - IT talent is in demand globally.

The tech talent shortage is a problem for us on the island, whether it is me trying to find some mug willing to take over writing this column, or Derivco, Utmost Wealth or Government trying to hire IT folk. Our problem is exacerbated by our small scale.

As I mentioned above, the effectiveness of an IT professional is multiplied by the scale of the enterprise, and the enterprises in the UK and other locales from which we recruit are generally larger than here on the island - some UK companies employ more people than the entire population of Mann. It is therefore difficult for the majority of our local employers to justify top-end IT salaries when they have fewer employees, customers and transactions over which to amortise the IT cost, but without some top-end talent we can’t compete - and for many IT jobs the complexity of the job is the same whether its benefits are rolled out across fifty employees or five thousand. 

Which brings me to the picture. I don’t know who the employer is, but I’ve read the job spec posted for this “Head of Information Security” role and it is comprehensive. It is what one would expect to see in the job specification for this type of job done properly. The only problem with it is on the right-hand side of the image, where the caption “Other jobs like this” reveals that for basically similar roles in the UK, presumably in larger organisations, the equivalent salary is between double and treble what we’re offering. That’s not to knock in any way the employer seeking a Head of Information Security on the island, it’s simply a reflection that the smaller scale of our local enterprises tends to be a challenge in competing with the UK for IT talent, even though it is already established that the UK itself is is a poor payer of IT professionals compared with some other countries.

We’re not helped in our quest for IT talent by our membership of the Common Travel Area, because whilst it is easy for residents of the UK and Ireland, and consequently the EU / EEA, to move to the island, we need to apply similar rules to the UK in permitting non-Europeans to move here, which is a significant inhibitor to the immigration of IT talent from Asia and India - where IT salaries are lower than in Europe (but much, much higher than the average salaries in those regions). 

I don’t know what the big picture answer is to our IT talent problem, but I strongly suspect the major factors have to be higher rewards to attract more immigrant talent combined with more and better ICT education on-island to help grow our own.