We’ve become quite familiar with change in the past few months, not least because of the new government, but across the IT industry as a whole. It’s a word on everybody’s lips.
With spending cuts looming and an IT skills gap a likely outcome, many will use the government as a scapegoat for the industry’s problems. But in truth, a reduction in IT public spending has been on the cards for a long time.
The wind of change
The impact of the government’s agenda will undoubtedly result in a very cost conscious society. Considering the US focus of the IT industry, a market decline does not favour a UK company buying in dollars.
The relative strength of the dollar will undoubtedly lead to a restriction in US spending, forcing many companies to fall back on ‘fit for purpose’ equipment, instead of embracing high-end technologies that fuel competitive advantage. As a result, Gartner, for example, has significantly downgraded IT spending growth predictions delivered at the start of 2010.
Unfortunately the same could be said for consultancy services, particularly those specialising in business change. While many companies will see them as a guaranteed road to recovery, others will view these opportunities as unnecessary and discretionary expenditure.
What is true is that where companies choose consultancy services, they will be under considerable pressure to get the best bang for their buck. So where does this leave the industry?
Survival of the fittest
It’s a classic case of survival of the fittest. Those companies that react and adapt to the situation stand a better chance of coming through it.
The determined belief of some IT organisations that ‘it won’t affect them’ is a laughable attitude, especially when the public sector accounts for 43% of the total UK IT spend.
In truth, it will affect us all, from large corporates right down to smaller resellers. The key is tracking the spending that’s taking place. This could mean a reduction in training activities, but I’d be surprised if organisations cut it out altogether.
Instead, we may see a shift to more cost- effective training methods - with a focus on educating employees, both for business benefit and staff retention.
Although costly, it’s money well spent. Training will ensure that staff have the necessary skills to do their jobs and maintain customer satisfaction, while providing them with an advanced skill set to aid staff retention.
In the IT industry, a lack of skilled graduates and vacancies means there’s an increasing reliance on the older, more experienced workforce. This could lead to organisations looking inward for experts to train and shape the skill sets of younger employees.
Not only does this give companies an excuse to limit spending with third party providers, but it enables them to continue building a skilled workforce. However, this does pose a dilemma in the form of long term business benefits. Long-standing employees undoubtedly know the tricks of the trade, but they’re not trainers by nature.
They lack the ability to provide flexible training methods to suit different skills and personalities, meaning companies sacrifice on quality. With this in mind, we may see a push towards a more collaborative approach, combining intense external training sessions with internal training activities.
It goes without saying that the success of any approach is down to an individual company and their values.
Investing in time and money are two very different things. While internal training is damaging in terms of time resources, it clearly offers huge financial benefits that companies must weigh up.
What lies ahead?
A downturn always has a knock-on effect on training. It leaves staff reconsidering their roles and careers, just as organisations consider who they need and who they don’t.
With the skills gap and election prompting a cut in public spending, it has never been more important to ensure the more experienced and qualified workers hone their skills.
As a result, I believe the provision of internal activities to supplement instructor-led training will become a recurring theme over the next year.
On top of this, companies will need to prove where training and development investment is most needed. There’s no escaping the fact that cost savings and efficiencies will shape the future. It’s up to us as an industry to prove the value and return on investment of what we do.
Allan Pettman is UK MD of training company Global Knowledge