The UK could soon find itself facing a major IT skills shortage in key areas like project management as the public sector and the banking industry fight for scarce talent.
IT contractor specialist giant group says UK banks will be spending hundreds of millions of pounds on developing IT systems this year that meet Basel II capital risk-management requirements.
At the same time, the government’s requirement that all local and central government services should be available electronically by the end of 2005 will lead to a £1.5bn spending bonanza as the public sector rushes to meet the deadline.
The increased IT spending by banks is likely to translate into a surge in demand for IT staff at a time when unemployment among IT contractors is just 2.8 per cent.
But with banks unable to satisfy their IT staffing requirements from a pool of surplus labour, they may be forced to recruit from other sectors – a situation in which the public sector is likely to lose out.
Giant's Matthew Brown said: "The UK banking industry is ramping up for its biggest IT investment programme since the late 90s. The public sector will need all hands to the pump if its to meet its very specific e-government deadlines."
"There are very few IT professionals out of work at the moment. Any organisation looking to recruit more staff is going to have to do some determined headhunting - something at which banks traditionally excel."
Research by giant showed that the financial services sector recently regained its status at the biggest employer of IT contractors, knocking the public sector off the top spot.
According to giant’s research, 21.2 per cent of IT contractors (19.9 per cent six months ago) now work in financial services compared to 20.5 per cent in the public sector (20.5 per cent six months ago).
Matthew Brown believes the public sector may be the most obvious place for banks to recruit IT staff from, particularly project managers.
He says: "Pay has risen dramatically for public sector IT staff over the past year but remuneration rates are still well below what banks can offer."
According to giant, many senior IT staff migrated to the public sector after the dotcom crash. Persuading them to return to the City could be fairly straightforward as the business culture would not be entirely new to them.
Mathew Brown says: "If banks do start offering big money it’s hard to see the Government responding in kind.
"E-government projects tend to be heavily reliant on a number of key individuals who, if poached, could be very hard to replace."