UK 'heading towards digital skills shortage disaster'
bbc.co.uk
bbc.co.uk
I started contracting on £x per day, a year ago they put me In-Scope of IR35 and my day rate went down by 13% due to a cost natural approach by the client. I then have to pay tax on that.
Before I didn't pay myself the whole amount as I wanted to save money in the company for a rainy day!
I am now thinking about moving to the UAE
I know someone who did that around 05, it was very effective. Eventually he grew it to around 10 people, all of whom could be farmed out for contracts when the company itself wasn't quite cutting it.
Perhaps a model of contractors collecting together in small groups to carry on, will work.
I've seen this happen a bit in the US, especially in the Rails consulting space. I think having loosely formed "agencies" made up of complementary partners where the sales pipeline goes through the agency is definitely a potential way forward, but seems uncommon in the UK so far. The downside is independent contractors with poor networking skills might struggle to find people to collaborate with.
As with many ideas like this, we kinda lost interest and moved on to other things. It's possible there's a gap in the market.
I honestly don't know how to solve it absent massive Government action, and while I generally applaud it, its unlikely to be effective / sustainable.
Maybe a big trades union resurgence. Possibly a truly massive increase in the number of small (not individual) service firms.
It has always seemed absurd to me that the returns on productive assets are taxed lower than the returns of the sweat of your brow.
...and at the same time also arguing that the skills shortage is because big companies are offshoring jobs overseas to reduce their high salaries?
Mind you, the rest of Europe pays even less, but now UK is less attractive for an European to move in.
If you're not getting paid enough, you're more likely to leave.
If companies aren't hiring as many people locally, you're also more likely to want to go and find work elsewhere.
Where to? Only America pays more, assuming you can get a visa, and while UAE taxes less the lifestyle there has fairly limited appeal.
This kind of offshoring works for both sides because they are offshoring to a location where the supplier (developer, etc) ends up better off (they lose less money to tax for example) and thus still provide quality work.
Overall, in this case, everyone wins, except the greedy & short-sighted UK government, which I can't really sympathize with.
My 140 characters version is Salary stagnation and outsourcing is still the problem
>The problem is that salaries in the UK are not attractive as you quickly get on the higher tax bracket. This was made worse when changes to IR35 passed and now if someone works on a b2b basis is likely going to be caught by new rules and it means no more business expenses, having to pay employer's NI, apprenticeship levy etc. and no employment rights.
I was directly affected by this and I'm looking to leave as soon as possible.
US, Canada, Australia. All have higher salaries for software people, though not all as good as London finance contracting has been.
I earn around the same level you do and am leaving for Australia sometime in the next few months. I don't expect to make anything close to my current contracting income, though I do plan to start a consulting company over there at some point.
However, both CA and AU have other benefits. While pay is lower, the standard of living in my view is much higher and are much safer. For those two reason I think they might be a good choice, but not pay. Correct me if I am wrong, as I am still considering a decent alternative to the UK - preferably somewhere safer and with better quality services.
Comparing to London contractor money, sure it'll be less and I'm preparing for that, but compared to most salaried work. Look at the averages - Average software engineering salary in Canada $102,866. That average in the UK? £31K. Just over half the Canadian figure.
(I'd allow that the average figure in the UK does not paint an accurate picture because a lot of the higher skilled people opt out of employment to go it alone, like ourselves)
I very much agree on the standard of living aspect, having had direct experience of life in Australia. There's just more space, and more respect for public facilities etc.
> I've worked in Australia, and compared to the pay of most salaried programmers in the UK, the money on offer was much better. Hell, doing the same damn job for a big corporate over there as I had done in London (same team and everything) netted me a 60% payrise.
New data points are always welcome - I might have to read more on the topic as I am clearly missing some data in regards to AU (my peers told me otherwise, maybe they do something wrong).
I don't think I know anyone in our sector that's currently salaried so I can't say I have many personal datapoints there. However I do think that outside of London the UK pays salaried software folks pretty badly.
> I do know however that people who earned a lot...
Maybe there's less variance and less room at the top end in CA and AU? That could explain our conflicting views.
My last experience over there was not as a "senior", though I had a few years experience I wasn't at the top of my game compared to today.
> Others tell me they are simply increasing their daily rate to cover for IR35
"Inside IR35" contracts are bad for a variety of reasons, such as the extra control the client has over you as well as the requirement to use an umbrella company (technically it's not required - you can very well deduct & pay the relevant taxes on your side, but given the liability shift, clients are unlikely to agree).
It’s not US salaries but £120K after tax a year would put on on the property ladder even in central London rather quickly.
>although I am not inside IR35
That's what I meant though, this is going to end soon. There will be no "outside IR35". One of the more foolish decisions of the UK state recently (and they're not lacking in that department).
If the end client decides it is so (and assumes liability), you can still be outside. If the end client is a "small business" then there is no change*.
The best thing I can think of for those who want to continue to operate as an independent business is to actually become more business-like. Start a consultancy with a couple of like-minded individuals, based on your skills. Let clients and agents know you are available to deliver work on a fixed-cost basis, not join a project on a day rate.
But I agree, the whole thing is a nasty mess, and it's going to screw a lot of people.
(*though I imagine HMRC will be launching many more investigations into such small businesses. This is the bit that gets me, they leave a grey area in which you can get screwed).
But yes I agree, that is what's happened. Umbrellas must be rubbing their hands with glee.
You have to increase the rate by well over 30% and that puts you into territory of what agencies charge. Company might as well drop you and go with an agency then as they don't want to deal with IR35 as there is too many misconceptions and fines are heavy for getting it wrong.
Honestly I think the real solution to the issue is to tax gains from assets (i.e. dividends etc) higher than salaries, rather than lower, then this whole thing could go away.
https://www.independent.co.uk/news/uk/politics/jacob-rees-mo...
(I know people in that position would be dumping 40k into their pensions, etc. I'm just speaking hypothetically or for those earning, say, 180k-200k somehow.)
employers want people with high tech 'digital skills' for less pay.
The UK is infamously known for not appreciating programming skills.
India. Uber's doing very well there, lay the best engineers off and go there instead.
Who the UK government made a very deliberate effort to squeeze with the IR35 changes. Now they're shocked-pikachu-face-ing that those contractors are leaving.
This is skewed by the financial sector which out of necessity pays comparable wages to New York. The average programmer in the UK is just another office worker in terms of pay and status.
If you're not FAANG, FTSE 100 or an engineer in the finance sector, your pay is similar to an entry level office IT worker.
Outside of London, your statement is much closer to the truth. Lots of employers in Manchester for example are there principally to avoid paying London salaries.
Honestly though, the day to day reality of programming in fintech is about the same as working in any other industry.
If you want decent money (not even NYC or Silicon Valley money which is not possible) you need to move to London at which point even 80-100k pounds (usually terminal salary for software engineers) does not give you the same savings rate or quality of life you'd get elsewhere.
The same problem can be highlighted for many expensive places in europe which is why there is such a brain drain for top talent.
Any technical skills at all really. In Italy or Germany an engineer is a respected and protected profession. In the UK an "engineer" is the person who swaps a toner cartridge or replaces a washer in a tap, the word gets used for anyone regardless of their qualifications or role, devaluing it in the public consciousness.
So much so, that in fact a software developer is definitely not seen as an engineer in Germany, which is a protected word you can only call yourself, when you actually have an engineering degree (similar to lawyer or doctor).
It also does not mean, that you can earn more over here. I am hoping that this will change due to the car manufacturers investing massively in vehicle software.
Of course we can, but noone is willing to pay for it. Then they pay for it on other ways, and act like they're surprised when once again hackers waltz in, or there's an outage that costs the business a fortune, or yet another project fails to deliver because of corners cut early on.
I live in the UK and while parent is obviously hyperbolic, it has some truth in it. Where I work, people with engineer in their job title are _literally_ the ones that come around when your computer breaks and they turn it off and on again.
Come to think about it, parent isn't even that hyperbolic...
> "We need digital literacy and common sense, not someone who can program a Raspberry Pi to control a robot," Mr Howell told the BBC.
I'm getting the impression that this is not about programming or SEs being paid SV salarys - I think it's the age old 'how do computers think? - how can I leverage them in my job?' kind of skills.
"The History of Art Grad from Prestigious University who is on Grad Scheme at $BIG_BANK fails to grasp that instead of emailing 100 people individually and copy pasting responses into a spread sheet, he/she could just use Google Forms or something", so, more fundamental skills.
Our hypothetical humanities graduate here didn't explicitly study this as a degree, and shouldn't have to, any more than they didn't need a degree in maths to count.
Not sure what the basis is for this. I'm a SWE with 10 years experience and I've been shopping around for countries to escape to for more than a year, I didn't really want to consider the US but currently my options based on salary expectations are only the major US cities.
Nowhere in the world that I've seen offers comparable rates to London/NYC/Bay area. You could include the rest of the UK in the statement I quoted, but then you'd have to also include the rest of every other country. I doubt you'll find a competitive tech salary for a non-remote job in Arkansas or Düsseldorf.
edit: Someone else mentioned finance salaries in this thread, I haven't worked for a company anyone here would likely know and this was all true before I moved to a finance-adjacent business
Programmers are already among the highest paid professions anywhere, so it's laughable that they complain about "less pay". Who's next? hedge fund managers and investment bankers complaining about low bonuses?
According to here, software engineers are paid roughly the same as other types of engineer, and a lot more than plumbers.
There are some very low paid development related job titles. For example, "Web Developer" salaries are always awfully low - but that's a job title you only ever really see at tech-phobic companies or design agencies.
Speaking as someone who does a fair amount of hiring in London, a decent software engineer commands a high salary - around the six figure mark. I don't mean FAANG "can invert a binary tree on a whiteboard" level, just "knows what a mutex is". There really aren't many other careers in this country that you can be paid six figures in a non-management job without a degree.
The best way to get a high salary in the UK seems to be to either work in London, work remotely for a London based office, or work in London then transfer to another part of the UK.
I'm not a London native, but there's a phrase people in my home town use, "doing your London time" - meaning working in London for a few years then moving back home. Reason being that once you've worked in London, your salary is permanently much higher once you move back than it would otherwise have been.
Six figure in the UK is very different from six figures in other countries.
UK after tax came to £74,244 ($102,885), California came to $108,070.
I don't know how accurate those numbers are, but they don't seem all that different to me. And compared to the rest of Europe, UK tax is on the low side.
Of course I don't particularly _enjoy _paying high taxes, but I feel like living in London, earning within the ballpark of that amount, my life is pretty good.
FAANGs, start-ups, unicorns, fintech etc. are much higher, but the same is true in the UK. I know mid tier software engineers working in FB/Google in London clearing over £300k in total comp. I work in a fintech start-up and my TC is close to £200k.
But sure. London pure tech salaries are not the quite as high as the global tech hub. Fintech salaries are competitive with NYC though (but slightly worse after tax).
Outside of London companies are still looking for experienced software people under the £40k mark, and then wondering why they have staff retention issues, or can't attract top talent.
This is showing signs of slow change - Starling bank have a plan to open offices in other cities, starting with Southampton, and pay close-to-London money. JPMC have had that strategy in Dorset for quite a while too.
2015 being the year the IT and ICT GCSEs (which featured potentially little or no programming) begun being phased out and replaced with a more academically rigorous and programming-focused Computer Science GCSE.
Unsurprisingly, this led to a drop in the number of schools offering "IT subjects" at GCSE because it is harder to find qualified teachers for it; and any change like that is likely to depress numbers at least temporarily, and maybe permanently if the new syllabus is objectively harder.
She works at a large school and had that school not been lucky enough to have a spouse who's a developer, I'm not sure what 120+ kids (per year group) would have ended up being taught. Not all schools are so fortunate.
How can you explain something to someone if they have no knowledge about it?
It doesn't matter how smart your wife is, this is an impossible task unless you actually learn the thing.
It would be like asking someone who doesn't know calculus to create a lesson plan to teach calculus. When you put it like that it sounds pretty ridiculous.
That school is definitely lucky that you helped out, but I don't think the root issue is the source material.
It doesn’t work for programming because most people haven’t studied it tor years at school (unlike maths, literature, etc.), so can’t help solve the problems that crop up under the hood so often.
In high school, our computing textbook contained blatant errors. I tried to explain this to the teachers, but soon realised they didn't know anything about the subject at all, they were just repeating the textbook without understanding it.
(Example: our textbook falsely claimed TCP/IP used parity bits as an error detection mechanism. No, it uses ones' complement checksums. I referred to RFCs 791 and 793. The teacher had no idea what an RFC was.)
That's generally the point of an explanation: to impart knowledge to someone who didn't previously have it. :)
> It doesn't matter how smart your wife is, this is an impossible task unless you actually learn the thing.
She doesn't need to train as a software developer to teach the basics of programming languages. She just needs to understand the basic blocks she's going to teach herself. In my case, I taught her what a variable is and how strings and integers are different types of variable. Then I taught how how to right a while loop, comparisons and print to the screen. From there she was able to teach the kids to write a simple "higher or lower" computer game. This is all stuff her source material should have covered but didn't.
Universities can't train people in the lastest tech. It's not what they are for. That's the job of "Professional Formation" as we call it in Spain, and I know other countries have similar programs (Community Colleges, Trade programs?).
Now, if you want someone with deeper theorical knowledge (uni) + hands-on training, you're either looking for people who engage in programming very early (not many, you have to compete for them) or you're looking for someone who wen't through both Uni + FP which is probably way less people.
In the end, you'll have to spend money in juniors, like it or not. It's a fact of life. Which mean you'll have to hire senior developers (who can teach & mentor) and allow them to spend time and resources on this people.
This isn't new, it's what trades have been doing for thousands of years. If you have the money, don't be a lazy fuck and do it.
Such a large proportion of the population goes to university these days that they aren't really just academic institutions anymore.
Either they should be more selective, embrace their role as a more vocational institution or at the very least create courses/degrees that distinguish between academic and industry/vocational pathways.
I wonder what is the effect of having the media tell people constantly for a decade that tech companies are evil organisations trying to invade everyone's privacy and mislead everyone as much as possible. They people who work in tech companies are "tech bros" who have no morals, and only care about making money, stealing private information, or spreading damaging and false political information. They are also sexist and racist work environments.
That's the impression that a young person would get from media coverage (coverage written by the direct competitors of many of the tech companies). I'm not downplaying the problem of sexism and racism in tech companies, I just think that it gets outsized attention in the media compared to any other industry. For example, does the energy industry have a racism problem? Or the pharmaceutical industry? Yes the impression one would get from the media is that these issues are particularly bad in tech.
It's not just the traditional media that portrays tech as evil either, its also the culture more generally in shows like Silicon Valley or the Social Dilemma.
Wouldn't surprise me if little has changed.
What is lacking most of the times in university hires is common sense or a good grasp of foundational concepts. People struggle with simple data structures or naming things or how to take notes. I think some University is still good but once you are 21-22 it is much better to move into an apprenticeship program or a job. Unfortunately for young people most companies are terrible at training new personnel so that is not an easy route either. I cannot speak of bootcamps but being detached from "real business" I struggle to believe they would work.
In my experience, that's because universities don't care about teaching you critical thinking or making sure you actually understand things.
I often see people say things like "university taught me how to think". Maybe at MIT, Harvard, etc they truly do. But my experience was that they just care that you pass your tests. Having any sort of fundamental understanding or being able to think for yourself was not a requirement, which is why I dropped out.
Other cause for concern, the lack of investment in the NHS: many have a spouse who is a health worker, or they have specific medical needs.
There is no shortage of skills in markets where employers can filter people by 'culture fit'.
Nor is it particularly well respected as a skilled discipline, developers are treated just like any other office worker and tend to be paid similarly. The programmers you find in most SMEs are probably not underpaid for their skill level and productivity though, they tend to be plodders, being paid to plod. It's a vicious cycle of low pay, low expectations and low productivity.
If you want to be part of something that moves fast and pays well, you try to get into those places, or leave for another country (mostly the US, the pay in most EU countries is worse AFAICT).
There used to be the option to contract/consult on an independent basis, but the tax authorities are doing their best to entirely kill that business model right now.
Teacher friends say they see kids not knowing how to use a mouse and jabbing at the (non touch) screen instead, which is kind of what I’d expect my computer-phobe parents to do.
Knowing how to use a few apps is not digital literacy.
That said, why don't most computers have touch screens by now? For many, many users, a touch screen is a far more accessible and intuitive way of using a device. My elderly grandparents can use a touchscreen but don't have the dexterity to use a mouse.
But I'm not saying computers should go touchscreen only, just that it's probably time that a touchscreen is a standard feature on desktops and laptops. Microsoft Surface and Lenovo Yoga seem to be well liked by their users, yet there are very few desktop touchscreen monitors on the market.
A touchscreen is just another input option, and you could continue to use your mouse and keyboard if you prefer. I certainly would stick to my kb/m - even if that makes me an old fuddy-duddy.