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The following model captures in a dynamic view the supply of e-Skills in Europe. While a major challenge is dealing with the imponderables of quantifying the inflow of Computer Science and other subject graduates to the labour market, the question that we deal with today is also important for the dynamics in the IT labour market: how do we estimate and calculate the supply potential coming from unemployed IT professionals and other “inflows” such as career changers who turn to IT, re-entrants who return to work, immigration of IT professionals, etc., and also “outflows” such as retirees, temporary leaves or exits from work, or possibly even emigration of IT professionals?
In a world with perfect statistics, we would think that this be a proper dynamic measurement model:
Source: e-Skills Monitor.
In the middle of the picture we have the supply of e-Skills to the labour market, consisting of IT professionals (whether statistically filed under ISCO 213/312 or others) and unemployed IT professionals looking for a job. In the dynamic perspective, people enter and leave the job market for IT skills, which is depicted by the arrows on the left and on the right side of the picture. We also have certification and re-skilling activities which may apply to incumbents as well as entrants, however, and hence must not be added as inflows of their own.
However, as we will see subsequently, data about many of the inflows and outflows is not kept track of, and hence statistics are not available.
Inflows: Supply potential coming from unemployed IT professionals
According to the most recent data sources available with data from 2008 in Germany, France and the United Kingdom it becomes apparent that the rate of unemployed IT professionals is around 4%. This varies between 2.6% (in the UK, but 3.6% in the IT industry), 3.8% in Germany and 5.2% in France.
We believe that the situation will be rather similar in the other European countries.
It will be difficult to assume what share of unemployed IT professionals will immediately find new jobs in an ICT profession especially against the background of the continuous shifts in demand for IT professionals in industry towards new and very specific skills and qualifications different to those many of the unemployed IT professionals might come up with.
Only for The Netherlands we could identify an indication on how many of the unemployed IT professionals are estimated to find a job in ICT. The ICT~Office has based their calculations on the (as they call it themselves) very optimistic assumption that 70 percent of the job seekers will find a job in ICT over the next years (Pegge, Bart: ICT labour market in perspective. In: Centraal Bureau vor de Statistiek: De digitale Economie 2008).
For Germany, we find the information that the number of newly unemployed and re-employed IT professionals have been very similar over the last five years. The number of re-employed has been only slightly above newly unemployed, resulting in a decline in the absolute number of unemployed.
For instance in December 2008 in Germany: 21.9% of all unemployed IT professionals and 24.8% of computer scientists re-entered the workforce (link). We have no data on the average duration of unemployment, but if one fifith to one fourth of unemployed IT professionals re-enters the labour market each month, the “turnover” appears to be rather high and an average duration of unemployment can be estimated between two to five months. However, we do not know what share remains unemployed for a longer time or turns to other occupations outside IT.
Since there are nearly as many newly unemployed IT professionals becoming unemployed, the net re-entrance rate is only 0.83% and 1.9% respectively. This would mean that in normal times and on aggregate level we may disregard exits to and entries from unemployment. Except that these are not normal times.
Whether this implies that the observed unemployment is frictional rather than mismatch unemployment and whether the 70% re-entry rate might be too high remains difficult to assess.
Without reliable data from other countries and sources one can only guess about the present situation in other countries and in Europe in general.
When estimating the e-Skills supply potential coming from the unemployed IT professionals we plan – unless more reliable data can be made available – to use the above (average) 4% unemployment figure and will base the calculation on the assumption that only 20% these will re-enter the labour market as an IT professional in a one-year period.
We would highly appreciate further information on the current situation on the above issues from other European countries and kindly ask the experts whether they can provide us with similar information for their own and other European countries.
Inflows: Supply potential coming from other than ‘Computer Science’ graduates
Similar to the number of IT professionals which are not originating from the occupational groups 213 or 312 (Computer professionals and Computer associate professionals) also not only graduates from ‘Computer Science’ are those with IT specialist skills. Several of the graduates from other disciplines like for instance “mathematics, engineering, manufacturing, construction” also come up with these skills or enter the labour market to be trained on IT jobs and should also be counted as IT professionals. But how many of the graduates will fall under this category?
A major problem will probably be that this share of supply varies considerably with the demand. In times of high demand, more physicists, engineers and philosophers will turn to (or be drawn to) IT, while in times of demand slump the willingness to hire “outsiders” might plummet.
How can one reliably estimate and calculate the number of graduates with IT specialist skills from disciplines other than ‘Computer Science’?
Have any of the experts reading this posting made some experiences in estimating and calculating such graduates with IT specialist skills not classified as ‘Computer Scientists’?
Inflows: Supply potential coming from career changers, re-entrants, immigration of IT professionals
Data on career changers to ICT professional jobs, re-entrants of ICT professionals after the end of the family phase, or by those having attended further education and training courses to bring them back into the labour market or for other reasons but also data on the number of IT professionals immigrating from other countries could not be identified.
For the time being we will neglect the supply potential coming from career changers, re-entrants and immigration of IT Professionals in our calculation of IT professional supply figures assuming that they will be negligible in number.
The experts are kindly asked to comment on this.
Outflows: retiring IT professionals, career changers, temporary exits and emigration of IT professionals
The actual number of IT professionals retiring, changing their career to a non-ICT job, temporarily leaving the labour market for different reasons or those emigrating can be seen as a groups of individuals leaving the labour market and therefore need to be subtracted from the IT professional supply figures. Whether or not these groups constitute relevant or substantial groups of supply side exits very much depends on their absolute number or relative share.
Data on these supply side exits is hardly available. So far only the replacement rate of IT professionals and career changers per year in The Netherlands could be identified. In 2007 it was calculated by Researchcentrum voor Onderwijs en Arbeidsmarkt (ROA) to be at 2.3% of the professional ICT population (quoted in: Pegge, Bart: ICT labour market in perspective. In: Centraal Bureau vor de Statistiek: De digitale Economie 2008; English translation, p. 191). It remains an open question, whether this figure will be at comparable levels in other European countries or differ widely and in which direction.
No data could be identified on temporary exits and the emigration of IT professionals.
For the time being we will neglect the outflow coming from retired IT professionals, career changers, temporary exits and emigration of IT professionals assuming that these will be negligible in number.
The experts are kindly asked to comment on this.
Recent research we have carried out on young women in secondary education suggests there is also an outflow following computer science graduation, particularly among young women. They are positive about IT as a topic/skill, but gender bias is putting them off taking up IT careers – this is particularly acute in the UK although the number of young women ready to take up computer science degrees is higher there than in some other EU countries. We’ll have a white paper out on this topic rather shortly.