Skill shortage in the UK: Can India provide the talent needed?
The skill shortage in the UK is costing companies £6.6 billion per year, according to a recent report from the Open University Business Barometer. That’s due to a combination of the costs of finding candidates and training underskilled employees, as well as the reduction in output and revenue due to staffing shortfalls.
With more than two-thirds of UK companies affected, it’s no surprise that more and more companies are looking for ways to plug the talent gap.
While there are several options available, offshoring is becoming the go-to solution for organisations looking to extend their teams with specialised professionals — with India as the leading choice for software engineering.
Keep reading to find out the current state of the skill shortage in the UK and how India can fill the talent gap.
What is the biggest skill shortage in the UK?
According to a June 2024 report from the British Chamber of Commerce, these are the top skills and roles UK organisations are missing:
- Engineers (mechanical, electrical, software, project).
- Sales (general, technical, digital, customer service, business development).
- Managers (general, supervisors, site, contracts).
- Marketing (general, creative, digital, social media, PR).
- Design (system design, electronics hardware designers, design engineers).
- Electricians.
- Administration (general, admin support, office staff).
- Care (health care assistants, child care, care workers/carers).
- IT Developers (computer programming, AI specialists, software developers).
The same report highlights that the number one job or skill businesses in England, Wales, and Northern Ireland are missing is categorised as engineering and IT skills.
The cause and scale of the skill shortage in the UK
Companies have struggled to find certain skills for a long time. However, recent research from the UK government pointed to three factors that have accelerated this trend at breakneck rates:
- The first is the ongoing digital revolution which is now touching every industry and resulting in an exponential increase in demand for software development skills.
- The second was the COVID pandemic lockdowns that not only turbocharged the ongoing digital transformation trend but also froze immigration and brought on the “great resignation” where a large chunk of skilled, older developers left the job market for good.
- The final factor is the ongoing reduction in net migration from the EU due to Brexit, which has increased some skills gaps.
Together, these have caused a dramatic increase in demand and a cliff-edge drop in the supply of high-value skills.
How businesses can navigate the skills gap at home and scale quickly with offshore talent
DOWNLOAD WHITEPAPERUK’s IT industry faces critical talent gaps
Skill shortages are affecting every industry, but IT has been particularly hit:
- IT has the second highest number of vacancies per 100 employees [UK Gov].
- From September to November 2024, there were 37,000 advertised vacancies in the IT and communications sector [Office of National Statistics].
- The tech talent pool was worse in 2023 than in 2022 [Statista].
While there are options, including training unskilled employees and increasing tech budgets, they take time and money: the two most costly resources a company has.
There is, however, a far more popular option for overcoming the skill shortage in the UK.
Going offshore: the go-to solution to the UK skill shortage
A 2023 report showed that 36% of IT leaders expected their use of offshore development resources to increase that year.
And it was an even greater 60% for companies with larger software development teams. It’s easy to understand why. When the other options are ‘doing nothing’ or spending more and more to bribe local talent away from competitors with bigger names and budgets, accessing areas with skills surpluses is the obvious solution.
By leveraging offshore software development, tech leaders are able to unlock talent pools beyond their borders. Instead of the UK’s limited developer community, UK companies can attract the best talent from countries where there are surpluses of software engineers.
While many offshore locations are bidding for UK companies’ attention, there’s one that stands out as the prime location for building dedicated software development teams: India.
Why India is the favourite location for dedicated software development teams
India has the hard and soft skills required for high-quality software development teams. And what’s more, it has them at a colossal scale: it’s the second country with the largest number of software developers worldwide with 5.8 million professionals.
However, Indian talent transcends the nation’s borders into platforms like GitHub, where the country has more than 17 million active developers. In GitHub’s latest Octoverse report, it is claimed that India has the highest growth in developer population and is poised to surpass the US by 2028 as the world’s largest developer community on the platform.
This growth is a direct result of India’s investment in its educational system focusing on STEM disciplines. In 2022-2023 there were an estimated 2.5 million students graduating from computer science engineering and related fields across India. Bangalore alone has over 1 million software engineers and has become the fastest-growing tech hub in the world.
So while other offshore locations have knowledgeable developers, they lack the abundance that India offers.
It’s not just about the size of the talent pool
India also has the right soft skills too.
English is an official language and is widely spoken, especially among software engineers. Plus, there are a large number of multinational corporations with offices across India. This has resulted in a spread of Western work culture and development processes as well as engineers with experience working in global teams.
When you add in the 60% lower cost of living and 88% cheaper office space, companies can get more out of their tech budgets than hiring at home. But don’t expect to slash your dev budget by 80% and see no effects. If you want to hire quality developers at speed, you should make a more modest reduction.
But there are some key challenges you need to be aware of before you opt for offshore development services in India.
Offshoring challenges in India
Going offshore is a simple solution to beating local talent shortages, but it does bring second-order challenges that you need to address to reap the benefits.
- Finding quality engineers at scale who can do what they say they can.
- Operational models where you have little to no control or visibility into your team.
- Integrating local and offshore teams despite language and culture differences.
- Mitigating security risks and protecting intellectual property.
- Managing, engaging, and supporting offshore employees so they stick around and can deliver their best work.
The solution to these challenges? You need to find the right offshore partner who will do the hard work for you.
Scale your development with an offshore partner you can trust
Unless you are a massive multinational corporation that has a ton of resources to throw at building a new offshore development hub, you’re going to need an offshore partner.
They have the operational infrastructure in place to help you scale fast as well as the local know-how to navigate regulations. By leveraging their knowledge, expertise and infrastructure, companies are able to build dedicated offshore teams in a fraction of the time so they can start reaping the benefits sooner. But not all partners are the same.
Some offshore companies operate on a low-value principle with the promise of cost savings as their main selling point.
They skip on finding employees with the right culture fit and soft skills. In some cases, they don’t properly vet for technical abilities or are unable to find sufficiently skilled engineers due to their limited budgets. You can also expect high turnover as the few quality engineers are attracted to competitors offering better compensation and work environments.
There is an alternative, high-value, long-term, and people-first approach.
Offshoring that actually works
At The Scalers, we build offshore teams so good and well-integrated, our partners don’t call them offshore.
By focusing on hiring the highest quality candidates with the right cultural fit and providing them with the best working conditions, our partners get teams that deliver value that increases over time. Our proven model starts with hiring for your company, not putting forward employees from a bench, so you get the exact skills and personalities you need.
Then, we take care of all the headaches on the ground, like getting an office and equipment, onboarding employees and ensuring they get paid on time. And once your employees start joining, your dedicated Chief Hapiness Officer (CHO) will ensure they’re happy, engaged and committed to the long haul.
And throughout the whole process, your Partner Success Manager keeps you updated with weekly chats and monthly reports and is ready to respond to any questions. So when you’re ready to scale your team, just let them know, and our turnkey process will kick into gear.
If you’re looking for a partner to build you a dedicated tech team in India, get in touch today and we’ll give you a tailored proposal based on your exact needs.
How we helped a fitness manufacturing company accelerated its delivery with an offshore team
DOWNLOAD CASE STUDYSo, can India plug the skill shortage in the UK?
India’s abundant tech talent, strong English skills, and rich IT industry make it a prime location for companies looking to fill vacancies for in-demand skills. This has made offshoring in India the go-to solution to plugging the skill shortage in the UK.
If you’re interested in knowing more about how Indian talent can support your organisation’s long-term growth, check out this article, where we analyse the reasons why Indian software developers lead the offshoring game.
