IDC White Paper ESkills

8/4/2019 IDC White Paper ESkills

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M E T H O D O L O G Y

This white paper presents the results of a special IDC study commissioned by

Microsoft on the demand for information and communication technology (ICT) user

skills in European organisations. The main objective of the study was to establish theextent to which organisations believe that employees that are NOT considered IT

professionals or part of any IT department need to have ICT or e-business skills. The

study has relied on the definitions put forward by the European e-Skills Forum (2004)

established by the European Commission:

ICT user skills: The capabilities required for effective application of ICT systems

and devices by the individual. ICT users apply systems as tools in support of

their own work, which is, in most cases, not ICT. User skills cover the use of

common generic software tools and the use of specialised tools supporting

business functions within industries other than the ICT industry.

e-Business skills: The capabilities needed to exploit opportunities provided byICT, notably the Internet, to ensure more efficient and effective performance of

different types of organisations, explore possibilities for new ways of conducting

business and organisational processes and establish new businesses.

For the purpose of obtaining more granular information on the types of skills that are

in demand now and will be in demand in the future, IDC defined the following

subsections of ICT user skills:

Skills to use technology-based devices, such as handheld devices for stock

taking, cash registers or other devices used in your organisation

Basic ICT skills (email, word processor and spread sheets)

Advanced ICT skills (use of common generic software tools and specialised tools

supporting business functions, such as accounting, sales and marketing, or

production applications)

This study draws on results of a large-scale user survey conducted in November

2006 in 10 European countries:

Czech Republic, Estonia, France, Germany, Italy, Poland, Portugal, Romania,

Sweden and the UK

More than 600 telephone interviews were conducted with HR managers, line-of-

business managers, CEOs, CFOs and others involved in hiring new employees and

determining the skills that they need.


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S I T U A T I O N O V E R V I E W

I n v e s t m e n t s P a i d O f f : E u r o p e a n W o r k f o r c e

H a s G o o d B a s i c I C T S k i l l s

Investments made in the last decade have led to a European workforce with a good

level of basic ICT skills. Inclusion measures have built the baseline for

competitiveness at the bottom of the pyramid.

Basic ICT skills, such as use of email and basic word processing and spreadsheet

applications, have over the last few years become part of a standard set of skills for

the majority of participants in the job market. Indeed, results from our survey suggest

that more than two-thirds (70%) of respondents believe the great majority (>60%) of

current employees have the basic ICT skills necessary for email communication and

use of basic office applications such as word processing and spreadsheets.

Several reasons have contributed to the relatively high level of basic ICT skills

attained by current employees and candidates. Firstly, the proliferation of computer

use in private businesses and public institutions, particularly in certain vertical

industries such as finance and in functional areas such as back-office administration,

has reached almost full penetration. Consequently, use of ICT has become a main

component of our daily business lives, a necessary skill needed in the job market.

Secondly, the penetration of PCs in the home due to rapidly falling prices has made

the device a commodity and people that do not possess even the most basic skills

increasingly a rarity. Added to this has been the strong penetration of mobile phones

and the expanded functionalities of these beyond simply making and receiving voice

calls, such as text messaging, browsing the Internet and taking photos. These

devices are being absorbed into our everyday lives and with it have come the skills tooperate them. Last, and not least, public policies pursued at both pan-European and

national levels, such as the Information Society push with the eEurope Action Plan,

the Lisbon Agenda targets and EU efforts to promote a long-term e-skills agenda

have elevated ICT onto a strategic platform through the recognition of its importance

in the quest for improvement of Europe's competitiveness. All of the above elements

have helped to create a firm basic ICT skill level in the European workforce, at least in

the race for entry-level jobs.

However, our survey shows that European workers still have to bridge a gap between

the expectations of and requirements for ICT skills of their respective employers and

their own actual capabilities. For instance, a majority of the currently employed

workforce does not have adequate e-business skills that would empower them to

leverage opportunities provided by the Internet. Relatively large differences exist

among European countries here, with less than a third of employers believing that

their staff have adequate skills in the Czech Republic, France and Portugal,

compared to almost half in Sweden, as shown in Figure 1.


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I s E d u c a t i o n S y s t e m E q u i p p i n g P e o p l e W i t h

N e c e s s a r y I C T S k i l l s ?

The study shows that European employers do not believe that the education system

performs particularly well in equipping future participants in the job market with the

ICT skills that will be required. However, it is clear that the gaps are perceived to be

larger in the part of the workforce that performs manual work (and generally have

lower education levels) than for people in white-collar occupations (with generally

higher education levels), as shown in Figure 2.

This result, whether it is a perception held by European employers or reality, sends a

signal to government bodies in Europe that more emphasis may be needed to ensure

that the workforce has the ICT skills required in the future. This focus on e-inclusion,

particularly among blue-collar workers, will increase as ICT skills become ever more

important for traditional sectors, as shown below. Ultimately, a large gap in ICT usage

skills could have a negative impact on Europe's competitiveness and ability to

innovate.

F I G U R E 2

A b i l i t y o f E d u c a t i o n S y s t em t o P r o v i d e E m p l o y e e s W i t h

N e c e s s a r y I CT S k i l l s

Q: In your opinion, on a scale from 1 to 5 (where 1 is not at all and 5 is definitely yes) do you believe that the current

education system prepares future applicants to have the ICT user skills needed for the following professions?

2.93

2.74

3.27

3.13

3.18

1 2 3 4 5

Service sector employees

Manual workers (blue-collar) employee

IT professionals and developers

Business professionals

Information workers

(Mean)

Note: N = 611

Source: IDC, 2006


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F U T U R E O U T L O O K

I C T U s e r S k i l l s a r e E n t r y T i c k e t t o J o b

M a r k e t

That ICT skills are the entry ticket to the job market was a significant message from

the survey. There is a universal belief that ICT skills are a prerequisite to succeeding

at work, regardless of country, type of industry or function held in the organisation.

Overall, 40% of respondents interviewed said that a person without basic ICT skills

would likely not be considered for a job (Figures 3 and 4). Depending on the position,

this can increase to as much as 66% of respondents. Respondents from the "old" EU

countries in Western Europe as well as from the more recent accession countries in

Central and Eastern Europe do not differ here, nor are there significant differences

among representatives of various industries such as finance, manufacturing or public

sector in respect to the importance of having ICT skills in the future.

In the current work environment, ICT skills are seen as key to be able to perform the job and those without ICT skills, particularly basic ICT skills, are severely

hampered when competing in the job market. There is a broadly held view, in fact, by

the majority of those involved in the hiring process that a lack of ICT user skills would

either disqualify or impair (at various degrees) a candidate for a position. Not even a

candidate's practical experience would significantly improve his/her chances of

getting the job without ICT skills. However, school leavers/graduates are even more

vulnerable in hiring situations if they do not have ICT skills than are experienced

employees, particularly since the largest gap between employers' expectations of ICT

skill levels and actual ICT skill levels is among this group.

F I G U R E 3

I m p a c t o f I CT S k i l l s o n C a nd i d a t e s ' E m p l o ym en t ( S c hoo l

L e a v e r s /G r a d ua t e s )

Q: When hiring new employees, could you tell me to what extent a potential employee's lack of ICT user skills would impact

his/her candidacy for a position with your company? Is this different whether you are hiring school leavers/graduates for entry-

level positions or whether you are hiring functional experienced employees?

Depends on the

position (25.9%)

Candidacy will be

disqualified

(10.0%)

Candidacy will

probably be

impaired (30.1%)

Candidacy will be

minimally

impacted (22.1%)

Candidacy will not

be impacted at all

(12.0%)

Note: N = 611Source: IDC, 2006


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F I G U R E 4

I m p a c t o f I CT S k i l l s o n C a nd i d a t e s ' E m p l o ym en t ( F un c t i o n a l l y

E x p e r i e n c ed )

Q: When hiring new employees, could you tell me to what extent a potential employee's lack of ICT user skills would impact

his/her candidacy for a position with your company? Is this different whether you are hiring school leavers/graduates for entry-

level positions or whether you are hiring functional experienced employees?

Depends on the

position (25.2%)

Candidacy will be

disqualified (9.8%)

Candidacy will

probably be

impaired (25.5%)

Candidacy will beminimally

impacted (21.6%)

Candidacy will not

be impacted at all

(17.8%)

Note: N = 611

Source: IDC, 2006

D e m a n d W i l l C o n t i n u e t o G r o w f o r I C T U s e r

S k i l l s

Future demand for ICT skills goes beyond just basic skills to advanced and e-

business skills and will continue to grow as a majority of staff is expected to possess

ICT skills. Even though the importance of ICT user skills is deemed quite high now, it

will further increase. Results of the study suggest that in the future having just basic

ICT skills may no longer be enough for a large part of the workforce. Case in point is

a finding that 39% of respondents indicated a need for people with specialised skills

that are pertinent to their industry and particularly in industries such as wholesale,

utilities and telecommunications, as shown in Figure 5. The need for specialists was

most acute in countries such as the UK, Germany and France, but also in Portugal

and Romania.


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F I G U R E 5

F u t u r e N eed f o r I CT S k i l l s

Q: Could you indicate if you currently need more people with these skills?

79%

82%

81%

68%

61%

66%

21%

18%

19%

32%

39%

34%

0% 20% 40% 60% 80% 100%

Use of standard

office applications

Use of email

Use of the Internet

Use of our back-

office packages

Use of applications

specialised for our

industry

Use of technology-

based devices

We have enough

We need more people

Note: N = 611

Source: IDC, 2006

At the same time, a third of employers need more people that can use technology-

based devices, often applied to update and modernise manual processes, for

example, stock taking, meter reading etc. The demand for these skills is particularlystrong in industries such as wholesale, retail and utilities.

Almost a third of employers are also looking for more people that can use back-office

applications. It is clear that the impact that ICT has had on how European

organisations are running business processes continues to increase. As indicated

earlier, having basic ICT skills is no longer enough for many of Europe's workers. The

Internet created a paradigm shift that changed the way we conduct business and this

is reflected in the requirements for current and future employees.


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O r g a n i s a t i o n s T i e F u t u r e S u c c e s s t o

E m p l o y e e s ' I C T U s e r S k i l l s

European employers are making a very clear connection between the success of their

organisations in the future and the level of ICT user skills of employees. Three-

quarters of organisations believe that ICT user skills among their employees will be

crucial for their future in terms of competitiveness, innovation and growth (Figure 6).

Added to this, in relation to our comments above, a third of respondents believe that

ICT skill levels will be an important factor in how the organisation is run in terms of

how business processes can change as a result of ICT use.

F I G U R E 6

I m p a c t o f I CT S k i l l L e v e l s o n t h e O r g a n i s a t i o n ' s D e v e l o p m en t

Q: In the coming years do you believe that your employees' levels of ICT or e-business skills will impact yourorganisation's growth plans or other strategic decisions made at the executive level? (Multiple answers)

18%

19%

24%

27%

33%

33%

0% 5% 10% 15% 20% 25% 30% 35%

Will influence whether we outsource certain functions of

our company or not

Will ess entially decide the competitiveness of our

company

Will impact our plans for innovation

Will have little or no im pact on the decision-making

process at all

Will be a factor that will influence our decisions on

business process changes

Will play a large, significant role in the future of our

company

Note: N = 611

Source: IDC, 2006


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But T ime and Money M ay Get in Way of Success

Having said this, it is clear that organisations may well believe that their future is

tightly linked with the ICT skill levels of their employees however, they are not

making the investments in the skills that should be a necessary consequence of this

view. In fact, 60% of respondents claim that lack of time for training is getting in theway of ensuring that employees have the required ICT skills. While having high levels

of ICT skills may help the organisation to innovate, change business processes and

promote innovation that could potentially create more time for training through

efficiencies, organisations seem to be caught in a catch-22 situation. Almost 60% of

respondents say they rely on on-the-job training for development of ICT skills, which

can often be translated to mean "individual employees will pick up the skills they need

when they need them," rather than formalised training programs. Indeed, only 2% of

respondents say they take advantage of more flexible training delivery methods such

as e-learning to help address the issue.

This is a critical situation and one that indicates that European organisations may be

held back in the future by a lack of ICT skills outside the basic skills already

available. In IDC's opinion, a collaboration between European employers,

government bodies, the education system and the ICT industry itself may be needed

to overcome this potential obstacle to innovation and competitiveness in Europe.

I C T U s e r S k i l l s W i l l P l a y P a r t i n A d v a n c i n g

T r a d i t i o n a l I n d u s t r i e s

The need for and importance of ICT skills is deeply felt in traditional industries such

as agriculture and transportation as a way to modernise their processes and become

more competitive (see Figure 7). This is in direct recognition of the empirical evidence

that ICT contributes to increased productivity and ultimately to economic growth.

This perceived importance of ICT has been described and evidenced, particularly in

ICT-intensive industries such as telecommunication, ICT-producing sectors and

business services, as a factor directly contributing to productivity gains and GDP

growth. Deployment of ICT, however, is only one piece of the puzzle and would not

have any real impact without a labour force that is skilled to use the technologies and

take advantage of the possibilities represented.

Over the years, less intensive industries in terms of IT use (such as agriculture,

construction, transportation, retail and wholesale) have been increasing capital

investments in ICT technologies, partially as a mean to compensate for loss of labour

force, which has been particularly dramatic in the EU accession countries. This

increase in technological investments, however, needs to be matched by ICT

knowledge and skills of workers employed in these industries. The challenge faced by

these industries is twofold. To start with, traditional industries have historically found it

difficult to attract and recruit technologically minded candidates. Furthermore, the

complexity of ICT in these industries is strongly increasing, leading to requirements

for a broad variety of ICT skills that is similar to that in the ICT-mature industries such

as banking. For example, today's modern farmer needs not only basic ICT skills but

also has to understand back-office applications such as accounting software and be

familiar with GPS and other technology-based devices, while being able to use the

Internet is almost taken for granted.


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F I G U R E 7

I m p o r t a n c e o f I CT S k i l l s f o r T r a d i t i o n a l I n d u s t r i e s

Q: Within your organisation, do you expect ICT skills to become more important, less important or their

relevance will not change over the next 12 to 36 months? (Respondents answering "more important")

58%

69%

64%

29%

62%

69%

67%

57%

58%

65%

35%

61%

65%

62%

0% 10% 20% 30% 40% 50% 60% 70% 80%

Average

Transport

Retail

Utilities

Government, education, healthcare

Wholesale

Agriculture, construction or mining

12 months

24 months

Note: N = 611

Source: IDC, 2006


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C O N C L U S I O N

This white paper illustrates the following:

It is already clear that ICT skills are an important entry ticket to the job market and crucial for people that want to move into better positions. This applies to both

blue- and white-collar positions. This situation will only become more

pronounced, as ICT skill levels increase in value in the future, particularly e-

business and industry-specific ICT skills.

The survey clearly shows that organisations across the board believe ICT skills

are critical elements for their future development. Three out of four respondents

believe that their employees' ICT user skill levels will influence the organisation's

competitiveness, its ability to innovate and its growth. However, time and money

are perceived to be in the way of making these critical investments into

employees' ICT skills.

This is a critical situation and one that indicates that European organisations may

be held back by a lack of ICT skills outside the basic skills already available.

According to the survey, European organisations believe that the education

system is not providing school leavers with the required ICT skills. Whether this

is a perception held by European employers or reality, sends a signal to

government bodies in Europe that more emphasis may be needed to ensure that

the workforce has the ICT skills required in the future.

Traditional industries such as agriculture, construction, transportation, wholesale

and retail are increasingly investing in ICT and are increasingly looking for

employees with ICT skills across the board. These industries also face the

challenge of attracting technologically minded candidates with a broad spectrum

of ICT skills.

Overall, the survey reveals that there are no major differences among EU

countries, though some regional and especially country-specific differences do

exist. No clear divide exists between east and west or between the new

accession EU members and the traditional Western European countries as

examples show that leaders and laggards come from both sides of the line:

The proportion of employees using computers and technology-based

devices was highest in Estonia, Sweden and Germany and respondents

in these countries were also firm believers in the importance of ICT skills. On

the opposite side of the spectrum were France and the Czech Republic,

where lower proportions of employees used computers and respondents

were less assertive about the importance of ICT skills.

The European workforce shows a good level of basic ICT skills across all

countries in general, with Poland topping the list and the UK and France

being at the tail end of this ranking.

Larger differences exist in e-business skill levels, with Sweden and Italy

having the most skilled labour force, with the Czech Republic and France

trailing.


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In summary, the study clearly shows a labour market where ICT user skills will

increasingly be demanded, almost without regard to the job function. So far, the

European workforce has generally been able to live up to employers' expectations.

However, the increasing requirements for more sophisticated skills such as e-

business skills and the use of industry-specific applications (including technology-

based devices) may not be met so easily.

Organisations clearly do not perceive that the education systems in the different

countries are supplying all the necessary skills and they also claim not to have the

time or money to provide their existing employees with the necessary training. This

signals a serious gap in the future and one that is even more severe as European

organisations are clearly banking their success on these skills being available in the

workforce. In IDC's opinion, a collaboration based on a long-term shared agenda

between European employers, government bodies, the education system and the ICT

industry itself may be needed to overcome this potential obstacle to innovation and

competitiveness in Europe.

Andr Richier, Principal Administrator, European Commission, Enterprise andIndustry Directorate General, Innovation Policy Directorate, Technology for

Innovation, ICT industries and e-Business, was consulted on the content of this white

paper.

C o p y r i g h t N o t i c e

External Publication of IDC Information and Data Any IDC information that is to be

used in advertising, press releases, or promotional materials requires prior written

approval from the appropriate IDC Vice President or Country Manager. A draft of the

proposed document should accompany any such request. IDC reserves the right to

deny approval of external usage for any reason.

For further information regarding this document please contact:

Marketing Department

Tel: +44 (0) 20 8987 7100

Copyright 2007 IDC. Reproduction without written permission is completely forbidden.


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