Local demand for IT professionals has doubled over the past five years with employers seeking to hire as many as 44,000 digital professionals in the medium term, according to a recent study. However, the increasing shortage of computer scientists is set to leave many IT-reliant enterprises scrambling to meet their business objectives.
A recently published research conducted by eNET Internetkutató és Tanácsadó Kft. revealed that market demand for IT experts is set to surpass the output of the education system for years to come. eNET interviewed 3,140 companies, 2,159 IT professionals, thousands of students, and analyzed nearly 11,000 job advertisements. At the moment, there are about 9,000 vacant IT jobs and the gap between supply and demand continues to widen. Current trends suggest that in two years' time market demand for IT experts could exceed the number of IT professionals graduating from the Hungarian educational system by a staggering 26,000. As the education system seems incapable of meeting the growing demand for digital professionals in the Hungarian economy both in terms of numbers and quality, experts are calling for a comprehensive strategy that involves public education, vocational and adult education as well as motivational factors.
Number of IT degrees stagnating
Despite the apparent popularity of IT as a profession, the number of Hungarians holding an IT degree has essentially stagnated over the past 5 years, according to the study. Although the appeal of IT training programs in adult education has increased in recent years, these alone are not enough to substantially alleviate the shortage of skilled professionals. Especially in light of the fact that 72% of jobs require a higher education degree (30% of job advertisements specify the need of a master’s degree). According to the research, the various training systems (higher education, vocational training, bootcamp training) will add about 18 thousand new professionals to the labor market in the next two years. However, this is still not enough to satisfy the rapidly expanding needs of the market.
Calculating a “realistic scenario”, the market could absorb 34 thousand IT professionals in the next 2 years. The “potential scenario,” which assumes the availability of the right quantity and quality of professionals, shows that the economy would need 44 thousand IT professionals over the same period. Based on the current capacity of the educational system, IT training is unable to keep up with this growth rate, so by 2023 the gap between market demand and training output could balloon to 15-26 thousand people.
“Science majors are still not popular among high school students, there is no real competition for admission into these training programs,” said Balázs Vinnai, president of the Hungarian Association of ICT Companies. “The rate of student drop-outs in IT majors remains very high, which is largely due to the shortcomings of secondary education. Students do not have sufficient background knowledge and skills, making it difficult for them to progress in their higher education,” according to Vinnai.
Difficulties in the workplace also contribute to the shortage of skilled IT experts in Hungary. Of the more than 2,000 IT employees interviewed by eNET, 26% have considered switching professions, most of them due to low wages, interest in another field, or burnout. Nearly one third has also considered seeking employment abroad.
Bad omen for competitiveness
The growing shortage of digital professionals poses a serious threat to competitiveness, as digitalization and innovative technological developments are now essential in all sectors. However, due to the lack of a trained workforce, these developments are currently lagging behind, which puts domestic companies, mainly SMEs, and the Hungarian economy as a whole at a competitive disadvantage.
The digital economy already accounts for nearly one-fifth of the country’s GDP. According to the forecast of a previous study published by the Association of ICT Companies, digitalization is set to become the engine of the entire economy within years. The rapid introduction of new technologies such as 5G, IoT, AI, blockchain, cloud, etc. would result in an annual GDP surplus of almost HUF 4 trillion within 3-5 years, which is almost 10% of the current Hungarian GDP.
The way forward
Balázs Vinnai is of the opinion that the state should intervene quickly, efficiently and comprehensively in order to avoid the critical shortage of specialists. The expert argues that the digital transformation of public education is of key importance in order to increase interest in university-level IT training and interdisciplinary training and to reduce dropout rates.
With the accelerating development of technology, Chief Information Officers (CIOs) once again play an increasingly important role. According to a joint survey by Deloitte and the Wall Street Journal, 40% of business executives designated IT executives as the main engine of business strategy, representing a higher proportion than all other executives combined. The dividing line between business and IT strategies is becoming increasingly blurred, the flow of information is essential, and instead of isolated strategy making and implementation, the focus is now on collaboration.
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