A survey on how the Hungarian labour force is prepared for Information Technology

GKIeNET Internet Research has carried out a survey for the Hungarian EUGA Leadership Board in which it has studied how prepared the Hungarian labour force is for implementing Information Technology. Their findings are as follows:

In the course of the survey we looked at how satisfied companies were with their employees' knowledge and preparation in mainly IT related tasks. We examined the problem from both the demand and supply side. On the demand side, we undertook this survey based on a nationwide representative sample among the companies employing at least 10 workers, and the supply side survey was undertaken by involving the employment agencies.

In general it can be stated that almost all enterprises with more then 10 employees use computers. These enterprises possess altogether 620 thousand PCs, this means that roughly every third employee has a computer. The number of those employees who effectively use a computer for their work is a bit lower, 590 thousand.

During the survey we categorized the enterprises according to IT resource demand of their activity and the specific number (per capita) of IT tools. In accordance with the results, only the quarter of the enterprises, less than 8 thousand companies can be classified into a group with a high or prominent IT intensity. These companies employ two thirds of the IT specialists working for enterprises with over 10 employees, in all 24 thousand IT professionals.

1. PC use by employees and management

The employees' knowledge of IT
If we compare the number of the employees using a PC and the number of those who have an IT qualification, it can be established that among the surveyed enterprises, 70% of the employees using a computer do not have any kind of IT qualification. The fact is even worse if we take into account that more than half of those qualified have merely ECDL examination or another kind of qualification, and these kinds of qualifications are not regarded as an advantage by neither employers nor by agents. Based on these facts it can be said that there is not any kind of easily available qualification for every day users which could provide a competitive edge in the competition for employment.

This lack of qualification has an effect not only among the older employees, the members of the re-training programs or among those who could not attend higher education, but also seen in the case of specialists, since the rate of those who have manufacturer qualifications is extremely low as well. The number is around 1‰ nationwide and even in the high intensity segment is about 3-4‰.

Substantial setback is probable in the labour force movements

Taking into consideration the plans of the companies surveyed, comparing with 2006-2007, a substantial setback is probable in the labour force trafiic in the next two years. While in the last two years the enterprises hired 53,5 thousand new employees working with a computer and 3,6 thousand IT specialists (this is around 10% of the affected labour force market), according to theforecasts in 2008-2009 these numbers are only 24,1 thousand and 1,3 thousand (3,4% of the affected labour force market).

The decline is the most striking in low IT intensity fields, but even in the prominent category the number of new employees can fall back to half. The exception is the group of developers in the high intensity segment. In this segment the planned number of the new employees will decrease only slightly despite the impact of the economic recession.

In the recruitment process for jobs preference is given to those who are already employed, but IT knowledge is not a serious criterion70-80% of the enterprises tried to fill new positions from within the company. This rate confirms that besides adequate professional knowledge, the knowledge of the company processes and loyalty towards the company have a basic importance. Only 10-16% of the enterprises employ the services of an agent or a headhunter depending on the position.

Filling a position takes no longer than 4 weeks except in case of the developers, where a university degree is dominant among the expectations. This underpins our previous statement in reference to the adequately qualified developers and the general lack of adequate qualifications.

In case of the IT qualification of employers working with a computer, there are not any special requirements on the demand side. In these positions four fifth of the enterprises do not establish any qualification requirements for the applicants, but 4 % stipulate an ECDL examination, 10% OKJ qualification and 9% technical college. Due to these lower expectations it is unusual for applicants or employees to be disregarded or dismissed because of their insufficient IT knowledge. The number of those dismissed will increase in line with the increase in employer expectations.

Regarding the examination of the IT qualifications, it is obvious that the companies -irrespective of the IT intensity of their activity- do not devote sufficient attention to the IT training of their employees.
9% of all employees working with computers, 6% of the managers using PCs, 9% of employees handling the IT tools and 25% of developers took part in an IT continuation training course last year. The number of those who take part in a continuation course increases in parallel with the IT intensity of the enterprises. In the high and prominent segment, every group shows an above average rate. By the high intensity enterprises, among developers, this rate reaches 68%. To interpret the figures it means that in 2007, in general, the enterprises with more then 10 employees spent 300 thousand forints on continuing education. Nationwide this equals 10,2 billion forints. As expected, IT training expenses are expected to show a gradual decrease in 2008-2009.

The main reason is that the enterprises are not satisfied with the available educational opportunities. Thus the knowledge "picked up" in the workplace is more important because according to the companies an appropriate IT qualification has to demonstrate practical knowledge. The results of the survey represent that the enterprises consider university and college education the most effective but they regard even this type of education as relatively useful. The technical college, OKJ qualification, and ECDL examination have a lower quality than the manufacturer qualification.

2. IT professionals

In the circle of enterprises with more then 10 workers, 23% of the companies employ IT professionals, and this represents 7,8 thousand enterprises. In general the IT specialists, namely the developers and crew who operate IT, are employed in a greater proportion by the higher IT intensity companies (two thirds and one third rate). These companies apply outsourcing at an even greater degree while companies with lower IT intensity do not employ IT professionals because of their poor IT infrastructure.

To examine the demand side, the IT jobs basically can be split into two groups: software developers and professionals handling the infrastructure. 60-70% of the vacancies are developer positions, while the remaining 30-40% are to infrastructure (system administrator, engineer) jobs.

The companies looking for an IT specialist require professional experience, a higher education degree, and good knowledge of English language. The higher education degree can usually be substituted by 5 years professional experience, which also emphasizes the advantages of practical experience over academic education.

Experienced IT professionals are in a fortunate position, since there is an over-demand for them. The difference between the smaller and larger companies lies in that the smaller ones look for a generalist while the larger enterprises focus on specialization. According to the general opinion of employment agencies there is a shortage of really good senior professionals who know at least one of the special types of software, and these companies - irrespective of the required specialty - rarely find adequate candidates. Software developers are the highest in demand and especially in the case of .NET, Java, C# and C++ program languages. For system administrators, supply and demand are in balance.

There are fields, however, with an over-supply as well, but the job seekers mostly overrate their knowledge. This situation may arise in those fields where the basic knowledge can be acquired on a course (e.g. web developing) and there is no need for extensive and thorough knowledge

The concordant opinion of the companies was that there is not any dominant direction of flow among the IT professionals. Both the large multinational companies and the smaller national companies possess such favorable features that support or set back a direction of flow. Among the large international companies, the knowledge of special software, the cognition of multinational environment and the development of language knowledge are considered to be an advantage. The smaller companies, however, support general development to a greater extent, and the majority of the professionals consider that their salary offers are more competitive too. It is important to notice that the employers employ candidates with work experience at multinationals by choice since it uncovers a lot about the knowledge and the facilities of the candidate.

In contempt of the lack of peculiar flow direction it is necessary to mention those effects of the market activity of multinational companies, which affect not only the IT specialists. When a big company enters into a market or leaves it, the mass employment and unemployement can alter the demand and supply of the labour force market.

IT specialists mostly change their workplace when they think their professional development is uninsured, they would like to get acquainted more with new technologies, program languages or they are dissatisfied with their salary or working conditions.

3. The employee of the future: the key to the development of the IT sector

From the development of the IT sector point of view, the quality of the rising generation from higher education is of key importance. In 2006-2007 depending on the scope of activities 11-20% of the companies acquired new workers, employed fresh entrants with up-to-date knowledge, and 4-7% workers who had just returned to the labour market. Preferring those who have fresh knowledge bears a relation to the quick development of the sector, and the significant innovation of the technologies. In case of those members of the labour force who were just returning to the market, the time they spent out of work was sufficient to make their knowledge obsolete.

The employees of the future, namely students participating in IT higher education, are of special importance to the profession. There are fewer candidates applying for IT courses in higher education in Hungary despite the reputation and the fact that the lack of professionals is growing. However, the rate of decrease has slackened since 2001, and 2007 was the first year when there was no significant fall in the number of candidates. In spite of the absolute decrease, to compare with the number of candidates to all higher education institutions, the rate of those who choose the IT field decrease in a lower measure, thus a relative growth is observable.

Satisfaction with IT courses in higher education

Based on our survey among undergraduates, it can be stated that they are satisfied with the quality, the quantity, and the expedience of theoretical training, but they stated that the quality and quantity of practical training was insufficient.

The opinion of the participants in higher education coincides with the opinion of the potential employers, that the participants in the different types of IT education do not get adequate training. A further problem was that they do not learn the usage of the up-to-date versions of the softwares.

As well as the lack of practical training, there was greater criticism from students regarding the fact that they did not have the opportunity to get to know the operation of companies.

On the whole it can be ascertained that the potential of the co-operation between the universities and the enterprises is not well exploited.

The opinion of the labour exchange specialists about IT education basically corresponds with the opinion of the students and the companies. So the present training is too theory oriented and does not provide enough time for practice, thus the entrants are not prepared for the real market expectations. According to experts, this problem is quite serious, since the enterprises do not want to employ trainees because they cannot recover the related costs, at the same time the businesses expect the candidates to have work experience. This represents well that there is a high demand for the partially existing initiatives - large companies ensure for students the attainment of work experiences in collaboration - without this the institutions are not able to reach a significant change in the rate on the field of practical and theoretical training.

The stakeholders mentioned the obsolete theoretical materials as another important problem. According to the experts, the education system follows the technological developments very slowly; and in many cases the new technologies are not available in schools, although they have arisen among the market claims. An aggravating circumstance is that in many cases the tutors, who teach the IT related subjects never worked in the world of business. A positive fact is that in some institutions of higher education there are special supplementary courses, and the self-education courses are also typical among IT students, furthermore, during their university or college years these students also enter employment either to obtain professional experience or for financial reasons.

Considerations in the selection of the workplace

The IT students consider the development possibility as the most important factor in the selection of the workplace, but in the case of assessment, they take into account the good community, the salary and the professional challenge. The proximity of the workplace is not a decisive factor as compared with the others.

The most important requirements are the flexible working hours and flexible scope of activities. IT graduates seem to show only moderate interest in doing telework despite the fact that it may have a greater significance in their field than in other ones.