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Trying to Solve the IT Skills Shortage

That there is an acute shortage of IT professionals in Hungary is nothing new. The way the industry is trying to solve it or adapt to it, however, needs to change.

Barbara Fazekas

It has been more than three years since the last official figures by Bell research on the number of IT professionals the industry is short of came out. Since then employers and the ICT Association of Hungary (IVSZ), which lobbies for the interests of the industry, have used the 20,000 plus figure at every possible platform to raise awareness of the problem. The government, too, relied on it when creating the Digital Workforce Program, a strategy aimed at making digitally competent workforce available.

Yet even if the program’s educational goals of directing substantially more young people onto a digital career path were accomplished, it would prove too little to fill the gap which has only widened since. (IVSZ is currently working on updating the figure; it puts it at 30,000-40,000 now.) 

Companies need the “mass”, of course, less qualified IT professionals who are able to perform simple tasks. But as more complex projects and R&D centers are brought here, a supply line of the upper 20% of professionals, who will drive these process, needs to be ensured as well. 

“Simply, there are not enough children willing or capable of doing university STEM [standing for science, technology, engineering-and mathematics] training and fulfilling these tasks,” Barbara Fazekas, head of IVSZ’s Digital workforce and education working committee told the Budapest Business Journal.  

The group headed by Fazekas, who was formerly co-founder and a CEO of Green Fox Academy, a coding boot camp company based in Budapest, has done a feasibility study into this problem, which is currently being validated by the biggest employers. 

What Hurts Most?

It also set out to identify how the skills and labor shortages have affected employers in the past two business quarters. “We wanted to find out what hurts them most,” Fazekas says. The strategies of the Digital Workforce Program are good but an HR director can hardly relate to “trying to direct more teenage girls towards IT”, she notes. Fazekas’ committee quizzed 136 companies and summarized the results in its “Labor Market Symptom Map” (Munkaerőpiaci Tünettérkép).

The major problem, it appears, is that employers can’t get a grip on the changing labor market – neither in recruitment nor in labor retention terms. Classic packages no longer work here, Fazekas notes. For many, work-life balance means more than earning an additional HUF 150,000. 

Nor does not help that, being a globalized industry, IT professionals can earn European salaries. Candidates are well aware of this. 

“IT is the industry where categories among candidates with different level of experience have blended [the most],” says Mirtill Megyeri, co-founder of Zyntern, a job platform. So did salary levels. Junior level programmers, with no experience (that is, senior college students) have HUF 400,000-450,000 (gross) salary expectations, according to Zynterns’ research. Applicants with some experience can ask for HUF 600,000-650,000 (gross). Salaries are capped at HUF 800,000 – one million, but compared to other industries one can reach this level fairly quickly, Megyeri notes. 

Counter offers, the sum an employer offers to try and retain an employee wishing to leave, are also very revealing. In other industries, employers would offer a 20-30% raise. In IT, this can be as high as 50-60% percent, Megyeri says. 

Breaking Point?

It is little wonder, then, that, according to the expert, the Hungarian labor market is getting to the point where it can no longer offer more. Employers simply won’t be able to pay more than HUF 1 mln-1.2 mln. Startups can’t even match that, owing to their salary policies. International companies also come to Hungary in search of cheaper workforce, and will cap salaries. As a result, professionals keep leaving the country, further exacerbating the shortage.

So what are employers supposed to do? Based on the problems diagnosed in the symptom map, IVSZ will issue another publication with its proposed solutions. 

“Obviously, it is not a handbook for life,” Fazekas says. But it will contain figures on how much it costs for an employer to lose an employee and also methods for retention. “This way we can convert this problem still handled on a moral basis (‘Is an employee asking for a month’ sabbatical every year shameless?”) into a business one, and companies may consider that it may be worth creating a system adjusting to these needs,” Fazekas says. 

IVSZ hopes to publish its guidelines this month. “Our aim is to have as much publicity/echo as we can: this way employers can’t avoid taking a stance,” the expert says. “The Digital Workforce Program tells what the government needs to do. Our publications focus on the role of employers. We don’t want to tell them what to do – they need to tailor these methods according to their needs. We just want that they start thinking about this problem.”