i AN ANALYSIS OF SKILLS GAPS IN SRI LANKAN SOFTWARE INDUSTRY By L.H.M.D.K. Lansakara This dissertation was submitted to the Department of Computer Science & Engineering of the University of Moratuwa in partial fulfillment of the requirements for the Degree of MBA in Information Technology. Department of Computer Science & Engineering University of Moratuwa December, 2009 ii DECLARATION “I certify that this dissertation does not incorporate without acknowledgement any material previously submitted for a degree or diploma in any university to the best of my knowledge and believe it does not contain any material previously published, written or orally communicated by another person or myself except where due reference is made in the text. I also give consent for my dissertation, if accepted, to be made available for photocopying and inter-library loans and for the title and summary to be available to outside organizations.” _____________________ _____________________ Signature of the Candidate Date The above particulars are correct to the best of my knowledge. ____________________ _____________________ Signature of the Supervisor Date iii ABSTRACT The software industry is one of the fastest evolving industries. The change is so rapid that all the stakeholders, who interact with the software industry, need to be ready for any change taking place, in order to survive in the global market. Since the software industry is knowledge driven, employees are the driving force of its success. As a result organizations need to make sure their employees are capable of handling or facing any challenge within the industry. Today, most of the industries have experienced skills gaps or skill shortage issues, worldwide and are trying to find solutions to mitigate it. It has become a predominant problem to the software industry. The purpose of this study is to conduct an analysis of the skills gaps, existing in the Sri Lankan software industry, to the benefit of all the stakeholders. It is focused on identifying factors that cause the skills gaps, their significance and skill deficiencies exist among employees, for programming & software engineering, testing & quality assurance and technical support job categories. Technology change, working experience and acquired training level were identified as the major factors to carry out a significant study of them, with respect to the existing skills gaps among employees in the industry. Skills gaps were identified in terms of soft skills, technical skills and core skills, according to each job category. Two questionnaires were used to collect data from non-managerial and managerial employees. The sample is then examined to get the results. The results of this study indicated that technology change has the most significant influence on the existence of the skills gaps among the three factors. Also it proved that the lack of working experience and the lack of training level have impacted on the existence of the skills gaps among employees, in the Sri Lankan software industry. In addition to that the study revealed a set of skills (soft, technical, core) lacking among employees, for each job category. Finally the study concludes with a list of recommendations that organizations, individuals and the government can adopt, in order to mitigate the skills gaps in the Sri Lankan software industry. iv ACKNOWLEDGEMENT This dissertation would not have been reality without the backing and cooperation from various individuals through various means. It is a pleasure to thank those who made this thesis possible after a more than eight months of work. First and foremost I owe my everlasting gratefulness to my supervisor Dr. Chandana Gamage, Department of Computer Science & Engineering, University of Moratuwa who provided invaluable guidance and advices from beginning to the end. I also thank Dr Anura Ekanayake, Chairman, Ceylon Chamber of Commerce for giving his opinions for my research at the initial stage. I further extend my deepest gratitude to Mrs Vishaka Nanayakkara, head of the department of Computer Science & Engineering and the non-academic staff of the department for giving their support and the guidance. I deeply cherish the colleagues and the management of Navantis IT (Pvt) Ltd for being flexible and cooperative throughout my research. I also thank Damith Pathirage for providing me the required resources to carry out the research successfully. Special thanks go to my batch mates who helped me in obtaining interviews and in the distribution and collection of data while completing their own research. Also big thank goes to my parents and brother for the patience and sacrifice that had to be made in order to make this a reality. And last but not least, I would like to show my gratitude to Chamara Wickramanayaka, for the constant support and encouragement given while doing his own research. v TABLE OF CONTENTS DECLARATION .......................................................................................................... ii ABSTRACT ................................................................................................................. iii ACKNOWLEDGEMENT ............................................................................................iv LIST OF FIGURES ................................................................................................... viii LIST OF TABLES ........................................................................................................ix CHAPTER 1: INTRODUCTION .................................................................................. 1 1.1 Background ...................................................................................................... 1 1.2 Motivation ........................................................................................................ 1 1.3 Problem Studied ............................................................................................... 2 1.4 Research Objectives ......................................................................................... 3 1.5 Significance of the Study .................................................................................. 3 1.6 Research Methodology ..................................................................................... 4 1.7 Nature & Form of Results ................................................................................. 5 CHAPTER 2: LITERATURE REVIEW ...................................................................... 6 2.1 Definition of Skill ............................................................................................. 6 2.2 Definition of Skills Gap .................................................................................... 6 2.3 Prevalence of Skills Gap ................................................................................... 7 2.4 Impact of the Skills Gap ................................................................................... 8 2.5 Empirical Skills Gap Analysis in the World .................................................... 11 2.5.1 Skill Gaps in the World’s IT Workforce ................................................... 11 2.5.2 Regional ICT Manpower and Skills Survey .............................................. 12 2.5.3 Information Technology Workforce Capability Assessment ..................... 13 2.5.4 National Employers Skills Survey ............................................................ 13 2.6 Factors Causing the Skills Gap ....................................................................... 14 2.7 Summary ........................................................................................................ 16 CHAPTER 3: RESEARCH METHODOLOGY ........................................................ 17 3.1 Measuring Skills Gap ..................................................................................... 17 3.2 Identifying the Type of Audience.................................................................... 18 3.3 Conceptual Framework ................................................................................... 18 3.3.1 Hypothesis Formulated ............................................................................. 22 3.4 Research Design ............................................................................................. 23 vi 3.4.1 Research Instruments ............................................................................... 23 3.4.1.1 Questionnaires ................................................................................... 24 3.4.1.2 Interviews .......................................................................................... 25 3.4.2 Defining Skills Set ................................................................................... 25 3.4.3 Operationalization of Variables ................................................................ 28 3.5 Data Collection Methods ................................................................................ 29 3.5.1 Questionnaires.......................................................................................... 29 3.5.2 Interviews ................................................................................................ 30 3.6 Determining Population & Sample Size .......................................................... 30 3.6.1 The Population ......................................................................................... 30 3.6.2 Sample Size ............................................................................................. 31 3.7 Data Analysis ................................................................................................. 31 CHAPTER 4: RESULTS OF DATA ANALYSIS ...................................................... 32 4.1 Reliability Analysis ........................................................................................ 33 4.2 Descriptive Analysis of Construct Variables ................................................... 34 4.2.1 Technology Change.................................................................................. 34 4.2.2 Working Experience ................................................................................. 37 4.2.3 Acquired Training Level .......................................................................... 38 4.2.4 Skills Gap ................................................................................................ 41 4.3 Statistical Analysis ......................................................................................... 44 4.3.1 Hypothesis Testing ................................................................................... 44 4.3.1.1 Hypothesis I ....................................................................................... 44 4.3.1.2 Hypothesis II ..................................................................................... 46 4.3.1.3 Hypothesis III .................................................................................... 48 4.3.2 Relative Significance of Factors Causing the Skills Gap ........................... 50 4.4 Overall Results of the Study ........................................................................... 51 4.4.1 Main Findings .......................................................................................... 51 4.4.2 Other Findings ......................................................................................... 52 4.4.2.1 Skill Deficiencies and Skill Competencies ......................................... 52 vii CHAPTER 5: CONCLUSIONS & RECOMMENDATIONS .................................... 56 5.1 Conclusions .................................................................................................... 56 5.2 Recommendations .......................................................................................... 57 5.3 Limitations of the Study ................................................................................. 60 5.4 Future Directions ............................................................................................ 61 REFERENCES ............................................................................................................ 62 APPENDIX 1: Final Questionnaires ........................................................................... 67 APPENDIX 2: Preliminary Survey Results ................................................................ 81 APPENDIX 3: Skill Categorization for Job Categories ............................................. 83 viii LIST OF FIGURES Figure 2.1: Impact of skills gap .................................................................................. 9 Figure 3.1: Preliminary survey results for the factors causing the skills gaps ............ 19 Figure 3.2: Schematic diagram for conceptual framework ........................................ 22 Figure 3.3: Skills hierarchy ...................................................................................... 26 Figure 4.1: Regression curve fit between skills gap and working experience ............ 46 Figure 4.2: Regression curve fit between skills gap and acquired training level ........ 48 Figure 4.3: Regression curve fit between skills gap and technology change .............. 50 ix LIST OF TABLES Table 3.1: Soft skills categorization.......................................................................... 26 Table 3.2: Technical skills categorization ................................................................. 27 Table 3.3: Core skills categorization ........................................................................ 27 Table 3.4: Relationship of the questionnaire with conceptual framework .................. 28 Table 4.1: Statistics of non- managerial questionnaire distribution & responses received ................................................................................................... 32 Table 4.2: Statistics of managerial questionnaire distribution & responses received . 32 Table 4.3: Reliability analysis of constructs for the non-managerial questionnaire .... 33 Table 4.4: Reliability analysis of constructs for the managerial questionnaire ........... 33 Table 4.5: Descriptive statistics of technology change – programming & software engineering job category .......................................................................... 35 Table 4.6: Descriptive statistics of technology change – testing & quality assurance job category ............................................................................................. 35 Table 4.7: Descriptive statistics of technology change –technical support job category ................................................................................................................ 36 Table 4.8: Descriptive statistics of working experience ............................................ 37 Table 4.9: Descriptive statistics of acquired training level – programming & software engineering job category .......................................................................... 39 Table 4.10: Descriptive statistics of acquired training level – testing & quality assurance job category ............................................................................. 40 Table 4.11: Descriptive statistics of acquired training level – technical support job category ................................................................................................... 40 Table 4.12: Descriptive statistics of skills gap – programming & software engineering job category ............................................................................................. 42 Table 4.13: Descriptive statistics of skills gap – testing & quality assurance job category ................................................................................................... 43 Table 4.14: Descriptive statistics of skills gap – technical support job category ........ 43 Table 4.15: Descriptive statistics of skills gap – managerial IT employees perspective ................................................................................................................ 44 Table 4.16: Correlation results between skills gap and working experience .............. 45 Table 4.17: ANOVA results between skills gap and working experience .................. 46 x Table 4.18: Correlation results between skills gap and acquired training level .......... 47 Table 4.19: ANOVA results between skills gap and acquired training level ............. 48 Table 4.20: Correlation results between skills gap and technology change ............... 49 Table 4.21: ANOVA results between skills gap and technology change ................... 50 Table 4.22: Significance values obtained for each factor .......................................... 51 Table 4.23: Lacking skills in programming & software engineering job category ..... 52 Table 4.24: Competent skills in programming & software engineering job category . 53 Table 4.25: Lacking skills in testing & quality assurance job category ..................... 54 Table 4.26: Competent skills in testing & quality assurance job category ................. 54 Table 4.27: Lacking skills in technical support job category ..................................... 55 Table 4.28: Competent skills in technical support job category ................................ 55