Cambodia's nascent information technology (IT) sector faces an enormous skills gap that is slowing the industry’s development, increasing costs for businesses and affecting the competitiveness of firms in the Kingdom, according to a report released yesterday.

The Cambodian IT industry: Skills for a digital economy report, produced by Cambodia-based online consultancy Digital Rain, conducted surveys with 21 IT-focused businesses and carried out focus group interviews with 63 IT students in the country.

The report found that 75 percent of businesses interviewed were unable to hire competent IT staff, pushing most firms to provide training for their new employees at significant costs. Though there are many entry-level applicants, their skills are very low, the report said, adding that there is also a significant shortage of qualified senior level staff.

“The most difficult roles to fill were IT project managers and team leaders where there is a small pool of talent to choose from,” it said.

The limited number of skilled IT candidates has led firms to focus on recruiting staff with soft skills who can then later be trained in the technical skills required for their business, the report added.

It noted that “72 percent of the employers said that the most important selection priority is soft skills, compared to 22 percent who prioritised technical skills over all others”.

According to the businesses interviewed for the report, the soft skills most lacking for applicants were accountability, responsibility, dealing with difficult situations and leadership skills. The current shortage of trained staff was also creating wage distortions in the market.

“The low number of senior managers and C’level leaders is pushing the remuneration packages out of sync with the rest of the industry, putting in question the notion of Cambodia as the new international IT outsourcing location,” it said.

A senior developer in Cambodia can earn between $13,000 to $19,500 a year, which is a higher salary than Indian or Filipino employees could expect with more years of experience, the report explained.

Another issue, particularly for large well-known brands the report said, is that employees who underwent training with their firms regularly left after a short amount of time for higher salaries, creating a financial loss from the cost of training.

Chris Wray, CEO of Digital Rain and one of the report’s authors, said during a presentation for the study’s release that the nature of the IT sector today required employees to continuously adapt and acquire new skills, necessitating better preparation for Cambodians looking to work in the industry.

“What is expected by the majority of businesses is not being delivered by our education establishments,” he said, adding that the Cambodian government was focusing on other development priorities, leaving the private sector to fill the gap.

“By the time Elon Musk is putting guys on Mars, the Cambodian government will be investing in IT”, he said.

In a separate report, titled 2017 Global Talent Competitiveness Index released earlier this week by international business school INSEAD, the need to foster continuous learning was emphasised in the context of the disruptive effect of ongoing technological advances.

Data from the report reinforced the findings published by Digital Rain, showing that while Cambodia ranked five out of 118 countries for the prevalence of training in firms, it ranked 118 in terms of high-level skills, 108 in employability and 104 in ease of finding skilled employees.

Paul Evans, academic director and co-editor of the Global Talent Competitiveness Index, told the Post in an email that strong private sector training was a trend in developing markets with poor formal education standards.

“Companies make up for the weakness of the national educational system by investing in people development,” he said. “This is indeed a characteristic of some developing countries that want to stay in the talent prosperity race.”

However, companies that develop their own talent pool within must be wary of churn.

“It pays off as long as one is sure that people with better qualifications do not leave for other companies that pay a bit more in salary,” he said. “So it has to be part of a wider strategy of people development and retention.”