Almost a third of digital businesses had to turn away work due to not finding the right talent in the past year.
A new skills audit released by independent trade association Manchester Digital has revealed growth slowdown amongst tech firms across the North West over 2018.
54 per cent of over 100 digital and tech businesses reported turnover growth this year compared to 83 per cent in 2014.
Much of this contraction was attributed to Brexit, as 37 per cent of businesses reported a negative impact.
One in four said they had to offshore work and 60 per cent of businesses had to inflate salaries to compete for talent to carry out work.
Manchester Digital’s managing director Katie Gallagher said: “While the North West continues to be a very attractive place to do business, we’ve found that growth has slowed this year as a result of ongoing political uncertainty and Brexit worries.
“We can also see that, for another consecutive year, talent worries continue to hamper the region’s businesses.
“Many of those surveyed are still concerned that the current curriculum is not relevant to industry needs and still don’t believe careers advisers are able to accurately advise on the opportunities available to young people.
“The skills shortage is multi-faceted, and everyone from Government, to education, to industry, has a part to play in solving it.”
There is also a gender gap with only one in five technical roles being filled by women.
“Skills will remain a key priority for Manchester Digital over the coming year, with initiatives launched to tackle the shortage from education level up, including ‘Digital Her’, which aims to get more young women interested in a career in tech,” she added.
However 29 per cent of businesses said they had their own graduate scheme, while 58 per cent either ran an apprenticeship scheme or were part of one.
Developer roles were most in demand for the sixth year in a row, with over a 20 per cent salary jump reported for these since 2014.
Developer, AI & Machine Learning, and User Experience were the top three roles expects to grow in demand for the region’s businesses.
Alison Ross, director of people, culture and technology at Auto Trader and chair of Manchester Digital, said: “The digital skills shortage is undoubtedly the biggest barrier to growth of any tech business in the UK, and the Digital Skills Festival is an excellent opportunity to reflect on what the region’s priorities must be to tackle it.
“As a sector we need to work together to look for some quick wins as well as lay down some long term strategic plans, industry must lead the way on this and ensure that government and education has the right information and support to meet our current and future needs.”
Stuart Bullock, managing director at BJSS, said: “The Skills Audit is an important piece of research which helps the industry to reflect on Manchester’s digital realities and grow responsibly. That’s why we’re proud to have been involved in compiling this research.
“From our perspective we’re working with Manchester Digital and other key players within our community to tackle issues such as gender diversity by supporting programmes such as Digital Her.”