IT skills shortages are continuing to affect all sectors, according to two separate reports by Pricewaterhouse Coopers (PwC) and the National Audit Office (NAO).

A rejoin bounty of £6,000 for leavers returning to the service helped push up recruitment rates in 2004, but numbers are slipping again, says the NAO.

The PwC report says industry employees who are talented, technically savvy and able to collaborate, innovate and manage change, are hard to find. It found 45% of companies say IT talent is scarce, but in three years’ time that figure will rise to 66%.

“Competition for talent has never been fiercer and there is likely to be another industry talent war if demand grows,” says PwC director Graham Wyllie.

“Technology executives must upgrade human capital management and create innovative programmes to attract and retain the best people.”

Many companies have looked abroad for skilled staff but overseas talent can no longer be relied on. In emerging markets, 41% of technology firms indicate difficulty in finding technical talent and 48% report problems in retaining it.