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The IT Talent Shortage Debate

Tech employers say good people are hard to find. Job hunters see a broken hiring process. Both sides need to shake their frustration and find new ways to connect.

Download the new issue of InformationWeek, distributed in an all-digital format.

Talk to employers and job hunters about the state of the IT talent market, and you hear two words repeatedly: speed and pain. IT leaders must staff projects quickly, often requiring specialized skills that most job hunters -- especially generalists or those looking to change tech tracks -- don't have.

As a result, hiring organizations see an IT talent shortage, while job hunters insist that employers are botching the hiring process, screening out too many good candidates. Both sides agree on one thing: They're frustrated.

Third-party recruiters say that while IT leaders cry shortage and job hunters cry foul, the job slots sit empty for too long, hurting business results and team morale. But they doubt the picture will change unless hiring managers get more creative and realistic, and job hunters come to a fuller understanding of market realities.

Which brings us back to the question: Is there an IT talent crunch? It's a simple question with no simple answer. InformationWeek asked the IT community: Do you see an IT talent shortage today in one or more technology areas important to your business? Yes, said 73% of respondents at companies with fewer than 1,000 employees, and a whopping 88% of respondents at larger companies.

But is a botched hiring process aggravating this talent shortfall? Business technologists are sharply divided: About half of survey respondents at those larger companies see it as broken or too stringent, while 45% of the folks at smaller companies see things that way.

Any discussion of IT hiring must include what companies are willing to pay to fill open positions. Ron Hira, a professor of public policy at Howard University and a longtime critic of the H-1B visa program, recently called the IT talent shortage "imaginary," a front for companies that want to hire relatively inexpensive foreign guest workers. Norman Matloff, a computer science professor at the University of California at Davis who collaborates with Hira, takes the argument a step further: "The biggest single problem, as I've said before, is age discrimination," Matloff says. "The employers typically define job openings to be entry level, automatically rejecting those at the midcareer level."

Another disliked hiring tactic is a "purple squirrel" hunt, whereby companies seek a job candidate whose mix of skills and experience is impossible to find. "The 'purple squirrel' job postings arise in many cases because HR needs a way to thin out the mountains of applicants that they have," Matloff says. "So again, the claimed shortage is actually an embarrassment of riches."

Talk with employers and recruiters and you hear a more nuanced story. It's not just about how many IT job applicants are in the US talent pool, or about salaries, but how the IT hiring process has changed in recent years. Like them or not, would-be applicants need to know the rules of today's employment game.

Need for speed
"This kind of feels like 1999 or 2007," says Matt Rivera, VP of marketing at IT staffing firm Yoh. "… The technologies are moving so fast, it's hard for [employers and job hunters] to keep up. It's hard to engage that talent pool far enough ahead of the need."

IT organizations are under intense pressure to deliver projects faster than before -- and that need for speed necessarily influences IT hiring. The IT generalists, and even some topic generalists, such as infrastructure managers, have found their roles left by the side of the road, as project leaders hire for deep experience in specific niches, such as cloud security, DevOps, and data analysis and architecture.

"There's a lot of desperation on both sides out there," Rivera says. One sign of that desperation: 63% of IT hiring managers reported catching lies on resumés, according to a recent Harris Poll/CareerBuilder survey. IT candidates rank as the third biggest liars; only financial services and hospitality candidates fib more, according to the survey.

"The trend has gone into more specialized skill sets," says Asal Naraghi, director of talent acquisition for healthcare services company Best Doctors. As an HR pro, she "absolutely" sees an IT talent shortage. "In terms of being able to innovate, the tools that are out there are more complex," she says. "What are your competitors doing? You have to keep up with that. We also focus on people who are a culture fit with us and are passionate about our mission."

She gives the example of a recent search for a user-experience expert, a talent category that's in high demand as companies prioritize mobile development. The position had been outsourced -- and after interviews, the company kept it outsourced, she says, because it didn't find a person with deep skills and a fit with the company's mission.

CIOs echo the need for deep experience. "The broader skill sets, I think you'll see those in analyst roles, Scrum-master-type roles …some management roles," says David Wright, CIO of McGraw-Hill Education. "But more and more, the hands-on coders, we're looking for people who are just really deep in whatever discipline we're trying to hire."

Giorgos Zacharia, CTO of online travel company Kayak, says he's having a hard time finding UI engineers and mobile developers, noting that he seeks both entry-level and experienced people. Kayak offers great perks and pays generously, he says, yet the company still struggles to fill open slots even with its proximity to Boston and wealth of local universities. Paying dividends for Kayak are the three internal recruiters it has hired since 2013 and the hackathons it has attended to connect with talented IT pros.

Even so, Zacharia this year turned to holders of H-1B visas -- which let non-US citizens work in the US in a specialized field for up to six years -- to fill six slots, and he expects the company to do about the same level of H-1B hiring in 2015. Kayak is also hiring more people overseas, especially in Berlin, he says.

Seeking Mr. Right
For employers, hiring can feel like dating: You spend a long time looking for the perfect match. But how many chances will you take? How flexible will employers be during the hiring process? This is where both the recruiters and the job seekers voice exasperation.

Tracy Cashman, senior VP and partner in the IT search practice of WinterWyman, sees a genuine talent shortage. "There are more jobs than people who are skilled," she says. While she's starting to see an uptick in engineering graduates, "we've been feeling this since the [dot-com] bubble burst," Cashman says, when college students were worried that all IT jobs would move to India. "And we're still fighting that," she says.

On the flip side, some employers have become "persnickety," says Cashman, who advises CIOs to remove their perfection goggles. Companies wait too long to fill open positions, which not only hurts the business but also heaps extra work on the existing team. Delays also turn off qualified candidates, who assume that if a slot is open too long it's like an unsold house that has "issues."

You don't see the "best available athlete" mentality, Cashman laments, referring to the professional sports strategy of signing the best player available rather than hiring a lesser player to fill a specific position. Hire a smart, creative person who's eager to learn, and train that person on the rest, she advises clients, before the other valuable people on your team walk out or you blow the business deadline.

What are the ramifications of the so-called IT talent shortage and unfilled slots? Among the respondents to our survey who work at large companies, 79% cited delayed IT projects, 48% cited poor-quality IT projects, and 33%

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Laurianne McLaughlin currently serves as InformationWeek.com's Editor-in-Chief, overseeing daily online editorial operations. Prior to joining InformationWeek in May, 2011, she was managing editor at CIO.com. Her writing and editing work has won multiple ASBPE (American ... View Full Bio

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asksqn
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asksqn,
User Rank: Ninja
6/17/2015 | 6:34:11 PM
H1B Visa Abuse is Also To Blame
It's downright comical how the writer of this piece completely left out the issue of H1B Visas, particularly with regard to the about-face Disney just did in the face of public backlash for pink slipping 250 tech workers and then making them train their inexperienced, cheaper foreign replacements.  No discussion of American IT is balanced without adding the decade plus long abuse of the H1B Visa charade fraud.
Robert P.W360
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Robert P.W360,
User Rank: Apprentice
11/10/2014 | 10:15:19 PM
Science+software in HR
Soon after losing my job in 2008, in IT after 15 yrs at 2 Fortune500 firms, I applied to AT&T Mobility - just to get by for awhile. After their very long on-line resume stuff, a 100 question personality profile popped up. AT&T told me to look elsewhere based on the psych/personality test. That's where my story began.

HR has been infiltrated with software loaded with human behavioral sciences to assess candidates for work. First it was workforce behavioral psychology. NOW, neurologic tests are infiltrating HR, to assess thoughts for allowing predictions as to your potential and performance. What's next? In about 5 years, "genomics". This is a fluid evolution of science+tech+med. A Harvard author defines the slide as, segmentation>personalization>discrimination. It's taken from the sphere of marketing where business uses excessive data points to target consumers. Big data works in HR too, the science is in the assessment software. We are heading to a software selected workforce.  Psychology + Neurology + Genomics
Susan Fourtané
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Susan Fourtané,
User Rank: Author
11/9/2014 | 9:06:12 PM
Re: There's no skill shortage, there's an ETHICS shortage
Thaddeus, 

You have spoken some good truths in a very straightforward way. I appreciate it very much.

I have seen similar things to the ones you point out. That unwillingness to pay for quality talent is found all over the place. It's been like a virus that has spread all over. 

Some corporations go as far as offering you peanuts when they perfectly know the value of the work and they also know they are offering half, or even less than what the job was worth years ago. Sometimes I don't know how they have the courage to do it and ask if this is acceptable when they know it is not. 

-Susan
Joe Stanganelli
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Joe Stanganelli,
User Rank: Ninja
11/9/2014 | 7:40:26 AM
Re: Purple Squirrel
Indeed, I was granted a job interview a couple of years ago where I had less than half the "requisite" experience posted.

I was not ultimately hired, but I was the finalist who just barely got beaten out.  Many of the people who didn't get hired had well over 20-25 years of experience.
Michael Endler
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Michael Endler,
User Rank: Author
11/8/2014 | 5:02:50 AM
Re: Poor IT Management, Lazy HR
"In the Bay Area many non-tech jobs are paying around six figures.  Police officer in San Fran, starts at 90k + Pension + (best benefits in the world) + Job Security, education requirement (only a 2-year degree)."

I agree with some of your points, but I think the quoted passage is a bit misleading. With your example, you're talking about government jobs, though, which aren't representative of the "non-tech" jobs in the Bay Area. The statistics are pretty clear that tech workers (and engineers in particular) make way more money relative to people outside tech. I have no problem with tech workers making a lot-- in fact, in some cases, I think many of them should be even better compensated. But I don't think you can point to "non-tech" workers, who generally earn much less, if you're trying to demonstrate how tech employees are getting hosed. 

The median annual salary, including all tech workers, in SF is something like $63k, according to at least one source I've seen. Meanwhile, I've seen several surveys that peg average engineering salaries in the region at 50-100% more than this median. If we go back to that median figure and consider that many, many tech jobs in SF are in the upper 50%, and that many government workers are also in the upper 50%, we'll have to conclude that many, many public sector non-tech workers are in the bottom 50%. Suppose you make $50k in SF. Sounds okay, right, even if it's below the median? It might be a workable amount, if you don't have kids-- but in a city in which renting a new apartment will set you back around $25k annually, that $50k salary (which comes in closer to $35k after taxes) doesn't go very far. If you also consider that many young non-tech workers have huge student loans (just like most young tech workers do), that $50k starts to look really meager. Certainly, it becomes meager enough that you can't use such an employee to demonstrate how a highly-paid engineer is getting screwed. I realize that you said you were talking about people earning six figures-- but my point is, these people are far rarer among non-tech workers than you seem to indicate.

The engineering averages (and other measures of local tech salaries) are often inflated by the presence of a few extreme outliers (e.g. I saw one that included people like Mark Zuckerberg in the "tech employees" category, which has to have had a significant effect on the overall average). But nevertheless, even without job security, tech works in the bay area are better enabled than many "non-tech" workers to accrue wealth, and to have some sort of nest egg if they lose their jobs. I don't mean to belittle that tech workers sometimes get a raw deal-- they do. As some of my other posts demonstrate, I think many complaints about hiring practices and wages in the tech industry are valid. But I don't think the Bay Area's non-tech workers are a good example for the way tech workers are getting screwed, at least not if you paint with a broad brush.
Thaddeus Howze
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Thaddeus Howze,
User Rank: Apprentice
11/7/2014 | 7:05:28 PM
There's no skill shortage, there's an ETHICS shortag
Nonsense. There is no skill shortage. There is an UNWILLINGNESS to pay for quality talent. Corporations have taken this stance on pay which says: 

We will not pay you what the job is worth. 
We have done everything we can to make society as unequal as possible. 
We have jury-rigged society so you don't make enough money to live on, have as much debt as you can carry and if you are a young person, engineered society so you CANNOT get a job without as expensive a degree as we can possibly saddle you with. 

This means if you are an older person who was pushed out of the workforce during the Great Purge of 2008, you are probably still looking for work. You have the skills but you are not willing to do the same job you used to do for half the money you used to be paid and working 20% more hours, to boot. 

If you are a college student, you are more likely to get a job, because you don't know what the value of that job is worth. If ten years ago it paid $60,000 and now pays $35,000, what do you know? You didn't have a job ten years ago. This looks acceptable to you. 

Corporations float the idea that the workforce should understand running a business costs money and we all have to tighten our belts. Statistically that simply isn't true. While the rank and file worker has not seen a pay increase of any significant value for over 30 years, the executive class and the corporate investors are making money hand over fist and their income has increased a thousand fold in that same 30 year window. 

Anyone who says they can't find workers is being dishonest. What they can't find are people who can afford to live on these pitiful excuses for wages for doing the work the corporation cannot live without, while executives who sit in the lap of luxury, who want for nothing, who laughingly get into their seventeen Mercedes in a decade and go to their mansion in the hills, keep their employees working for slave wages, no medical benefits and all working two to four part-time jobs to pay for the next generation of wages slaves to work even harder, increasing national productivity, for even less money. 

Yes, I have said what few are willing to say. We are being led astray, told we are lacking something that once upon a time, if a corporation needed trained people, they did what anyone who needed a person with a particular skill set did. 

They trained them.
Birchbark
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Birchbark,
User Rank: Apprentice
11/5/2014 | 9:47:02 AM
Why no reference to the Bureau of Labor Statistics?
If one goes to bls.gov and looks up the estimated job growth for IT and related occupations one does not get the idea there is much of a shortage.

These jobs are all under "Computer and Information Technology"

For example, one occupation that would seem to be covered by this article is "Computer Programmers".

The BLS has computer programmers in the USA employing 28,400 more people in 2022 than in 2012 or adding 2,840 incremental jobs per year.

Other jobs sch as "Computer network architects" are expected to grow by about 2,090 incremental jobs per year.

"Software developers" are expected to grow by about 22,260 per year.

"Information Security Analysts" by about 2,740 jobs per year.

"Database Administrators" by about 1,790 jobs per year.

The rough total of the incremental job gains seems to approximate the 85,000 H1B visas granted this year, indicating few incremental jobs available for USA workers.


Is the bls.gov completely out of touch?

Am I reading the data incorrectly or overlooking some job classification with many more jobs expected?

 

 

 

 

 

 
Susan_Nunziata
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Susan_Nunziata,
User Rank: Strategist
11/4/2014 | 6:02:43 PM
Re: More survey details?
@Laurianne: Thank you! Wealth of info in that link, appreciate your sharing it and look forward to more on this topic.
tnguyengp
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tnguyengp,
User Rank: Apprentice
11/4/2014 | 1:08:30 PM
IT Staffing
Identifying and attracting candidates is only half the battle. It is a critical component of business success to have a quality screening process because a right hire can increase productivity and success while a bad hire can lead to losses in time, money and employee morale. Develop a quality screening process and make sure you paint an accurate picture of a position.

Than Nguyen

The InSource Group

IT Staffing Company

 
Laurianne
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Laurianne,
User Rank: Author
11/4/2014 | 12:35:08 PM
Re: Purple Squirrel
@B52Junebug, you're right, women can face backlash about ambition in some companies and interview situations. Check out this interesting advice from negotiation expert Joan C. Williams, on how women can employ "gender judo" strategies: http://www.informationweek.com/strategic-cio/team-building-and-staffing/gender-judo-salary-negotiation-tactics-for-women-/a/d-id/1297532
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