The IT Talent Shortage Debate - InformationWeek

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11/3/2014
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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.

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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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Laurianne
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Laurianne,
User Rank: Author
11/3/2014 | 2:27:33 PM
Re: More survey details?
Hi Susan. This was not a flash poll but an InformationWeek Research report. It reflects US respondents. (Readers, see our full lineup of research here: http://reports.informationweek.com/. ) We will post the full research report from the IT skills crunch survey soon. Meanwhile, the article includes some of the key statistics that US IT leaders shared with us about the state of the talent market.

 
Michael Endler
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Michael Endler,
User Rank: Author
11/3/2014 | 3:47:33 PM
Re: Poor IT Management, Lazy HR
I want to echo the notion that poor management is part of the problem. My personal observations don't encompass IT hiring in general, of course, but talking to people I know who work at some very big tech companies, I've heard several chronic managerial products that much up hiring, including

-- Too little communication. Marketing wants to change something at the last minute and doesn't appreciate what this entails for engineering. Engineering is stretched too thin because its budget was established under the assumption that marketing won't change its schedule every other day. Brand starts to get angry because Engineering makes a change that Marketing requested but that Brand wasn't included on. Engineering makes a mistake but doesn't want to own up to it because Engineering is already catching heat from Marketing and Brand. And so on. There's this quixotic notion that the hiring budgets established at the beginning of the quarter will be adequate for all of the managerial disarray that follows.

-- Quarterly goals. Too often, a manager realizes that everything is going to hell because he (or his bosses or collaborator) hasn't planned adequately. That person might realize a need to hire more people. But that manager's bonus (or perhaps his boss's) depends in some way on projects getting rolled out on budget-- so no hires are made. Sometimes, the manager plans to switch jobs soon anyway, because his job is a nightmare. In this scenario, achieving that bonus, even if it screws up long-term company plans, is a way to pad the transition. Because of the aforementioned communication problems, this sort of self-serving management goes undetected by superiors who are actually invested in the company's success, and so on.


-- S--- rolls downhill. People work ridiculous hours because their bosses aren't communicating, are protecting quarterly budget goals, aren't listening, etc. Some people get burned out, some of them very talented. More money is spent on recruiting efforts-- money that might have been better spent just hiring another person to begin with and retaining a valued employee. And so on.

-- Contract workers get abused. Because of all the disarray, people contracts for specific jobs get pressured into broader roles. Sometimes this results in contracts being illegally denied OT and health benefits (because they shouldn't be classified as contract workers anymore), but the employee, hopeful he'll be given a full-time position, never challenges anything.

Again, I know not all companies are like this. Many of my friend who work in IT have very satisfying jobs, with great pay, benefits, bosses and co-workers. But more than a few other friends and acquaintances have relayed horror stories along the lines of what I described above. Perhaps a talent shortage is one of the problems facing IT, but good old corporate bureaucracy and poor management play roles too. 
jries921
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jries921,
User Rank: Ninja
11/3/2014 | 4:36:13 PM
I hear you, but...
...the IT shortage rhetoric sounds like a blatant appeal for corporate welfare (via artificial inflation of the supply; thus depressing salaries and making it harder for those laid off or fired to get new jobs in the field).  Even if those making such claims were absolutely right, it's not the job of government to alleviate it by either pushing people into the field not otherwise so inclined; or by importing guest workers.   Indeed, the classical economic theory generally espoused by "pro-business" commentators (except when it's inconvenient) is that if there is a shortage, wages/salaries will rise and people will be financially motivated to do what they have to to qualify; or it will be financially worthwhile for employers to train people to do those jobs (it's called "supply and demand").  Adam Smith made the argument that artificially inflating the supply of workers trained in a particular occupation was counterproductive, as the inevitible result is a lot more people in the occupation than could reasonably be accomodated; and I think he was right.  And if there were a shortage, it would certainly not be the case that older, experienced computer professionals would have a hard time finding employment if they lose their jobs (I know someone going through that now); indeed, they'd be in high demand.

Overspecification of qualifications has been a problem for a very long time and was a major part of the reason why I didn't land my first programming job until five years after I got my degree.  Artificially increasing the supply of people meeting them won't help matters; economic pressure on employers to abandon the practice will.

 
danielcawrey
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danielcawrey,
User Rank: Ninja
11/3/2014 | 4:45:17 PM
Re: Poor IT Management, Lazy HR
The reason why companies are often so stringent on hiring is because they have been burned in the past by not-so-great hires. Those cost companies a lot of money, and as a result risk has to be reduced.

It does make one wonder whether or not the shortages being reported are actually real or just a risk-reducing tactic by companies. It is hard to tell. 
Laurianne
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Laurianne,
User Rank: Author
11/3/2014 | 5:02:05 PM
Re: I hear you, but...
You're not alone in that opinion re. salaries and talent supply/demand. The point that wages should be rising if there is a "shortage" is a point that both Ron Hira and Norman Matloff point to in their analysis of the shortage as "imaginary."
fullstackdavid
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fullstackdavid,
User Rank: Apprentice
11/4/2014 | 1:03:08 AM
Talent's out there for companies that are looking
 

Hi Laurianne - really enjoyed your article, I like the wide swath of companies you talked to (I've worked previously at Gilt and really admire their IT hiring practices) and the fair opinions you got from both sides.  As a founder of a coding bootcamp, Fullstack Academy, I get to work with lots of great companies who hire our students.  The companies that are out there doing the hard work of connecting their engineers with the engineering community are getting great returns on their work.  The company doesn't have to be innovative - just do basic events like hackathons, meetups, talks, big speakers.  These things connect engineers to engineers and that's where you'll really find good talent that matches well with your company's needs.

The problem comes from when a company no longer views hiring as the role of the engineering manager and outsources it to HR.  I've worked with great HR people, but it's hard for them to filter out technical things and so they rely on heuristics that give both false positives and false negatives.  I believe companies get to some scale and they believe this to be a fact of life - from what I've seen of really well run engineering organizations, those that continue interacting with outside engineers are those that continue to find, recruit, retain and grow great talent.

Finally, schools like ours are working as hard as we can to get more talent onto the market.  We've had students from all walks of life come and in three months learn CS fundamentals and enough practical skills to get great engineering roles.  
Joe Stanganelli
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Joe Stanganelli,
User Rank: Author
11/4/2014 | 4:45:49 AM
Purple Squirrel
I'm really glad you pointed out the "Purple Squirrel Hunt" tactic.  This is directly tied to the shortage of women in IT.  Studies indicate that women are far less likely than their male counterparts to "stretch" to submit themselves for job listings that seek qualifications exceeding what they possess.
Joe Stanganelli
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Joe Stanganelli,
User Rank: Author
11/4/2014 | 4:51:56 AM
Re: Oddly specific
@David: Often, what contributes to this extreme specification is overly by-the-numbers HR people pressuring supervisors/executives for clearly defined, to-the-digit specifications.  (Non-recruiters usually just want "someone who can do the job" and with whom they can get along.)

And then, of course, there is the issue of overreliance on keyword-scanning HR software.
JDUBOW201
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JDUBOW201,
User Rank: Apprentice
11/4/2014 | 6:33:49 AM
Self-Serving nature of IT shortage allegations.
Saying there is a shortage serves a corporate interest in hiring younger, cheaper programmers, especially on h1-b visas, the modern equivalent of indentured servitude. In an era of "lowest cost, technically acceptable" government contracting policy there is no premium put on quality. What is clear is that programmers and developers are hurting and having lots of trouble finding work. 

If the Administration can go into Defcon 5 with full deployment of an army of lawyers every time a woman or minority feels aggreived or insulted,  they ought to be responsible enough to investigate the labor practices for the vitally important IT programmers and developers. I'm not holding my breath. 
CliffBerg
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CliffBerg,
User Rank: Apprentice
11/4/2014 | 7:05:01 AM
The disconnect is between IT leadership and project leadershp
I agree with many of the posters here that HR managers look for the wrong things, and project managers are too anxious to have people "up to speed" from day one.

Recently there was a discussion on this topic in the LinkedIn group "Chief Information Officer (CIO) Network - The Group for CIOs". The discussion was titled "IT Skills Gap". The overwhelming consensus seemed to be that IT leaders want to hire "natural learners" rather than hire for specific skills. Yet, project managers are too anxious to do that: they want people to have zero learning curve.

Thus, I think the disconnect is between IT leadership and project level leadership. Agile projects in particular: there is so much pressure to start producing immediately (team "velocity" is measured continuously).

The reality is - as many here have stated - that no one can stay on top of the changes in IT anymore. Change is constant. If a project is using tools X, Y, Z today, odds are that a year from now they will be using tools X, Q, R. And that means that the last thing you should do is hire a cheap college grad with recent practice in tools X, Y, Z, because next year, much of what they created will be "legacy". Instead, if you hire seasoned programmers who know how to create maintainable systems, they will know better than to wire everything so that it depends on tools X, Y, Z. Young college grads don't know that.

 
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