Technology Talent Shortage: Is the solution education, immigration or recruiting women?

http://www.rockiesventureclub.org/2013/07/technology-talent-shortage-is-the-solution-education-immigration-or-recruiting-women/

Technology Talent Shortage: Is the solution education, immigration or recruiting women?

Technology Talent Shortage: Is the solution education, immigration or recruiting women?

Attend any tech event in Colorado and you’re sure to walk away with the impression that there is a huge tech talent shortage here. Even though the startup scene here is collaborative and cordial, things can get competitive when companies are looking to recruit talent.

In a time of high unemployment, how do we explain this shortage of tech talent? One thing we know is that the shortage is not limited to Colorado – I am hearing of shortages all around the country.

Some people think that the issue is that we are not turning out enough educated people to fill these positions, yet according to research by the Economic Policy Institute, “For every two students that U.S. colleges graduate with STEM degrees (science, technology, engineering, and mathematics), only one is hired into a STEM job.” At issue may be not that we are not turning out enough graduates, but that they aren’t graduating with the skills that they need to succeed in the job market. In fact, the Economic Policy Institute reports that only about a third of the IT workforce has an IT-related college degree, 36 percent of IT workers do not hold a college degree at all and only 24 percent of IT workers have a four-year computer science or math degree, so maybe college education isn’t the answer.

Are programs like Galvanize G-School that focus on quickly educating people in real-world application development taking over and producing more cost effective workers? The G-School guarantees a $60,000 job within three months of graduation or they’ll give your tuition back. That’s a pretty confident offer – especially since the tuition is $20,000. That’s a lot to give back in a refund, but it’s about a tenth of the cost of pursuing a full time private college education these days, and the job prospects are better, so I predict we’ll be seeing more programs like this in the future.

Is there really a shortage of skilled labor, or is it an economic issue?

Another way of looking at the issue may be that there are plenty of skilled people in the US, but that there are better opportunities outside of IT that may be more attractive. When U.S. talent is not actively entering the tech job market, the international market jumps in to fill the gap. Here are some interesting statistics (also from the Economic Policy Institute):

1) The annual number of computer science graduates doubled between 1998 and 2004, and is currently over 50 percent higher than its 1998 level, so we’re turning out lots of grads.

2) Immigration policies that facilitate large flows of guestworkers will supply labor at wages that are too low to induce significant increases in supply from the domestic workforce.

3) Immigrant worker visas have more than doubled since 1998.

4) 52.7% of STEM graduates who do not pursue technology careers cite pay, promotion and working conditions as their reasons for pursuing work in other areas.

5) Computer programmer salaries have remained relatively flat in real terms between 1994 and 2010.

These statistics would lead one to believe that immigrant workers are taking all the IT jobs, but on-the-ground experience doesn’t seem to support this, at least in Colorado where we’re seeing high demand and relatively high wages for developers. The statistics suggest that all or most sufficiently trained U.S. workers are getting work in tech if they want it and that international labor is filling the gaps while also holding down wages in a Thomas Friedman-like flattening of wages globally for similar work.

What about women in tech?

Here’s the big secret in growing the tech labor force – hire women.

Well – if you can get them, it’s great for business. Tech companies with women have been shown to use 40 percent less capital and be more likely to survive the transition from startup to established company. (From Cindy Padnos, Illuminate Ventures: “High Performance Entrepreneurs: Women in High-Tech,” 2010.) Nationally, the Department of Labor estimates that our economy will add 1.4 million technology-related jobs to the workforce by 2020; however, at current graduation rates, we’ll produce only enough qualified candidates to fill a third of these jobs. In Colorado, there will be about 4 tech jobs for every 1 graduate with a bachelor’s degree in computing. Recruiting more women to IT programs can at least double the amount of available talent.

Here are some interesting numbers from the bureau of Labor Statistics. (Department of Labor Bureau of Labor Statistics, Current Population Survey, 2012; Dow Jones VentureSource, 2012)

  • 26% of U.S. technology jobs are held by women
  • 20% of U.S. software developers are women
  • 11% of executives at U.S. venture-backed startups are women

Conclusions – if you’ve got a tech labor shortage, then you need to address all three areas. Educate your workforce to be able to do the jobs we need to get done regardless of whether it’s a four year or master’s degree or a six month program. Continue to recruit international labor to fill job gaps. Think about how many foreign students who earn masters and PhD degrees that we’re sending back home and consider where to prioritize immigration policy. Educate, recruit, hire and retain a diverse workforce with gender equality to improve performance and meet talent needs.

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