New rules for IT staffing
Companies seeking affordable IT talent say they face a ‘skills shortage’
- November 29, 2012
Demand for qualified IT professionals is soaring, according to Jennifer Ludvik, director of staffing sales at IPC Technologies in Richmond. Currently, her firm’s 2012 billings are 18 percent ahead of money spent on computer science workers in the late 1990s during the chaotic run-up to the “Y2K” computer conversion.
Even so, she says, her clients can’t fill all the positions they have available for IT workers proficient and experienced in project management, mobile business-to-business (B2B) and business-to-consumer (B2C) applications, advanced web development, the ubiquitous SAS business analytics and development software and the widely used .Net Framework (or “dot net”) tool developed by Microsoft, which is used to enhance website graphics and secure online communications between companies and their customers.
Ludvik says there are plenty of opportunities for experienced, qualified workers who prefer to be independent subcontractors but far fewer positions for that same caliber of IT specialist looking for a full-time job with an attractive base salary and benefits. “Companies are very optimistic about the future but not enough to [spend what it takes to] bring in additional headcount,” she explains.
Rodney Ashby, the head of the Cornerstone RPO staffing firm, also based in Richmond, agrees. “There’ve been more IT jobs than talent for a long time now, and during the last 18 months that’s continued to grow,” he says.
Before the Great Recession of 2007-09, companies used to spend freely for all the IT talent they needed, but that’s no longer the case, according to Ashby. He says that salaries for all but the most qualified and experienced developers are “stagnant or maybe even a little bit lower” than they were in the mid-2000s.
“I think it’s a little bit of both” a skills shortage and a money shortage, he explains. “My clients say, ‘Hey, I’m a little scared to spend that kind of money right now. I don’t want to be in the same place I was 24 or 36 months ago where I had to lay people off.’”
Sounding a similar note, TECHEAD founder Phil Conein, a veteran of the IT staffing and training business since the late 1980s, says he’s on the lookout for specialists in programming languages like Java and Java Script, C# (C-Sharp), User Experience Design (UXD or UED) and an array of mobile computing applications that companies are using more and more to conduct marketing, customer service and e-commerce transactions on mobile devices.
Professionals with these skills, a few years of experience and a solid track record can command a base salary at a large Fortune 500 firm of between “$80,000 to more than $100,000.” he says.
Smaller firms that can’t afford those kinds of salaries would be smarter to outsource their IT operations to staffing agencies or individual independent contractors, Conein says.
“Yes, there’s a high demand for IT skills at all levels. Yes, younger workers don’t have the combination of skills and experience that older workers have. Yes, there is a shortage [of both highly qualified and experienced IT workers], but it has much more to do with what [companies] want to pay,” he explains. “When people say they’re facing a ‘skills shortage,’ what they’re really saying is that they’ve got a money shortage. It’s most definitely a money gap more than a skills gap.”
Government data and industry surveys confirm the shortage of available IT workers.
The U.S. Bureau of Labor Statistics (BLS) said in a recent report that IT employment increased by 86 percent between 2000 and 2010. Nonetheless, the number of computer science degrees awarded by U.S. colleges and universities plunged by 35 percent between 2006 and 2010, according to the Washington-based Computing Research Association (CRA).
The Troy, Mich.,-based Kelly Services Inc. staffing agency, in a report released earlier this year, said that 63 percent of IT managers it surveyed think that a growing shortage of IT talent would have a negative effect on their organization.
However, the shortage of fresh IT personnel may be ending. The CRA’s most recent annual Taulbee Survey of U.S. higher education centers indicates that the number of bachelor degrees in computer science rose by 10.5 percent in the 2010-11 academic year, and that computer science enrollments across the nation rose by 11.5 percent in 2011-12, the fourth straight annual increase.
Undergraduate computer science enrollments fell in the years after the infamous “dot com bust” of 2000-2001 when thousands of startups closed their doors in a matter of months and the profession’s immediate future seemed bleak. They’ve rebounded dramatically with a new generation of college students who can hardly remember a world without smart phones, text messages, hundreds of Facebook “friends” and Google searches.
Beyond competitive salaries and benefits, another crucial challenge for IT hiring managers and chief information officers is the long-term attractiveness of their companies to the newest generations of IT graduates. Firms that don’t spend enough to upgrade their IT systems won’t keep the workers they have or get the new ones they need at any price, Ashby says.
“Technology probably does the best job in forcing everyone to constantly work on their trade, to improve their job skills, so they’ll be ready for the next opportunity … Good people don’t want to work on old technology. Circuit City [the now defunct Richmond-based electronics retailer] was an example. No one wanted to work on that stuff.”
Additionally, with workplace satisfaction such a high priority for younger workers, HR departments seeking the IT talent their companies will need to compete and survive may have to rethink the jobs they offer.
That same Kelly Services survey reported that 70 percent of IT professionals who responded said they preferred to work remotely, outside a cubicle or workstation in a traditional office environment; 55 percent said changing employers is key to their career and professional development, and 65 percent said they planned to look for another job within the next 12 months.
Melisa Bockrath, Kelly Services’ IT operations chief said in an October interview with TechTarget.com, that the hiring challenges facing chief information officers (CIOs) in 2013 will be to create an inviting work environment. “You have to reinvent yourself a little bit. The younger generation is not looking for the employer who’s going to give them job security for the next 30 years. They’re looking for cool places to work on some of the latest and greatest technologies, and they want to work with people they like.”