Published in Texas CEO Magazine on June 21, 2014
SKILLS GAP IS HURTING TEXAS BUSINESSES
By James Thompson
Graduation season is here and the majority of college grads will likely not look for jobs in information technology (IT) because they have neither the interest nor aptitude. This is a reminder of a major issue facing Texas businesses – too few experienced and qualified IT professionals.
This should matter to Texas executives because it is putting a damper on job growth and economic expansion in our state and across the country. Without qualified and skilled IT specialists, few companies are able to expand, innovate or increase productivity. Three pervasive factors are contributing to this shortage: lack of STEM education, an artificial limit on H-1B visas and the retiring baby boomers. This troika of limitations has created an unprecedented demand for a dwindling supply of skilled IT professionals. Texas is worse for this skills gap.
Yes, the state’s economy is healthy, but we Texans can’t ignore that we are participating in a global economy driven by science, technology, engineering and mathematics (STEM). A joint study by the database STEMconnector and the website My College Options found that 60 percent of American students start high school with an interest in STEM subjects and/or careers but a large number fall away before finishing school.
The Organization for Economic Cooperation and Development indicates that Americans are trailing other developed nations in children obtaining a higher level of education than their parents. This means young Americans aren’t pursuing education as aggressively, which will have consequences for U.S. competitiveness and will make skilled IT workers even scarcer in the years ahead.
No, not all high school and college graduates should be expected to be physicists or software developers, but we are doing them a disservice if they aren’t STEM-literate. Their education should prepare them to function in a knowledge-based workplace where they are able to competently analyze data and solve problems in a digital world. The option is leaving them prepared only for low-wage, non-skilled jobs with no future and no hope of contributing to American competitiveness.
A 2013 report for Compete America – a coalition of companies, universities and research institutions – has documented that workers born outside the U.S. account for 20 percent of today’s STEM workers with bachelor’s degrees and 40 percent with advanced degrees. These percentages continue to rise.
April Fool’s Day played a joke on the American economy again this year. April 1, of course, was the deadline for next year’s H-1B visa applicants to try their luck at the lottery for one of the 85,000 slots, a woefully inadequate number. Businesses use H1-B visas to employ non-citizens for jobs that require specialized training and/or experience. Most years, the demand outstrips the quota by a wide margin. This year was no exception as the process shut down on April 7 because of the strong response.
Allowing these skilled workers into our country does not take jobs away from Americans – it creates jobs for Americans. Many companies just don’t hire if they can’t find the appropriate skilled talent, yet the right IT person can unlock potential within a company that results in creating other jobs.
The 2012 report Jobs for the Future examined the IT job market in 2011 and discovered that about 177,550 jobs were open annually. It found that, no surprise, California had the most IT job listings with 15 percent of the nation’s total. Second on the list was Texas with seven percent and three Texas counties were in the top 20 nationwide for the most listed open IT jobs: Dallas (no. 7), Harris (no. 13) and Travis (no. 19).
That demand is only going to grow as about 10,000 baby boomers reach retirement age daily. The boomers are the largest generation this country has known to date – 76.4 million of them were born between 1946 and 1964. They are estimated to make up 34 percent of U.S. adults, a big chunk of the 314 million Americans. Therefore, a lot of experienced workers may be saying farewell to their jobs soon, contributing to the scarcity of needed IT talent.
CIOs should start planning immediately for a potential baby boomer exodus by giving incentives to keep experienced workers on the job longer and simultaneously identifying younger candidates who can be mentored to potentially take over in a few years.
CIOs (and CEOs) should start having conversations with their local education institutions to provide real-world input about the technical and analytical skills needed for today’s IT jobs. Some Texas companies have already started doing this. Many business leaders are critical of the U.S. education system’s failure to prepare students for a technology-driven global economy in which they’re competing against young people in other countries who are beating our students on standardized math and science tests. They’re concerned because lack of STEM education translates into lack of key talent.
How to Cope
There are some things hiring managers can do to cope with this shortage. First, don’t expect candidates to have all of the qualifications needed. For example, Java skills are in high demand and low supply. Instead, hire the smartest people available with the greatest number of skills needed. Then reconfigure the job responsibilities to match the candidate’s strengths and provide training for the missing skills.
Second, hire quickly. There is no time to wait for bureaucratic approvals or for someone stronger to appear. The perfect candidate doesn’t exist.
Third, be competitive with salary offers. Salaries will vary based on a variety of factors, such as experience, education, skills set and company needs. Recognize that if some current employees are being paid under-market, managers may be reluctant to bring in new talent at compensation levels that are close to or in excess of that compensation. Realize that candidates should never be rejected for this reason as someone else will hire them. Get creative with perks and bonuses to provide extra incentives. Once the right talent is hired, employers need to worry about keeping new workers happy and performing optimally with an environment as attractive as possible. Look west to Silicon Valley for ideas – flexible work schedules, part-time positions and job-sharing are options to consider.
Also think about recruiting as a long-term, ongoing process. Intern programs are beneficial ways to give students valuable work experience and IT department the opportunity to identify future employees. By starting relationships with young talent early, companies can instill loyalty and create a steady supply of candidates. One last word of caution – CIOs can’t afford to delegate responsibility for recruiting IT talent to another department. The more removed and detached from the process, the more they will feel the pain of the skills gap. For prime effectiveness, CIOs must control the process.
James Thompson is the CEO and president of The InSource Group, a technology staffing and placement company with offices in Dallas, Fort Worth and Houston. He can be reached at JT@insourcegroup.com.