"It's a Skills Shortage"

Peter Behr

Peter is a business reporter for The Washinton Post and can be contacted at behrp@washpost.com.

A shortage of technology workers has become the biggest single obstacle to continued economic growth in the greater Washington D.C. region. According to two separate surveys, there were about 20,000 tech job vacancies in Northern Virginia early this year and analysts believe another 5000 to 10,000 vacancies exist in suburban Maryland's technology corridors and, to a lesser degree, in the District of Columbia. To some extent these figures are inflated by the competition among tech companies for workers, employment analysts say: Some survey respondents are undoubtedly describing vacancies they would like to fill if they could get the contracts and orders they're seeking. And some of the vacancies follow from the very high rates of churn within the technology sector. But no one close to the issue quarrels with the premise that tech workers are scarce and growing scarcer--posing a threat to the region's economy.

Programming skills are in greatest demand, although the 20,000 vacancies figure is based on a broad definition of tech jobs by researchers at George Mason University in Fairfax that includes both people who create tech products and services and those who use them to a large degree in their work.

The demand is fed by the rapid expansion of the region's technology contractors and consultants who are seeking a piece of government information technology outsourcing and by the growth of a smaller but more vibrant cluster of Internet services companies in the region. Industry analysts estimate that about 40 percent of the $20-billion-plus information technology services and products provided annually to federal agencies goes to contractors along the Capital Beltway. The need for telecommunications networkers and wireless technicians is also great because of the concentration of telecom services companies in the region.

In a recent series of articles about the tech worker shortage, The Washington Post reported that programmers skilled in Oracle software, C++, and Java were in greatest demand in the area. (An analysis by Junglee Corp. of Sunnyvale, California of 628 computer employment opportunity ads in The Post on a typical Sunday this fall found that 21 percent wanted Oracle programmers, 20 percent called for C++, and 9 percent wanted Java skills.) Visual Basic experience is another hot skill.

The urgent need to fix the federal government's extensive "Year 2000" software problem has created a demand for Cobol and Fortran programmers as well. But the skills themselves often are just a starting point. Generally, employers covet programmers with experience in specialized applications, employment managers say. "They have very unique requirements," said Chris Dunne, a senior account manager at Consortium Inc., a technology recruiting firm in Bethesda, Maryland, in an interview with The Post. Federal agencies often aggravate the situation by specifying particular skills and experience requirements, blocking employers from using talented programmers who fall short of these requirements.

In short, the situation is more accurately called a "skills shortage" than a "tech worker shortage." That distinction is most obvious in the ever-present tech job fairs going on around the region. It's common for tech companies to pay a $3000 registration fee, interview 50 to 100 applicants in a two-day fair, wind up hiring one or two new people--and consider the tech fair a success!

There is only anecdotal information on tech worker salaries in the Washington area although employers say that salary levels described in Coopers & Lybrand's national surveys apply here as well. Computer science graduates from top area universities like Virginia Tech are being hired for $45,000 plus and the salaries move up from there. The breadth of the shortage is illustrated by an executive of Merchants Inc., the tire and auto repair chain, who said that starting salaries for automotive technicians range from $30,000 to $50,000. Master technicians, with six years of technology education, can make as much as $100,000 a year, he said.

Bonuses of $5000 to $10,000 have been paid to get skilled tech workers to jump to a new employer. Stock options are another important inducement, giving younger start-up firms an advantage over the larger, established Beltway systems integrators and consulting shops whose stocks aren't volatile. SRA International Inc., an Arlington, Virginia, computer systems company, has paid its employers $10,000 per head for referring successful recruits to the company.

The shortage is already causing some fundamental changes in the way technology is taught. Community colleges are increasing their offerings of one-year certificates for successful completion of a cluster of computer courses requested by employers. One local technology college is offering extensive interactive classes over the Internet. Business and education leaders will ask state legislators in Annapolis to fund a doubling of engineering and computer science enrollments over the next five years. The goal sought by Virginia leaders is more ambitious--a tripling of science graduates. And Maryland's governor will propose that the state provide free tuition to the state's high school graduates who study high-demand technology courses in Maryland universities and then agree to work for Maryland companies for two to four years after leaving school.

Some region leaders are calling, additionally, for a far greater effort by tech companies to train and retrain their current workforce--perhaps with training opportunities linked to commitments by workers to stay with their employer for a certain period of time after the training is done.

There is also a need to give clear, unbiased counseling about tech education to workers seeking to shift into technology careers, some experts say. While tech training courses are prolifering at colleges, for-profit training schools and industry "academies," the quality of these programs varies widely, experts say, hence the need for guidance about the skills industry require of new hires. A pilot program at Northern Virginia Community College will begin this year to offer such counseling.

"The key economic assets in this region are based on human capital, not machines and equipment," said Robert Stough, director of regional analysis at George Mason University in an interview with The Washington Post. "If we can't find better ways to compete for workers, or train them better, we run the risk of missing the boat."

Computing in Kansas City

By Toni Cardarella

Toni is a Kansas City freelance writer who specializes in business- and employment-related issues. She can be contacted at tcadar@aol.com.

Kansas City, Missouri, area companies are scrambling to hire programmers, creating a competitive market for new college graduates, and the demand is expected to continue for the next five years. The area is home to a couple dozen large corporations, including Hallmark Cards, DST Systems, Yellow Freight, and Blue Cross/Blue Shield, each with information technology divisions that employ 400 to 500 programmers.

"The big companies are all in need to replenish what they're losing or to help them grow," says George Waterman, who owns a Kansas City-area employment agency that specializes in placing programmers.

Locally based solution companies, such as Cerner Corp. and Informix Software, need programmers as well. At one recent college job fair in the Kansas City area, there were more than 125 companies recruiting from a pool of less than 100 graduates, according to Scott Biggerstaff, Cerner's senior technical recruiter.

As in other areas of the country, the shortage in Kansas City can be attributed, in part, to the date change-over in the year 2000, which calls for more people trained in the legacy mainframe systems. There is a temporary shortage it seems for programmers who are familiar with old technology, particularly Cobol. The advent of new technology and a decreased number of information technology graduates is continuing to up the demand for object-trained and network graduates.

"Internet and intranet are especially hot right now," says Don Weiss, president of Step 1, a professional programmer training company based in the Kansas City suburb, Overland Park, Kansas. Many companies are desperate to put a browser interface on legacy systems, and skills in Java, database programming, and general Internet knowledge are very valuable for these projects.

In the Kansas City area, annual salaries for entry-level programmers range begin around $25,000 to $32,000 and go as high as $48,000 to $50,000, depending on the size of the company, and the quality of the college, and grades of the graduate.

Seattle: Beyond Microsoft

By Thomas W. Haines

Thomas covers technology for The Seattle Times and can be contacted at thai-new@seatimes.com.

The debate in Seattle these days is not whether the economy is booming, but how long it will stay that way. Fueled by growth at Boeing and Microsoft, the Puget Sound region has generated roughly twice as many new jobs over the past year as other parts of the nation. And nowhere, experts say, is the growth in Seattle as pronounced as in the software industry.

Of course, nearby Redmond and Microsoft set the tone. The company again projects to hire as many as 2000 employees for all manner of positions over the next year. But others, from corporate giants such as SafeCo and Boeing, to Internet startups and web-design firms, promise to keep demand high. Intel, which opened a plant in the town of Dupont in 1996, is continuing to staff up toward a projected total of more than 6000 employees.

Around here, career decisions for qualified software engineers are measured by the number of job offers in hand. Senior people are known to skip around the Internet firms of downtown Seattle the way colleagues meander companies sprinkled through California's Silicon Valley. Stock options are common. And, according to at least one survey, pay is high. Companies large and small advertise for an array of technical skills, including experience with C, C++, Visual Basic, Pascal, SQL, Java, and ActiveX.

A report issued this year by the American Electronics Association determined Washington state's high-tech workers get paid, on average, more than anywhere else in the nation. Washington's average pay: $57,555 a year. The report noted that the figure is higher than other areas because most high-tech jobs here are in the software side, rather than manufacturing.

The number of high-tech jobs in the state is also growing, according to the study. Between 1990 and 1995, the state added 18,516 jobs for a total of 78,920, a 30 percent increase. Of those jobs, 29,600 are in software and computer services; 21,500 in telecommunications services. One local forecast predicts the growth trend will continue, with more than 3000 computer-related jobs added next year. Overall, though, the number of jobs here still trails other developed tech centers, including Silicon Valley, Texas, and Massachusetts. The state of Washington ranks 18th in total high-tech employment.

Utah: More than Just Mountains

By Lisa Carricaburu

Lisa is a business reporter who covers the IT industry for the Salt Lake Tribune. She can be reached at lisac@sltrib.com.

In Utah's fast-growing information-technology (IT) industry, people capable of writing code are so scarce that those who can are able to write their own job descriptions and salary profiles.

In fact, Salt Lake County government's IT operation has experienced such difficulty recruiting and retaining qualified programmers and systems administrators that the County Commission recently considered drafting a policy that would require new hires to commit to their jobs for two years.

Unable to fill numerous openings for web developers and other programmers at a planned microchip-testing facility in Lehi, Micron Technology human resources manager Brad Mabe staffed an exhibit at COMDEX/Fall in Las Vegas for the express purpose of recruiting potential hires from outside Utah.

"We are hiring programmers as quickly as we can find them," said Kathi Teigeler Alder, director of sales and marketing for Vitrex, an Ogden-based software and network consulting firm. "The scarcity of human resources is the one thing that can limit our growth."

Like many Utah IT firms, Vitrex consistently has openings for AS400/RSG, Cobol, Oracle, and C++ programmers -- positions for which the company's salaries vary with experience but are in the $60,000 range.

"Like everyone else, we have to pay top wages and good benefits to recruit and retain people," she said.

Overall, unemployment in Utah is lower than it has been in more than four decades. The state's jobless rate for all of 1997 likely will be 3.2 percent, a low the state has not experienced since 1952, said Ken Jensen, Utah Department of Workforce Services (DWS) chief economist.

Bolstered by small enterprises as well as by large firms such as Provo's Novell and Roy's Iomega, the IT industry is among the state's best new job producers, said Peter Genereaux, Utah Information Technologies Association (UITA) CEO.

UITA counts 1870 IT firms in Utah employing 38,971 workers. The organization's annual survey of the industry shows employment increased 12 percent from 1995 to 1996.

In addition, the UITA survey predicts 50 percent job growth in the industry in the next three years, with employers saying the job positions that promise the greatest growth are hardware and software development, customer support and systems development, operations and maintenance.

More immediately, Genereaux said many Utah firms work on Year 2000 problem fixes, and are desperate for Cobol programmers. Oracle, C++, Visual Basic, and Java programmers also are in high demand, as are certified Novell NetWare and Microsoft Windows NT professionals.

"Some qualified Oracle programmers are commanding salaries in excess of $100,000," he said.

IT professionals are among the best-paid workers in Utah.

U.S. Department of Labor data for the Salt Lake/Ogden area, for example, puts the average hourly wage for programmers at $17.00 and the average hourly wage for systems administrators at $25.00, said John Mathews, a DWS labor-market economist.

UITA figures show Utah's overall average wage at $23,628 in 1996 compared to $38,724 for IT professionals. The highest-paid positions, Genereaux said, are in the areas of software development and programming and in sales and marketing.

And salaries will only increase with the labor shortage, he said. That presents a particular challenge for businesses outside the sector, which often do not have the resources to pay the wages qualified workers command.

The challenge has led to a number of government initiatives.

The Utah Information Technology Commission, for example, has sent letters to the state's universities and technical training centers asking for help to enlarge the pool of job candidates. The group also is asking the Legislature for $1 million to boost salaries paid to IT workers. "It's a serious problem that we're all trying hard to fix," Genereaux said.

Filling Silicon Valley's Appetite for Programmers

By Paula Harris

Paula is a reporter for the Sonoma County Independent. She can be contacted at pkvella@aol.com

The hub of software development once defined as "Silicon Valley" is steadily mushrooming into the entire San Francisco Bay Area -- from the small, upcoming companies in the city's South of Market area, to the large data centers in the East Bay, to the burgeoning telecommunications industry in the North Bay's Petaluma and beyond.

However, the local demand for high-caliber employees is much greater than the supply as technology is growing faster than the local talent pool. An Internet browse through Bay Area company job banks will reveal hundreds of positions open in the local high-tech arena.

Talented software engineers with experience developing web-enabled applications are in the shortest supply. Specifically, Internet applications raise a myriad of security and performance issues which challenge both the technologies and the engineer.

Java is currently the hottest programming language, particularly for developing these web-based applications (C++ is now playing a lesser role). In the backend database arena, Oracle is the predominant technology for distributed systems.

Cobol is in high demand to deal with the infamous Year 2000 conversion, and companies are exploring creative measures to retain programmers with mainframe/Cobol expertise.

Because the pay tends to be higher, there is a trend for contract consulting, but as companies realize they still need an infrastructure of talented people internally, stock options and wage increases are becoming common incentives.

Salary ranges for senior software engineers with only three years experience start around $70,000 per year increasing to up to $125,000 per year for highly specialized people. Consultancy fees are rarely below $75.00 per hour, which most Bay Area senior software engineers demand as a minimum.

Still, many new employees have little loyalty to companies; "jumping ship" every year or less is a common occurrence. A number of companies are filling positions with people from outside the region and the U.S., luring employees with lucrative relocation packages including visa sponsorships.

Future-thinking companies are beginning to offer comprehensive education programs to keep people current with the technology in an effort to retain their employees.

Constance Grizzell, president of CastleRock Technology Inc., a Sausalito-based high-tech recruitment agency says employees are beginning to rank location on a par with salary. "In order of importance are first the actual work, second the company's culture, and third and fourth together are location and money," she says.

As the densely packed South Bay and East Bay become a commuter nightmare with limited affordable housing, employees and companies are looking toward the North Bay as a rural alternative. Companies and recruiters are successfully using the Wine Country lifestyle as a selling tool to bring new employees into "Silicon Vineyards."

In addition, even old school managers are starting to see the critical need to add flexibility into people's work schedules. Telecommuting from home or from satellite offices in suburban areas is common -- even managers who previously had to be on-site are learning new technologies to manage remotely and build a sense of teamwork from afar.

Texas: The Sky's the Limit

By Omar L. Gallaga

Omar is a technology reporter for the Austin American-Stateman. He can be contacted at ogallaga@statesman.com.

The exploding high-tech industry in Central Texas has created a huge demand for programmers in the area, one that isn't being met, experts said.

Austin and its surrounding areas are home to Dell, Motorola Semiconductor Products Sector, AMD, Tivoli, Dazel, and many other companies that are in constant need of workers who are skilled in C, Java, Visual Basic, and web programming skills that involve HTML and ActiveX.

Naomi Lyons Friedman, owner of Access Hi-Tech Austin, a consulting firm, got to know the market for programmers when she did job hunting for her husband, now a senior engineer at Symtx.

"There's a shortage of people who have all the right background and the right skills," Friedman said. "There's just not enough programmers to fill the slots that are out there."

The Greater Austin Chamber of Commerce and Austin Community College have taken measures similar to their efforts to build a chip industry workforce in the area. ACC has continued adding programming classes and the Chamber has tried to corral smaller software companies to join its efforts in workforce development.

Some companies have taken to hiring on nonprogrammers and putting them through intensive four-to-six month courses. Even local high schools have gotten into the act, expanding their curriculum to give students an early start toward high-tech careers. Despite those efforts, many companies are still recruiting workers from Silicon Valley, the northeast and from other countries. Brian Massey, a vice president at SoftReality Inc., said he's seen a lack of headhunters in the area and few ways for small firms to track down the skilled workers they need. "It seems like personal networks are the only way to track these people down. We see people coming out of the universities, especially the University of Texas, looking for $40,000 a year with no experience."

Companies who are looking for programmers and the programmers who job hop have created a cottage industry in Austin. Small firms like Friedman's Access Hi-Tech, Austin's HireTech and several temporary staffing firms have thrived by putting together companies with hard-to-find technical workers.

Massey's companies, which does customized software development on an outsource basis, looks for people with strong C and Windows skills. SoftReality also scouts out for programmers who know Visual Basic and database applications.

Cerise Blair, executive director of the Austin Software Council, said the need for programmers extends to areas beyond software development. Chip companies and practically any firm that uses computers need workers with programming skills, she said.

"The computers companies are using now are so complicated, it very often takes a professional to keep the networks running and to keep programs they've designed running," she said. The demand is so large, programmers who have the right skillsets can name their asking price, Blair said.

"The sky's the limit for these workers," she said. "It's definitely an employee's market."

By Catherine Reagor

Catherine is a business reporter for The Arizona Republic and can be contacted at jcreagor@aol.com.

Phoenix, Arizona, recently garnered the nickname "the Silicon Desert" because of the many technology firms it has attracted in recent years. But with the city's record low unemployment rate of 2.5 percent, the term is also indicative of how dry the well is for employers in the city -- especially information technology professionals and computer programmers.

"Phoenix's job market is so tight for technology workers that companies are escalating salaries and offering all types of perks to land skilled people," said Charlie Balchumas of the staffing firm Source Services. He went on to say that some Phoenix firms have had to expand their search into regions as far north as Canada just to find programmers.

As in other parts of the country, Phoenix technology firms are raising salaries and offering signing bonuses to attract the people they need, particularly to meet their computer needs for the problems the year 2000 will bring.

Graduates with associates degrees in computer information systems and electronics from DeVry Institute of Technology in Phoenix are being enticed with signing bonuses of as much as $3500. ADFlex Solutions, a Phoenix-area circuit maker, pays its employees referral bonuses of $150 for each person they recommend who is hired and stays with the company for 30 days. Another Phoenix firm, Microchip Technologies is paying signing bonuses of nearly 20 percent of a base salary. The company is expanding and adding another 2000 jobs at its Phoenix operations.

AG Communications Systems, which makes telecommunications equipment, opened a daycare center and a gym for employees and their families.

To draw computer programmers and other software and technology workers from California, Phoenix firms are matching the pay found in Silicon Valley. The average pay of a mainframe analyst in Phoenix is $49,000 a year, compared to $50,000 in San Jose, according to a national survey done by Source Consulting. But the cost of living is much lower in Phoenix.

A computer programmer just out of school can expect to earn about $37,000 in Phoenix. Escalating pay has caused some Phoenix technology firms to pause, but they have anted up to get the programmers, consultants, engineers, and systems managers needed to keep pace with the rest of the industry. Economists forecast that at least 5000 technology jobs including computer programming and development positions will be created in Arizona during the next few years.

The state is one of the fastest growing in the country with a record number of firms growing and expanding there during the past several years. And many of those firms are clamoring for more information technology workers.