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Personal Finance
IT worker shortfall
April 20, 2000: 6:25 a.m. ET

New report finds half of all information technology jobs may go unfilled
By Tatiana D. Helenius
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NEW YORK (CNNfn) - Information technology (IT) managers these days have something new to worry about: an embarrassment of riches in technical jobs and a rapidly dwindling list of skilled workers to choose from.
    Some 1.6 million IT jobs will be advertised throughout the United States this year, but the talent pool to draw from has become a bit shallow. A study by the Information Technology Association of America (ITAA) forecasts that roughly half of these positions -- 843,328 - - will go unfilled, due to a dearth of qualified applicants.
    graphicIn a total U.S. IT workforce of 10 million, that shortfall means that one job in 12 will remain vacant. Even more troubling, the study does not reflect job demand in government, not-for-profit organizations or small entrepreneurial firms. High-flying dot.com companies beware: in the "new economy," with IT gurus at a premium, employee poaching is becoming commonplace.
    "The shortage of IT workers has changed the nature of the position of HR (human resources) director, for one, because employee retention has become almost an overwhelming issue," said ITAA President Harris Miller, "Companies might have seen a 10-to-12 percent turnover rate a few years ago, if lucky -- the turnover rate is now more like 20 percent plus. People are stealing employees from one another left and right, and employee loyalty, frankly, runs only as deep as what the company can offer."
    graphicTimothy Dittrich, the North American managing director for job search site Monster.com, has seen the trend in action himself. He has seen not only the rise in IT positions being handled by the job site, but the tightening supply of applicants available to fill IT positions at Monster.com itself.
    "Our entire staff has doubled over last year, we had 60 technical staffers last year, some 130 today, and we're still trying to fill 50 open positions," said Dittrich. "We're not alone. Every business out there is scouting for IT talent. The shortage is a reality."
    
Offering perks

    IT staffers with the necessary skills are often tempted to log out of their 9-to-5 day jobs and become job-hopping free agents, picking and choosing projects by contract. It's a viable lifestyle, said Dittrich, as the skills-for-hire set is in demand. The specter of a massive worker shortage has launched a phalanx of contract IT headhunters into the fray.
    "Talent is definitely a commodity," said Dittrich, and if an employer is not helping employees to upgrade technical skills, or to stay current with cutting-edge projects, IT folks with current skills may head for healthier pastures.
    IT savvy can have a limited shelf life, Miller pointed out, saying "an IT staffer is going to want to know that their employer cares about helping them upgrade their skills, they want to be confident that the assignment they are working on today is not their last assignment."
    Permanent part-timers along for the long haul are rapidly becoming a part of the IT landscape also. "Maybe someone has crackerjack skills but can only work 20 hours a week," said Dittrich. "In this environment, some company is still going to grab that individual."
    IT managers on the lookout for skilled job-seekers may bypass corporate headhunters altogether, and offer stiff rewards to employees for ferreting out top-notch talent.
    "We're not talking $250 any more," said Dittrich. "Some are staking more like tens of thousands on finding skilled IT people through current employees. Now, that may seem excessive, but in reality, companies save time and money -- and gain in quality. After all, no one is going to refer a slouch, as that would reflect badly on them."
    graphicAlthough monetary compensation, paid training, and tuition reimbursement are solid attractions, these are not the only draws used by IT managers hunting for skilled workers. Some offer such perks as tuition reimbursement, casual dress environment, a free buffet, flex time, and the option of telecommuting.
    Others are getting even craftier, roping in dedicated talent by addressing lifestyle issues. These include a larger work space, day care, gym privileges, dry cleaning or grocery-shopping services, free tax preparation services, discounted vacation packages, or even allowing pets at the workplace.
    
Non-IT firms feel strain

    The ITAA study is among the first to concentrate on both IT and non-IT firms. The results were based on 700 telephone interviews with IT managers at both IT-specific and non-IT firms, IT firms being defined as companies who create and sell commercial IT solutions to customers, and non-IT companies as firms that merely use IT solutions in daily business operations.
    graphicThe largest segment of the economy -- smaller non-IT firms -- reported the greatest demand for IT workers, according to the ITAA study. Companies with 50 to 99 employees need one million IT workers next year, representing 70 percent of the total demand for all new IT employees. This group also reported the highest skills gap, with managers at these firms reporting the greatest difficulty in finding qualified applicants.
    Technical support representatives, database developers, system administrators and programmers were rated the three most in-demand careers in the IT field. Workers with Web-related skills were found to be the target of 13 percent of all IT hiring.
    graphicTechnical support and network administration positions will account for some 50 percent of all new IT jobs, with database development and software engineering positions representing 20 percent of new positions. Skilled technical support staffers, in particular, are in short supply at both IT and non-IT companies, with tech support jobs representing one-third of all new positions over the next 12 months.    
    
Legislation proposed

    Alarmed by a potential IT worker shortage, U.S. legislators -- including Reps. David Drier, R-Calif., Jim Moran, D-Va., Jennifer Dunn, R-Wash., and Anna Eshoo, D-Calif. -- have introduced a bill calling for a loosening of caps placed on visas for highly skilled overseas workers. The bill calls for boosting the number of visas available in 2001 to 200,000, from a current allotment of 115,000. It also seeks an increase in funding for technology training programs in the United States.
    graphicThe ITAA, while supportive of the bill, expresses some concern that the measure is not a solid solution to the impending problem. "We think this is part of an acceptable stopgap measure, but we believe the major focus should be on training the U.S. work force -- that is the only effective long-term solution," said ITAA's Miller.
    The high level of vacancies in IT may be somewhat assuaged by an influx of trained workers from outside the U.S., said Miller, "but this initiative is really only a Band-Aid for the problem. Depending excessively on outside workers poses a serious risk to the potential the U.S. has for future leadership in technology."
    Fueling the problem is the fact that the number of U.S. students pursuing technical degrees has leveled off in past years.
    Federal Reserve Chairman Greenspan acknowledged the problem in a speech last week to the U.S. Department of Labor's National Skills Summit in Washington. "Certainly, if we are to remain preeminent in transforming knowledge into economic value, the U.S. system of higher education must remain the world's leader in generating scientific and technological breakthroughs and in preparing workers to meet the evolving demands for skilled labor," said Greenspan.
    This year's ITAA study was sponsored by Cisco Systems (CSCO: Research, Estimates), Cyborg Systems, Microsoft Corp. (MSFT: Research, Estimates) and Oracle Corp. (ORCL: Research, Estimates), among others. Previous ITAA work in this area had focused on the dimensions of the IT work force shortage alone. A study conducted in 1998 found that one out of every ten "core" jobs was vacant.
    With the shortage of skilled IT workers on the verge of becoming acute, IT managers may have to add rampant creativity to their cache of talents.
    Booths manned by recruiters and IT managers are standard sightings at college campuses on job fair days, acknowledged Monster.com's Dittrich, "but we are pretty close to seeing people targeting high schools. It hasn't happened yet, but I wouldn't be surprised to see this get to the scholarship level;  i.e., 'You get great grades in trig, algebra, calculus, (and) we'll put you through school, if you sign on with our company'. We're seeing companies getting their name -- it might be Microsoft, or Dell, or Compaq, whomever -- in front of students by donating computers to various departments.
    Of course, admitted Dittrich, "there are pros and cons to that particular approach, but given the labor shortage, there are no bad ideas." Back to top

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Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.