Receive daily articles & headlines each day in your inbox with your free ERE Daily Subscription.

Not logged in. [log in or register]

No, We Actually Don’t Have a Shortage of Technical Talent

by Jul 26, 2013, 6:11 am ET

There have been ongoing debates for a decade or more over whether or not there is a talent shortage. If there were a real talent shortage we would have seen much different corporate behavior than we actually do see. If firms genuinely could not find the people they needed, they would have either raised wages to the point that the jobs became highly attractive or they would have invested significantly in training. Neither has happened.

While I have no hard data, my experience and that of colleagues seem to agree that there has actually been a cut back in technical training and in internships (that are often used as a way to train or provide experience to younger potential workers.) Salaries are a great predictor of desire and demand, but no one has recorded a large increase in pay for STEM graduates or experienced help. The supply has obviously been adequate to meet the demands of most organizations.

Yes, in some cases people are working more than they used to because there are staff shortages. But again, these are economic decisions, not supply issues. It really is not quantity that is important, but quality and the ability of the fewer engineers and scientists to use automation and computers to make themselves more productive.

There are many non-practicing engineers in the workforce who have chosen not to be engineers because they can earn more money doing other things. Many scientists eschew corporate life and choose academic life instead. Technicians have become scarce because potential workers realize that the jobs they do are not well paid and they work long hours, sometimes in harsh conditions with little gratitude.

The New Economy — From Hardware to Software

What has been happening is a transformation of the workplace. We are shifting from a world where the glory was in hardware — making, building, and inventing machines and tools — to one of design and software.

Most firms in the United States and Europe do not make anything directly. They are innovation and design centers, neither of which need or use large numbers of engineers, scientists, or technologists. Apple prints on the back of every iPhone “Designed by Apple in California. Assembled in China.”

Apple and other firms depend on a rather eclectic group of talent — people who make up a large portion of what Richard Florida has called the Creative Class. These are writers, designers, artists, anthropologists, software programmers, and the like. Silicon Valley is full of these folks. I belong to group of them called NextNow which is a global network of a few hundred people who are mostly what would be called bohemians. One invented Hypertext, another the term e-learning. Some do research, some write books or make movies, some have a technical background, but it’s not how they earn a living.

Many of these people do not have a college education and are self-taught or they apprenticed with a master or studied something very different from what they do.

The New Worker

The manufacturing portion of work is done more and more by automated tools and software or by robots. It does require engineers and technicians to build these, but far fewer than in the old economy. And, they are aided by all kinds of automation. For example, architects can work essentially alone these days. Yet, Frank Lloyd Wright had scores of draftsmen drawing plans and clerks and technicians reproducing blueprints as well as apprentices. Today a CAD machine, coupled to building code information and material specifications, does it all.

Similar reductions have occurred in almost every field from civil engineering to the semiconductor industry.  Automation has supplemented engineers, reducing the need for them and driving efficiency. Automation is entering the hospital, the surgery, and even the school with the advent of MOOCs that allow education to be distributed from one professor to thousands.

The new economy growing around us needs and uses a very different type of worker. The new generation of worker has a broader base of skills and knowledge than any previous generation. Many of them will not have gained this by traditional education (after all, around 66 percent of men who start university never finish with a degree.) They will have learned most of it by themselves through the Internet, from television, from travel, and social media. They are experimenting, being entrepreneurial, and exploring more than most other generations.

Corporations are not their natural home nor is corporate life their natural lifestyle. They are more likely to pursue self-employment or work for a small firm where the atmosphere is collaborative and there is open communication. A few larger firms such as Google and Zappos are willing to hire people with no degrees, but with passion, interest, and life experience. They invest in mentor-based training. They put them into situations where they are forced to learn rapidly. They have large portions of the workforce who have chosen to work as temporary staff or on a contract.

Talent Shortage or Not?

Absolutely not! We have an abundance of talent — wonderful, creative, and entrepreneurial folks who are already using their skills to create a new world.

We need to stop thinking about yesterday’s work world and imagine tomorrow’s. We will not need thousands and thousands of engineers, scientists, and technicians.

Most of these young people will do amazing things — invent more companies like Facebook, Google, Amazon, and Zappos. They will work often in partnership with a robot or a piece of automated software. Our economy has already moved in this way with more of GDP coming from services than from manufacturing.

Encouraging thousands of young people to pursue a STEM degree when their hearts are leading them elsewhere is a tragedy.

This article is provided for informational purposes only and is not intended to offer specific legal advice. You should consult your legal counsel regarding any threatened or pending litigation.

  • http://www.cachinko.com Felipe Villasenor

    Companies today are always looking for the proverbial purple squirrel and when they don’t find them immediately or cheap enough, they say that their company needs to sponsor an H1-B visa or they lobby Congress for more visas. However, it is already happening where companies are struggling to find more affordable talent overseas. As this happens, it’s back to identifying the brilliant idea of training current talent to save money. In the end, we can’t blame companies for legally importing cheaper talent because by nature they seek cold profits. However, we don’t have to accept their ploys that there is no STEM talent left in America either. -Felipe

  • Robert Dromgoole

    Well, true, there are more than likely enough capable people out there. But many won’t relocate, change jobs etc.

  • http://www.grmsitc.com Howard Berger

    Not sure where Kevin Wheeler gets his info, but there is a significant amount of technical positions open with very limited resources. Linked-in has on just one group with 1200 PM positions available. Any average board shows large numbers of positions unfilled. Why? Because of the lack of proper training and possible education cost issues. Probably one of the major reasons why H-1b hires are still prevalent. The market is fairly strong on technical pro’s and often they can command higher than average salaries,especially in high traffic area’s like NY,CA,TX. Like to have Kevin find people I am searching for on a daily basis along with several other recruiters on my team. Abundance of talent? Not in the real world.

  • http://ianmartin.com/ G Forse

    So the talent exists out there in abundance…isn’t the “talent shortage” really more about companies being able to procure it? From what you have written here, it seems to me that all these talented individuals don’t want to work for someone else!

  • Kevin Wheeler

    Howard,

    I understand every recruiter’s frustration with finding technical talent. BUT, I contend that the issues is not that there are not enough of them out there. The bigger issues is the narrow and often ridiculous skills and experience requirements firms are asking for along with the unwillingness to pay higher salaries. And this does not even come close to taking into account the age bias that exists. Most firms I have had experience with want a skilled technical person, with precisely relevant experience, that is in the age range of 25-45. Anything outside of that is much less desirable and usually not even considered. There is very little willingness to train or to use older talent. H1-b employees are relatively cheap and young and require much less in the way of benefits, TLC, etc. The shortage is self-inflicted to a large degree.

  • Kevin Wheeler

    G,

    Yes, many talented technical folks are choosing not to work for established companies because of bureaucracy, inability to make a difference, low pay and numerous other reasons. Entrepreneurship is highly valued and many are trying to start there own firms. Also established firms and recruiters will not consider self-taught individuals, of which there are a large and growing number. Many software developers, designers, etc. are self-taught but highly skilled. Almost two-thirds of men are not finishing university but still able to create their own firms and develop software, invent products, etc. The really skilled talent is most likely not looking for a corporate job.

  • http://eagleonline.com G Forse

    …so in this context, there is still a talent shortage, from the perspective of these companies, as “talent” should be defined by those companies as both able AND willing…not to get bogged down in semantics :-)

  • http://www.kerpartners.com Mitch Heinemann

    I completely agree with your point Kevin that there is no real “talent shortage” as company’s have outlined the playing field-i.e. pegging compensation ranges below levels that would attract plenty of talent for their needs. I do feel for internal recruiters because most of the time their hands are tied compensation wise and they have to just deal the pressure from hiring managers.

    I don’t agree that high school kids should not be pushed towards “STEM” degrees. It’s not that I expect them all to directly use their degrees but the critical/process thinking skills they develop are very attractive (to my clients) no matter what field they ultimately go into.

  • Keith Halperin

    Thanks Kevin. I do think it would be useful to have more people working in what I call SMEETH areas (Science, Medical, Engineering, Education, Technical, Health), and by working to create higher status and greater pay, benefits, etc, you’ll be able to encourage some additional people to go into these areas.

    There is ALWAYS a shortage of “excellence on the cheap” which is what the soc-called “War for Talent” is really about.:

    Here’ are some numbers:

    As to the future supply and demand, this is the big picture as drawn from data from the Bureau of Labor Statistics (on future job openings) and from projections drawn from Department of Education and National Science Foundation data (on high-tech degrees likely to be awarded to U.S. citizens and green card holders in the decade to come).

    Comparison of Projected BLS Job Openings Data, 2010-2020, with a Projection of NSF and DoE Data in the Same Time Period on Degrees Earned b yCitizens and Green Card Holders in the STEM Fields (Architecture and Social Sciences Excluded)

    Projected STEM job openings over 10 years: 2,537,000

    Projected STEM earned degrees by citizens and green card holders over 10 years:
    Associate’s: 440,000
    Bachelor’s: 2,652,000
    Master’s: 569,000
    PhDs: 258,000
    Total: 3,919,000

    Ratio of projected degrees to projected job openings: 1.55

    The table above deals with the future. Meanwhile, the Economic Policy Institute recently released a comprehensive study dealing with the supply and demand of STEM graduates showing similar findings in the immediate past. One of its findings was:
    For every two students that U.S. colleges graduate with STEM degrees, only one is hired in a STEM job.

    That study was by three experts in the field (Hal Salzman, a Rutgers professor, B. Lindsay Lowell, of Georgetown University, and Daniel Kuehn, who has worked with both the Urban Institute and EPI). It stated that “in computer and information science and in engineering, U.S. colleges graduate 50 percent more students than are hired into those fields each year.”

    It also found that “the annual inflows of guestworkers amount to one-third to one-half the number of all new IT job holders.”

    Further, it concluded that “there is a robust supply of domestic workers available to the IT industry.”

    Finally, in a classic economist’s rebuttal to industry allegations of a shortage of talent, the authors noted that had there been a genuine labor shortage, wages would have risen, but “wages have remained flat [in the IT field] with real wages hovering around their late 1990s levels.”

    (BTW while I’m pro-immigration, this is from an anti-immigration website: http://www.cis.org/more-us-stem-grads-than-jobs -kh)

    ==============================================================

    My suggestion: next time someone starts talking about “the War for Talent” (without suggesting it’s not real), watch your wallet and hold your nose…

    Cheers,

    Keith

  • http://www.viletinternational.com Jacque Vilet

    I don’t buy the “shortage of talent” either Kevin. I am really puzzled by companies that say they desperately need to fill openings but don’t fight to be allowed to pay highter salaries. In the “old days” they fought for what they wanted and in the end Compensation, hiring manager, whoever that was fighting it — caved. Again in the “old days” companies paid higher salaries, and trained when they had to. They looked for the best fit and then trained them to fit the rest of the skills they needed.

    Another issue — the purple squirrel is real. Companies have morphed jobs into such combinations that it is 1,000 to 1 that people can fill them. A software engineer in Company A is doing a variety of things that you wouldn’t find a regular, traditional software engineer doing. So when the hiring manager looks for another one he looks for someone can do everything his “hybrid software engineer” can do. Thus the purple squirrel syndrome.

    Also — I keep saying this and no one seems to understand or care — but companies are focusing business overseas because that is where the markets/revenues are. And they need talent overseas to handle it —- not in the U.S. I’m not talking about manufacturing —- I’m talking about professional employees. Companies have had to develop new business models to meet these very different markets —- and they have to hire “feet on the street” in marketing, sales and design engineering. I will continue to say this until someone “gets it”.

    Companies don’t like to talk about it. Some won’t even give you a breakout of #employees in the U.S. vs. overseas. The issue is a hot potato. In my darkest hour I think companies have job posted mostly as a smoke screen — appearances are everything. Again, in the past if jobs needed to filled hiring managers made it happen.

    And Keith :-) don’t come back at me with numbers, sources, etc. as I have researched this very issue for a book.

  • Sylvia Dahlby

    Seems to me the so-called “talent shortage” has always been a skills gap, companies may be willing to hire the talent they think they want and view that as preferable to “growing their own” with career development paths, mentorships & internal mobility/training. And then there’s the gap between education & the workplace, but that’s another topic. Besides, recruiters need a “shortage” and a “war” to justify their fees or budgets – not unlike Congress. Alas, the only thing in really short supply nowadways is common sense.

  • Marina Claassens

    Cheap DOES NOT mean good quality resources. I see this more and more in the Bay Area. We need to drop our rates to get a contract, even though we are better qualified to do the job. At the end of the day, companies are run by accountants. They don’t care about good resources, on about cheap resources. There are many unemployed good technical resources around. But unlike the H1B visa holders, We have families and mortgages to pay.

  • http://hrthebottomline.blogspot.com/ Nancy Robin Gillman, MBA, SPHR

    I have to agree with Kevin on this and if hiring managers considered the other half of the pop (women), we would have a surplus in the U.S.

  • Keith Halperin

    @ Jacque: I look forward to your book.

    -kh

  • Robin Erickson

    According to BLS data, there is a strong negative correlation between unemployment and voluntary turnover in the US. Unemployment has been high (above or hovering near 8%) in the US for the last five years so voluntary turnover has remained relatively low. I expect organizations will start to feel the burn of higher attrition once unemployment goes down significantly. The Talent Paradox is that despite high unemployment and continuing layoffs, some companies are facing shortages in critical areas where they most need to attract and keep highly skilled talent. Organizations should be focused on reskilling current employees and improving their employer brand to better attract new employees and retain existing employees. For more on this, see my Deloitte Review article “The Talent Paradox: Critical skills, recession and the illusion of plenitude.”

  • http://www.cachinko.com Felipe Villasenor

    When determining that talent can’t be found and there is a real talent shortage, we should think about the actor involved (i.e. HR or Talent Acquisition vs. the Hiring Manager). How focused and qualified is the person making this specific statement about the specific talent shortage? What are their self-interests and how hard did they try? How do they know the talent is not available or can’t be easily and cost-effectively developed? I think this takes us back to the White Elephant in the room that most HR Vendors and few people in Talent Acquisition talk about behind the scenes. This problem will need to be fixed before the problem at hand can be significantly improved. One can’t know that talent does not exist if they are steadfast assuming what they are trying to prove. The paradigm shift is taking unnecessarily too long. There are some brilliant Researchers in the talent space. “Listen deeply” to them, be the catalyst for critically needed change.

  • Keith Halperin

    @ Robin:”there is a strong negative correlation between unemployment and voluntary turnover in the US.”
    I think this is correct, and I also see no sign in of a significant accelerated creation of FT, well-paid, well-benefited jobs, so I don’t see much of an increase in voluntary turnover until something like this occurs, with or without a particular “tipping point”.

    “Organizations should be focused on re-skilling current employees and improving their employer brand to better attract new employees and retain existing employees.” What the should do and what the will do are likely to be far apart. I fear that we may see the following trends until there is this fairly rapid increase in the job market:

    1) An increase in on-time scheduling” (“You’re always on call I pay you when I need you to come in, and you better be ready when I call.”) from retail to other areas of employment.

    2) “Down-skilling” instead of “re-skilling”- the replacement of FT, well-paid, well-benefited, highly-skilled positions with a new position which doesn’t need to be these.

    3) A preference to increase the number of W2s as opposed to increasing FT headcount, particularly for those smaller employers whose FT headcount approaches “the magic 50″.

    4) A continuing preference toward hiring new, younger employees and H1Bs (less expensive) to retraining older (more expensive) existing employees. This will be exacerbated when the H1B cap increases.

    5) A possible repeat of what the banking industry did when it received it’s bail out- buying , not hiring. Instead of hiring new employees, it acquired the personnel of other firms through M&A, reducing the creation of new jobs, and possibly increasing UE through the layoffs of the redundant personnel.

    No Cheers,

    Keith “Would Really Rather Be WRONG on All of These” Halperin
    keithsrj@sbcglobal.net

  • Kevin Wheeler

    There is no question that many people with basic scientific, technical and engineering knowledge are available and unemployed. What they lack is specific experience and/or training doing whatever the employer wants done, or they are too expensive, or they are too old. We don’t like to talk about age discrimination, but we all know it exists particularly in the high tech and scientific communities.

    Most jobs require only one or two specific skills that can often be picked up by a motivated learner in short order. Mentors combined with self-learning programs can produce remarkable results quickly. But, few employers are willing to invest anything at all in training and technical training (other than what is required by law or regulation) has been eliminated. Most corporare learning is focused on required technical training and ledership development only.

    This same problem plagues our returning veterans who often lack specific skills or experience but are highly trainable given the opportunity. We need less moaning about talent (i.e. skills) shortages and urge both corporations and government to provide willing people with those skills at low or no cost.

  • Keith Halperin

    @ Kevin: “…urge both corporations and government to provide willing people with those skills at low or no cost.”
    I think this is necessary but not sufficient- we need companies who are willing to hire these re-trained people… I saw a program like this in the late pre-Dot.com era, where a firm (I think it was the Williams Companies out of OK. would hire anybody who made it through their tough IT Boot Camp for FT, benefited positions, and no experience required. We need something like that for MILLIONS of people- guaranteed FT, well-paid, well-benefited jobs for successful re-trainee graduates. However, I think the chances of something like that soon as between slim and none….

    -kh

  • Steven Sill

    Not sure how a 6 figure income straight out of school is considered low paying. You need to consider that what you consider technical, and what a high end engineer considers technical, are two different things. You mention Google and Zappos as companies that hire engineers with out degrees… but do you know what those people come with? They come with a hugely expansive knowledge of large scale systems, computer science theory, math, etc. They further demonstrate a ability to learn quickly and think through difficult problems. They don’t just take anyone.

    Is there a shortage of technical talent… yes most certainly.

  • Keith Halperin

    @ Steven: On a different column, I saw an interesting statement:
    “We don’t have a tech shortage. We have a purple squirrel shortage.”

    -kh

  • Steve Guine

    Thank you for providing this Kevin. Much appreciated.

    Also, thank you to Keith Halperin for the numbers.

  • Steven Sill

    LOL @Keith not sure they count as purple squirrels when you can find them in the 10s of Thousands if not 100s of Thousands. LinkedIn shows that Google by itself has over 12K purple squirrels worldwide… and think of all the engineers who don’t have a LinkedIn account because they are annoyed by recruiters (who? me?)

  • Keith Halperin

    @ Steve G: You’re very welcome.

    @ Steve S: Not sure I follow you.
    ISTM that:
    1) If you can’t fill a position because it doesn’t pay (or benies, QoWL, etc.) well enough: pay (or benies, QoWL, etc.) enough to fill it or do without.
    2) If you can’t fill a position at any price: modify the position to be one you can fill or do without.
    3) If you have a vital position you can’t fill at any price and you can’t modify it: you’re SCREWED (and more’s the fool you for getting into that situation).

    Now that I’ve solved one of the fundamental problems of early-21st Century recruiting, what would you like me to work on next, Folks?

    YOWZA!

    Keith

  • http://www.linkedin.com/in/jacobsmadsen Jacob Madsen

    Compliments Kevin for an outstanding article.
    I was going to make my own arguments, but reading through the comments I see with pleasure that they have all been covered. What is clear from these (and not covered in original piece) is that supporting and making this so called ‘skill shortage; are a number of issues that could easily be dealt with if only there was a different attitude and mind-set. It is this that is the biggest hindrance to alleviate the perceived problems, and in that respect those are the hardest to change why this subject will be around for long to come and brought up again and again.

  • http://www.viletinternational.com Jacque Vilet

    The only thing that hasn’t been said is that a number of jobs out there are now “hybrid” jobs. The recession caused a lot of jobs to be cut. The people who were “survivors” took up the slack. Management has been tacking odd bits of jobs together — and end up with a different job — a hybrid.

    When managers look for new people they expect and need to find people that have not only the traditional skills for a job but also the skills that have been “tacked on”. It’s been an unconscience thing —- but these “hybrids” are the new “purple squirrels”.

  • Keith Halperin

    Well-said, Jacob. “A number of issues that could easily be dealt with if only there was a different attitude and mind-set.” This statement applies to many areas of recruiting.

    kh