Wednesday, June 22, 2011

How I See It

Matching supply with IT demand

By Tracy Cashman, partner and general manager, IT, at Winter, Wyman & Company

While the economy forges on with slow improvement and the stock market continues its ups and downs, the technology market is quietly prospering, at least as it applies to hiring. In order to fill the voids left by the reductions of the last recession, as well as to support growth, companies desperately need to hire technical talent. In fact, one of the biggest challenges that companies face today is bringing on talented developers, especially in entry and mid-level roles.

This applies to technology companies and non-technology firms alike: regardless of whether people are needed to work on a core product or website, or an internal business application, the technical skills required are often similar. Development technologies such as the Java stack, web scripting languages such as Ruby and Python, and .NET are in demand. This dearth of capable programmers is becoming a larger issue as companies try to shore up their development teams after years of stagnation, or try to expand their teams to develop new business.

This shortage has been years in the making, starting with the dot-com bust in the early 2000’s, and the economic devastation after 9/11. Due to the reduction of development jobs and the fear of outsourcing, many people left the industry entirely and there was a dramatic decrease in computer science and IT majors. No one wanted to enter a “dead” field. It wasn’t until the mid 2000’s that the number of people pursuing technical paths started to increase again.

Fast-forward  to 2011: companies are expanding, there is a huge appetite for new web and mobile applications. The desire to create value through internal business systems has never been greater. However, the supply of developers has not caught up to the demand, especially in the less experienced categories. We have seen more companies hiring junior candidates instead of the mid-level they originally targeted. We have even seen tremendous competition for bright fresh grads with little to no experience.

Compounding the very real supply problem is the selectivity of companies in hiring. Since many have lived without these roles for a few years, understandably, they want only the best of the best. Companies are misled by reports of 9 percent unemployment nationally, but need to realize that it’s approximately 8 percent in Massachusetts and in these technical roles, it’s even lower. Quite simply, good candidates often are employed and not looking for a new position. Even if they are, they are being just as picky. Employers believe they can wait to find the perfect person and may miss out on very qualified candidates who go off the market quickly; and candidates can be so cautious as to stay in a job they don’t necessarily love rather than taking the risk at a new company.

What can be done? In terms of supply, it’s a bit of a waiting game. As more students complete their degrees, and others see the potential and enter the field, hopefully we’ll eventually see the supply and demand balance out. Some universities already have established co-op/intern programs that firms can leverage, which can lead to a pipeline of potential hires after their graduation. Companies should also consider training sharp candidates, as they may be forced to hire people with fewer years of experience than hoped. Finally, both candidates and clients need to be a little more flexible and open-minded. This is not a game of chicken; both sides have something to lose, but if each side can see the potential in the other, then both sides can win.

The good news: companies are hiring and Massachusetts continues its preeminence as one of the largest technology hotbeds in the country. The bad news: Unless we can find a way to entice more people into the field, provide more formal and on the job training, and help both employers and potential employees meet in the middle, the talent shortage could hinder the local economy’s possible growth.

 

Tracy A. Cashman, Partner and General Manager of Information Technology at staffing firm Winter, Wyman.