There’s a shortage of highly-skilled, tech-savvy workers in the U.S. – and experts say it's hurting growing businesses.
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A new study from the Brookings Institution finds that science, technology, engineering and mathematics (STEM) positions take more than twice as long to fill as non-STEM jobs. STEM jobs requiring a professional degree or a Ph.D. are left open for an average of 50 days, compared to just over a month for non-STEM openings.
“These indicators signal that STEM skills are in short supply in the labor market, relative to demand,” said Brookings researcher Jonathan Rothwell in the study.
The high demand for technical experience has led to significant wage increases for STEM workers, but experts warn it also hurts fast-growing, innovative companies and unemployed workers without these highly- valued skills.
Startups and Technology Companies Left in the Lurch
Hiring the right person for a position is important – but jobs left open too long can be bad for business.
“Each day a job goes unfilled costs the enterprise the value of that potential worker, and this cost is higher for higher-paying and highly skilled positions, even as the cost of hiring a skilled worker who is the ‘wrong fit’ is also higher,” according to Rothwell. “Employer surveys report large costs from hiring difficulty, including overworked current staff, lower quality output, loss in revenue, and delays in product delivery.”
Rothwell also references a study finding that the average U.S. company spends $3,500 per new hire in job-advertising costs – adding up to about $124 billion annually.
The demand for tech workers has created a highly-competitive hiring environment for big companies like Google (NASDAQ:GOOG) and Facebook (NASDAQ:FB) and smaller startups.
“The first thing I hear [talking to startups] is, ‘Do you know anyone? I’m hiring,’” said Mike McGeary, co-founder of public interest group Engine Advocacy. “It’s a very real concern for companies that want to grow and those that are scaling up quickly.”
Tech companies don't appear to be willing to “settle” for employees who don’t have the exact skills they’re looking for.
“It’s a sourcing issue. There are just not enough qualified candidates for the jobs that are open, and the rate of technological change is so significant that the people are not up to date with the new technologies,” said David Morgan, president of the IT practice at staffing firm Addison Group.
As a result, Morgan said he looks to poach talented employees who are already working at a high level in their field – not those who may need some brushing up on the latest software.
“We’re recruiters, so we find people. There’s always someone who’s not completely satisfied,” said Morgan.
Companies eager to fill spots are also looking overseas, or making do with contractors to work on projects on a temporary basis.
“They’re going offshore, and they’re outsourcing to groups to get projects done,” said Morgan.
Tech Employees in Luck … Others, Not so Much
Experts say it’s never been better to be a computer science graduate – or even a self-trained coder.
“Right now, if you’re a technologist, if you want a job, you’ll have a job,” said Morgan. “We’re running zero unemployment in IT.”
At employment site Glassdoor, career expert Rusty Rueff said he’s seen tech companies triple technologists’ salaries in order to lure them. And even the average salary at some of the large technology companies would make most workers’ eyes pop.
Glassdoor’s 2014 survey of the highest-paying companies for software engineers found that the average base salary at Juniper Networks came to nearly $160,000, with Yahoo, Google and LinkedIn all paying around $130,000.
While this is great for STEM workers, it’s not ideal for smaller companies trying to compete with the tech titans for talent.
“If they’ve just raised a seed round, or a Series A investment, and they’re trying to scale, grow and compete, they can’t offer the free laundry and the food – it’s not a fair market,” said McGeary.
McGeary’s group and other tech-focused advocacy organizations, such as Mark Zuckerberg’s FWD.us, are pushing for immigration reform for highly-skilled workers in order to fill the hole in the labor market. But other groups, such as the Federation for American Immigration Reform (FAIR), say that American companies need to stop searching abroad, and start taking a closer look at unemployed U.S. workers.
“The companies that are seeking STEM visas are some of the most robust high-earning companies and ought to be a source for native-born Americans not in the labor force,” said Dan Stein, president of FAIR.
Stein referenced old comments from Zuckerberg saying that the most talented workers are under 30 – proof, said Stein, that the problem is in the tech industry’s attitude, rather than the labor force.
“The longer the flow of foreign labor, the greater the domestic shortage. Americans are discouraged by moving into these fields because of the employer expectations,” he added.