Tuesday, September 2, 2008

Profits vs. Technical Education

A few months ago, Computerword published an interesting article that might through some light on the ongoing debate about "H-1B visas, offshore outsourcing and the debate over whether an IT labor shortage even exists."

The idea is that efforts to cut costs for technology workers deflate students enthusiasm to train for such training. The article is also interesting because it breaks with the usual practice of blaming the prospective employees rather than the corporate employers.

Tennant, Don. 2008. "Pro or Parasite?" Computerworld (14 April): p. 8.

"There are a lot of CIOs [Chief Information Officers] around who dismiss the idea of hiring graduates fresh out of college. I know, because I've spoken with many of them .... But it seems like an awfully shortsighted approach to skills management."

"Of all the issues we cover, none seems more volatile or emotional than the subject of IT skills and labor management, encompassing as it does issues like H-1B visas, offshore outsourcing and the debate over whether an IT labor shortage even exists. During a panel discussion on this topic at our Premier 100 IT Leaders Conference last month, we polled the audience to see whether attendees believed there is such a shortage. Forty-six percent said yes, 43% said no, and 11% said they weren't sure. I wasn't surprised to see the results so evenly split."

"The lack of consensus extends to the question of whether the U.S. education system is producing enough graduates in technology-related fields. We've all read about the concern that the U.S. is losing its competitive edge because China, India and other countries are educating far more scientists and engineers than we are. But there's plenty of debate over whether that concern is legitimate."

"For example, last November, Harold Salzman of the Urban Institute testified before Congress that research conducted in collaboration with Case Western Reserve University and Georgetown University found no shortage of STEM (science, technology, engineering and mathematics) graduates in the U.S. "The available data indicate that the United States' education system produces a supply of qualified STEM graduates in much greater numbers than jobs available," Salzman testified. "If there are shortages, it is most likely a demand-side problem of STEM career opportunities that are less attractive than career opportunities in other fields." What needs to be factored into the equation, however, is that a hefty percentage of those graduates are foreign nationals."

"According to Salzman's report, in 2005, 38% of computer science and 42% of computer engineering graduates in master's degree programs were non-U.S. citizens. To the extent that the benefit of the knowledge gained by those foreign students lies outside of the U.S., it's clear that there's still a lot of work to be done to encourage young Americans to advance U.S. competitiveness by pursuing degrees in STEM disciplines."

"What's equally clear is that if the message being sent to our young people is that companies will be reluctant to hire them when they graduate, they'll steer clear of technology, the pool of homegrown talent will dry up, and the question of whether there's an IT labor shortage will be far less debatable."


jsalvati said...

Aren't the concepts of "blame" and "shortage" both rather absurd here? It's not like either IT workers or IT employers are a single unit, and it's not like anyone is literally going to run out of IT talent; they're just going to pay more for it.

Michael Perelman said...

The point is not a question of running out of IT workers, but rather narrowing the pool of available workers because the lack of job opportunities will discourage future students.

Shag from Brookline said...

I wonder how interesting a 40 year career as an IT worker might be?

Anonymous said...

Since the vast majority of hires of STEM graduates are of undergraduates, is there really any purpose in only citing MS statistics. I work at a science and engineering university in the US and over 90% of the graduates are US citizens. placement is 80-100% in most majors, so supply is pretty close to demand in most majors

Anonymous said...

There's also an increase in the number of STEM graduates, especially from higher-ranked institutions, going into careers that are only marginally related to their core curriculum. You typically make a lot more money applying technical tools to Wall Street, advising people which technologies to bet on, managing more or less technically-related work and so forth, rather than actually doing the grunt work.

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Erik Hetzner said...

For those who don't follow it, the market for programmers is largely based on job requirements based on programming languages, tools, and products. It is only peripherally based on the industry and type of software. So most job descriptions concentrate heavily on what tools and languages are required.

If you read forums where programmers write about things like this, you will find a lot of derisive attitudes towards towards positions that "require" experience that few have. The classic joke is for positions that require more experience in a product than the product's age. I can't say how endemic this is. Certainly there are plenty of job descriptions out there which contain a list of requirements which might be filled by one or two people in the world.

Most programmers and other IT workers feel that if a person is good at what they do they can move pretty well between languages (less so probably between toolsets and operating systems). So the evidence seems to point to confirmation that employers are not particularly interested in training their workers, and are intentionally making requirements look particularly high to create an artificial shortage which might allow them to bring in H1-B workers.

I think that the simple truth is that companies are simply not going to do any training that they do not have to do. Why should they train somebody in something if they can hire another candidate who can already do the job? And if they can use this lack of qualified candidates to bring in H1-B workers and drive down salaries, all the better. Workers in IT, etc. are paid a pretty good salary, so there is a lot of interest in driving those salaries down.

Michael Perelman said...

EGH's interpretation is good, especially because it is close to my own understanding. Thanks.

reason said...

As someone with decades long experience in IT I can confirm that that is the case. But this is not so much a conspiracy as it is a case of ignorance and short-termism, and poor incentives. Any firm that DID train people in new tools, would find them rapidly losing that investment through poaching.

I recently (last 5 years) managed to learn a new skill by being installed as the sole programmer, largely being left alone with a fairly open brief. Such opportunities are rare. When I did get it, I decided to train myself in JSEE which comes liscence free, is portable (good for the company) and is a la mode (good for me). I was amazed to find out how new it was. The software implementing was still full of bugs (not any more). So yes, often they want experience that exceeds the age of the product - agree 100%.

Michael Perelman said...

Economists agree with Reason's suggestion that companies will underinvest in training because workers will use training to get better jobs elsewhere. Economists pay less attention to the undeniable short-termism and irrationality that Reason mentioned.