THE INFORMATION TECHNOLOGY WORKFORCE-FINDINGS AND RECOMMENDATIONS
by the AMERICAN ENGINEERING ASSOCIATION
Bill E. Reed, President
and the AEAmanpower Committee
Robert A. Rivers, P. E.,Chair
Gideon Kantor, Ph.D.
Frank Lord, P. E.
Norman Matloff, Ph.D.
Gene Nelson, Ph.D.
This report has become necessary because of the extensive claims of shortages of Information Technology, (IT) workers by a trade association and lobbying organization of the IT industry. Opposing the claims of shortages are engineering associations representing the concerns of members of the profession. The word shortage is ill defined when related to the supply of workers. Webster's calls shortage a deficiency. The industry claims that shortages exist when they have job vacancies at offered wages and working conditions. Others claim that no shortage exists because employers are not offering adequate salaries and are over specifying skill requirements unnecessarily. By doing so they are eliminating from consideration large numbers perfectly viable talent. The result is unfilled jobs caused by actions of the industry itself.
The purpose of this report is to put reason instead of hype into discussions of the availability and utilization of the technically competent workforce of the IT industry and of industry in general. Concentration on the IT industry is done because of the high percentage technical IT workers compared to industry in general. Technically competent is defined as those having four year degrees and extensive technical training or experience. The purpose of the technical definition is to limit discussion to those workforce groups that have or need to have technical training, educational or experiential background that is needed to function effectively in the industry in some capacity. It is not meant to include secretaries, accountants, buyers, factory assembly workers or similar support personnel. The first part of the report, (Findings of Fact) will provide the statistically reliable facts that bear on the supply demand situation. No use is made of anecdotal information because of the potential for selection bias. The reader will find that there may be large numbers of vacancies but that the data does not support that there are generalized shortages of skilled workers for the IT industry. The second part of the report (Recommendations for Action) focuses on what needs to be done to adequately respond to future expansion of demand. Those factors include extensive modification of
employer's recruitment conditions, worker compensation and training. Government may be required to provide subsidies for long-term training. On the job employer based training will be seen as the focus of providing adequate availability of talented workers with current skills.
The principle hype introduced into discussions of workforce supply for the Information Technology industry is the use of the word SHORTAGE supported by surveys of job vacancies. Job vacancies are a symptom of the difference between what the employers say they want and what they are willing to pay for, not a proof of shortages. We do not have a planned economy (former USSR style) where state planners determine the need and allocate the supply. We have a market economy that functions by allocating the supply of goods and services to those having the most need and are willing to pay the market price. There are always those in a market economy that are deprived of the goods and services because of inability to pay or lack of interest in paying the market price. There is usually a supply of goods and services at prices in excess of the current market price. An employer may characterize what is seen as a shortage when nothing is available at the price the employer wants to pay. If the offers are below the market, the lack of response is the normal working of the marketplace. Some of the sellers simultaneously may see what they believe is a surplus when they find no takers for their offers of services at above market prices. That too is the normal working of a market economy.
An employer with real needs to get a job done will adjust salaries offered, job specifications, tenure, and benefits to meet the market price and thus fill their job vacancies. Another employer will complain that they, (the government, educators etc.) are not supplying enough prospects at the price the employer desires to pay and back it up with: look at all the (over specified/underpaid) job vacancies I have. No one has a right to expect a supply of workers exactly with the wanted characteristics and wages. Good management can mold a less than ideal group into an effective productive team. The employer does have a right to hire and train anyone who wants to work for the employer at agreed to wages within the law and in conformance with labor contracts.
As a frame of reference, the following is quoted from the IEEE-USA Entity Position Statement on Interpretation of Engineering Supply and Demand Surveys. The IEEE-USA is able to anticipate situations that may occur and develops guidance for handling them in the form of Entity Position Statements. The statement was generated by its Workforce Committee and approved by the IEEE United States Activity Board in 1994:
Beginning of Quotation:
Supply and demand for engineers are affected by market forces, and compensation is an important determinant of the availability of supply and the level of demand. Extreme caution must be exercised to ensure that underlying assumptions and definitions as well as data collection and analysis techniques are sound before the merit of any resulting survey findings can be considered.
Demand for engineers has been driven historically by national economic forces (especially by major governmental procurement programs) and is increasingly being conditioned by international economic factors.
Under-utilization of engineers increases demand. More effective utilization of engineers and support personnel can reduce the potentially adverse effects of increases in demand.
Temporary imbalances in supply and demand for engineers may exist from time to time in certain localities due to changing economic conditions. Such local imbalances should not be extrapolated to suggest the existence of nationwide imbalances.
Temporary imbalances in supply and demand for certain engineering disciplines or subspecialties may also develop from time to time due to changes in technology and its applications. Such imbalances should not be extrapolated to suggest the existence of shortages or surpluses in other disciplines or subspecialties or for all engineers.
Engineers are much more broadly trained than a particular disciplinary title or specialty designation implies and can generally apply the knowledge, skill and experience to the solution of a wide range of problems in a variety of engineering fields.
End of quotation.
FINDINGS OF FACT
There are no shortages of IT workers.
Shortages are endemic in centrally planned economies such as the now defunct USSR, We had labor shortages in WW II when there were wage controls and restrictions on changing jobs. We now have a relatively unfettered market economy where employers have the right to hire anyone at any wage above the minimum. Any IT employer can hire needed workers if they offer sufficient wages. Escalating wages may be undesirable to an employer. It is wage inflation but it is not a shortage. Wage escalation is desirable from the employees' point of view.
The IT industry is Expanding.
The Information Technology (IT) industry technical employment has been expanding since 1983 at a 5.8% rate. That employment is characterized by the Bureau of Labor Statistics (BLS) categories of Computer Programmers and of Computer Scientists and Systems Analysts. Nothing ever expands forever because eventually it would use up everything available . Expansion eventually flattens out at some saturation point. It is reasonable to expect that we will be in the early stages of the industry expansion and at the historic rate of 5.8% for at least a few years. For the year 1997 that rate would produce an employment expansion of 96,000. The expansion never occurs at exactly the forecast rate but is sometime more and sometimes less dependent upon usually unpredictable economic influences.
Some employment categories are expanding and some are not.
The more rapidly expanding subset of the IT industry technical employment is that of the Computer Scientist and System Analyst (CS&SA) BLS category. That subset has been expanding annually at a 10% exponential rate since 1983. The Computer Programmer (CP) category however has not been expanding since 1990. Because of the non-standardization of employment titles in the IT industry and the resulting shift from one category to another from time to time, it is more useful to discuss the total of the CP and CS&SA categories when discussing employment trends.
The numbers of vacancies do not indicate a shortage.
The survey showing 190,000 job vacancies at IT and non-IT employers is subject to serious question because of response bias, questions about what the respondents thought were an IT worker, and the unknown method of the extension to 190,000. There were an average of 33 vacancies at the actual 149 IT companies responding and an average of 4.5 at the 122 non-IT companies responding for a total of 5466 vacancies. It is known that the minimum size of the IT companies was 1000 and of the non-IT companies 500. It is not known what the average size was. Even at the minimum size, there were 33 vacancies for each IT employer and only 4.5 for each non-IT employer. The 33 vacancies for a 1000 employee organization is not unusual. Four and one half vacancies for a 500 person organization is not unusual. The IT organization probably classified all of its vacancies including guards, typists and clerks as IT workers since it was an IT organization while the non-IT only responded with those employees actually needed for IT activities. The vacancy rates found by the survey were 3.3% for the IT industries and 0.9% for the non IT industries. Expansion of the work week by 1.32 hours would cover the IT worker under supply.
The median salaries of IT technical workers do not indicate a shortage.
Contrary to selected anecdotal data, the latest available median weekly salary data from the BLS does not indicate any abnormal rise in salaries of Computer Programmers (CP) and of Computer Scientists and System Analysts, (CS&SA). The median salary data is available only on an annual basis and is only available in the third week of the month following the close of the year. Data is available for 1996 and before indicating a straight line growth in median weekly salaries. That straight line growth showed annual increases of $25.00 per week for the CP specialty and $27.00 per week for the CP&SA specialty. The actual increase for the last year was $29.00, (3.9%) per week from $743.00 in 1995 to $772.00 in 1996 for programmers. The actual increase for computer scientists and systems analysts was $19.00, (2.2%) per week from $872.00 in 1995 to $891.00 in 1996. Neither figure is significantly different from the general wage inflation rate and is an absolute indication of the absence of a general shortage of IT technical workers. In this high demand environment, what the salary data indicates is that employers are holding the line against offering increased salaries to recruit workers. They are accepting the higher job vacancy rate rather than filling the jobs at higher salaries.
An adequate supply of talent is available to the IT industry.
Has the IT industry been able to find the talent with which to expand in the past? The simple answer from historic BLS data is yes. In the last four years, data on a quarterly basis for the CS&SA categories has shown three expansions ranging from 143,000 to 194,000. Has the availability of Computer Scientists educational output impeded the growth. The answer is no. From 1980 to and including 1995, some 432,000 CS degrees have been awarded in the U. S. Only two thirds of CS degree holders are employed in the National Science Foundation IT categories. The balance are elsewhere and are prospects for employment in the IT industry.
There are a wide variety of sources for IT talent.
Where has the talent been coming from to fuel the previous IT expansion? It has been coming from practically everywhere that there is educated or trained talent. Below are three categories of data available from the National Science Foundation (NSF) 1993 SESTAT survey files. The data indicates the wide variety of backgrounds used today in the IT industry. It destroys the arguments that there is a one to one correspondence of Computer Science degrees and the needs of the IT industry. Condensed information is shown here. Data is not shown where there are less than 10,000 degrees in a specialty. The rest of the detail is available on the NSF Web Page at http://www.nsf.gov .
The following data is shown to illustrate the diversity of degree holders employed in three of the IT employment sectors.
Computer & Information Sciences Employment
641,266 Total Employment
10,344 Without Deg.
631,022 All Degrees
80,951 All Eng. Deg.
(1) 162,888 Comp. & Information Sci. Deg.(25.8% of all Deg.)
(2) 89,628 Business Deg.
(3) 56,320 Other Social Science Deg.
(4) 33,187 General/Applied Math Deg.
(5) 24,523 Psychology Deg.
(6) 22,854 Other Social Science Deg.
(7) 22,707 Economics Deg.
(8) 21,047 Education Deg.
(9) 18,210 Political Science Deg.
(10) 14,121 Physical Science Deg..
Computer Programmer Employment
5,502 Without Degree
199,416 All Deg. (35% of BLS Programmer Employment)
(1) 75,743 Computer Science Deg. (38% of all deg,13% of BLS employment.)
(2) 33,956 General/Applied Math Deg.
(3) 25,099 Engineering Degrees
(4) 13,028 Electrical Electronic Computer Deg
Electrical Electronic & Computer Engineering Employment
11,917 Without Degrees
566,641 All Degrees
366,284 Engineering Degrees
(1) 315,207 Electrical Electronic & Computer Eng. Deg.
(2) 58,915 Computer & Information Science Deg. (10.4% of all degrees)
(3) 34,822 General/Applied Math Deg.
(4) 27,872 Physical Sciences Deg .
(5) 27,137 Engineering Technology Deg.
(6) 14,208 Mechanical Engineers Deg.
(7) 12,193 Business Degrees
(8) 11,777 Other Liberal Arts Deg.
The nationwide supply of science and engineering graduates is great.
There are twelve million, (NSF) science and engineering degree holders in the population with fewer than half of those employed in science and engineering occupations. While many are perfectly satisfied with their current situation, a significant percentage are not and are candidates for IT training and employment. There are 330,000 new science and engineering graduates every year in the U. S. There were 1,160,134 Bachelor's degrees awarded in 1995 alone. The millions of non-science employed previous graduates and the current graduates are enough to overwhelm the IT industry if utilized. There are slightly more than 1.6 million technical employees of the IT industry with at least 350,000 of the programmers that do not have 4 year degrees. Considering that the IT industry is only expanding at the rate of 96,000 this year, there should be an adequate supply with just the current science graduates. In addition there are many more with BA degrees that add to the supply. Given the above facts, the argument that we are exhausting the supply of talented workers is obviously invalid.
The number of engineering immigrants is exceeding the number of U. S. graduates.
There are 65,000 temporary visas for engineers available each year. This last year there were 2800 admissions in excess of the quota that was borrowed from next year. There were 11,600 Computer Scientists and 9,900 Natural Scientist temporary admissions. There are approximately 15,000 engineering and science permanent admissions many of whom work in the IT area. From time to time there have been refugee quotas such as 50,000 for the USSR of which about 30% were engineers. Eastern Europe had a quota of 75,000 of which about 10% were engineers. There are additionally other immigration categories that result in increased availability of IT workers. Working foreign students add to the supply. Finally there are the unknown number of working illegal immigrants.
There are approximately 65,000 BS Engineering degrees awarded yearly in the U. S., of which approximately one third are in electrical engineering that today is generally in the same departments as Computer Science. These 165,000 new technical people comprised of immigrants and U. S. engineering graduates supply the core of the expansion of employment in the IT industry. They do not supply the whole as is illustrated previously by the degree composition of the IT technical workforce. When reviewing the dominance of immigrant temporaries one should consider the impact of a need to expand our defense effort. Most of the immigrant temporaries would not be able to obtain clearances. Below is some recent history of degree awards and immigration:
ENGINEER CS TEMPORARY ADMISSION PERM. ADMISS.
YEAR BS GRAD GRAD ENGIN. COMP. SCI. NAT. SCI. ENGIN. COMP. SCI.
1986 78,178 41,889 18,423 3,424 6,259 8,389 1,042
1987 75,735 39,589 18,432 2,916 6,628 8,340 1,176
1988 71,386 34,523 19,939 2,231 7,205 8,081 1,164
1989 68,824 30,454 22,522 3,157 9,201 9,520 1,582
1990 65,967 27,257 26,040 3,070 10,473 10,417 1,782
1991 63,986 25,083 35,619 4,608 12,765 10,676 1,739
1992 63,653 24,507 36,826 5,732 13,095 15,629 3,407
1993 65,001 24,200 39,474 10,846 9,344 14,345 4,119
1994 64,946 24,200 43,778 12,271 9,423 10,793 2,781
1995 64,749 24,404 55,400 13,900 10,500 9,102 2,128
1996 65,267 67,800 11,600 9,900 11,748 3,281
Source IEEE-USA, from data compiled by David S. North
Large numbers of underutilized talented women
Women in the IT technical workforce are significantly underrepresented. In 1996 there was a total employment in the CS&SA category of the BLS CPS of 1,093,000. Of these 786,000 were men and 307,000 were women. Parity would provide opportunity for 479,000 women. There is an untapped supply of women that would satisfy the expansion needs of the IT industry at the present rate of expansion for five years. The Accounting and Auditing category employs 677,000 men and 862,000 women. If that detailed numbers oriented work can employ more women than men, the IT industry can do the same. If one looks at the white worker category, a difference of 417,000 is observed. White male employment is 655,000 and white females account for 238,000. To add to the inequity, the Computer Programmer category contributes a 215,000 difference between male and female job holders. There are 388,000 males and 173,000 females employed. White males hold down 334,000 and white females 137,000 jobs. The argument that the disparity is representative of the job market in general is simply wrong. The total over 16 year employment has 68,207,000 men and 58,501,000 women working. While women are over represented in data entry occupations, they are under represented in the technical IT occupations.
There is a big source of underutilized talent in the employed and unemployed IT workforce.
Employers are neglecting their own back yards. The IT industry employs 398,000 computer operators and 690,000 data entry keyers for a total of 1,088,000. These individuals almost universally are highly skilled in entering data, a skill also appropriate to programming. A screening of that population would make available a large number of trainable individuals. In the case of computer operators, 60% are female. For data entry keyers, the female population is 85% of the total. Upgrading of these populations by on the job training after screening for aptitude would improve the female population representation in programming. A supply of CS&SA and computer programmers is immediately available from the 22,000 third quarter 1997 BLS unemployed. In the high demand 1966 period for engineers, the unemployment rate went to as low as 0.3%.
RECOMMENDATIONS FOR ACTION
A little flexibility in employer's job specifications would solve a lot of problems.
IT employers are expressing concerns about the ability of the labor market to supply their needs for talented labor with the exact desired experience the very instant a need is determined and with salaries, benefits and tenure to which the employer is willing to commit. Such an expectation is unrealistic in a market economy during periods of high demand. It was possible in the period of low demand of the early nineties. Instead of looking for the individual meeting the exact specifications and rejecting 98% of their applicants, employers should look at each applicant's talents and skills and determine not if, but where the individual could be used now or with some on the job training. The employer must be willing to meet the marketplace salaries, benefits and working conditions of the industry. An executive of GE advised during one of the previous periods of high demand, When we want someone, we pay what it takes to get them. In today's market it might well be amended to say and to hold them.
The detailed recommendations are as follows:
Recommendation #1: that employers cease over specifying the qualifications needed to fill positions.
The over specifying of job requirements is rampant and counterproductive. Company after company when surveyed state that they only hire 2% of their job applicants. In the best cases, 5% of applicants are hired. That being the case, they could double their hires by minor relaxation of their specifications. Perhaps a week of two or even four of training might be necessary for the other 2%, but that is a small price to pay to avoid paying hiring bonuses or the fees of Head Hunters. It used to be said by some technology companies that they hire only the top 10% of the graduates. Of course that is absurd because what is possible for a few is impossible for the many. Now we have those companies being so picky that they only want the top 2%. A system set up to take the rejects from one company and offer them to another company would probably find that the second company could still satisfy their 2% requirement.
Recommendation #2: that employers have qualified technical personnel reviewing resumes and applications for employment.
The use of computer key word filtering results in an excessive number of rejects because of the inability of an applicant to guess what the key words are that are used for filtering. Similarly, filtering of applicants should not be done in a HR department that is not technically competent in the range of technical expertise of an applicant. Technical competent reviews lead to evaluation of the actual skills, adaptability and talent not necessarily described in the simplistic key words of a requisition. Where an applicant has not done exactly what has been specified, technically competent evaluation can determine the adaptability of the applicant to quickly produce results.
Recommendation #3: that employees and employers recognize the implications of the new paradigm in employer employee relationships.
The new paradigm in employer employee relations is that the employer is not responsible for the employee's career, the employee is responsible. Translating this, it means that you come to work, you work and we pay you. When we think that the work can be done just as well and cheaper by someone else, we no longer have any obligation to you. If you do not keep up with the technology, then we will replace you. The employee's career is their own problem. The problem is that the employee comes to a job with a capital investment of $200,000 that should be amortized over the career lifetime. There is at least one industry CEO that has stated that the half life of an engineer is 5 years. If that is in fact true, there is a need to depreciate the investment at the rate of $20,000 per year. The employment of the individual should either produce added payment for the depreciation of the educational asset or should produce training to renew the asset value. The employee should be treated no worse than a piece of machinery. The depreciation payment or training should be concurrent with the employment. The old paradigm of career employment provided for payment later in ones career. The new at will environment calls for payment from month to month. The consequences of not covering the investment depreciation is that the educational investment will not be made when potential new entrants realize the lack of return on investment. Present salary structures do not provide for after tax return of the educational investment. In order to provide for future supplies of talent, an educational depreciation credit should be allowed or should be covered by increased salaries.
Recommendation #4: that employers budget at least 3% of salaries in IT skills training of their workers.
The American Manufacturing Association has found that industry in general has expanded its training in the face of increased technology utilization from what was 0.5% to 2% of salaries. It has also recommended that manufacturers increase those expenditures to 3%. The Information Technology industry report from 149 companies of 1000 or more employees actually responding indicated that 66% of them spent $99,000 or less per year. That is less than $99.00 per employee, a minuscule amount when you consider that the all-industry average wages are a little under $13.00 per hour or 26,000 per year. That works out to a maximum possible of one day a year and probably much less. The above historic training expenditures have included those for affirmative action training, benefits information meetings and support staff training rather than for technology training. The high growth rate, product innovation and high technology content of the work demands a much higher than overall industry average expenditure for skills enhancement training.
Recommendation #5: is that employers provide on the job technology training for new hires and the current workforce.
It is employers that have the facilities to provide the most efficient training of people with basic skills. On the job training is known to be the most efficient. Three percent of payroll can be translated into 60 hours or a week and one half per year per employee. Such a training expenditure would make it possible to train every employee in a new skill once a year. That training might not be enough to produce top efficiency but would be enough for the employee to start working independently. Such an expenditure should be made to provide for continued utilization of the worker and to provide backup in case other employees resign.
Recommendation #6: that employers cease writing off downsized ex-defense or commercial workers
While there are occasional pronouncements of the end of downsizing, at the same time that the pronouncements are made a number of pronouncements of additional down sizing appear. At this instant it is 12,000 at Raytheon, 1900 at Polaroid, an increase from 10,000 to 19,900 at Kodak, and a closing of the McDonnell Douglas Aircraft production lines by Boeing with an expected 12,000 job loss. Those employees are a selected group of reliable productive individuals, the primary needed characteristics for employees of any organization. What they may be lacking is the detailed current technology training for new jobs. That technology training is can be imparted most efficiently by on the job training at the new employer. Selected groups can be retrained in weeks or a month on the new job. Others may take longer and may require subsidized longer term training again in a real world situation. Both employers and employees must accept the new valuation by the job market of the new employment, the employer by accepting the fact that the employee can adjust to the new market evaluation and that the employee will be satisfied with the new valuation.
Recommendation #7: that employers adjust compensation and benefits of current employees to market rates.
Employers in any organization must have salary structures that are understandable and acceptable to all employees. Otherwise some groups become significantly dissatisfied and are difficult to retain. While an employer may have attained an acceptable salary structure in the past, sudden expansions in demand in specialties should result in compensation adjustments for the group. If not done, the result will be raiding by others or simply drifting of the high demand specialty segment to other employers offering more money, better working conditions or better opportunities for advancement The most rational approach is to adjust the high demand area salaries and other benefits to the current market. If however there is general wage inflation then across the board adjustments must be made. Fixation on an established internal salary structure in a high demand market is a dangerous position.
Recommendation #8: that employers pay station allowances for high living cost areas such as Silicon Valley.
The idea of station allowances is not new. The State Department does it. The IRS does it, and many commercial organizations do it that routinely move executives around from one world wide location to another. The idea should be adopted by the IT industry especially in Silicon Valley where Real Estate prices and apartment rentals have escalated significantly. The IEEE Salary Surveys have shown the salary differentials for various geographic areas. The survey shows algorithms for salaries versus geographical locations as well as for other variables. These could be used as guidelines for establishment of station allowances. Temporary, contract and consulting personnel should be paid adequate per-diem rates to cover the costs of maintaining temporary or multiple residences. An example of the Federal Supply System maximum allowable daily expenses are generally $50.00 for lodging, $30.00 for meals and incidentals for a maximum of $80.00 per day. The DC allowances are respectively $124.00, $42.00 and $166.00 total. Arena California is the same. The highest rates found are for Nantucket in the summer at $179.00, $42.00 and a total of $221.00 The schedule for the U. S. is available at www.fss.gsa.gov.
Recommendation #9: that employers provide support personnel for skilled personnel.
Increased output of skilled personnel can be enhanced by support personnel. Activities such as telephone answering, copying, filing, letter writing, faxing and e-mail reviewing and responding can be relegated to support personnel freeing time for the professional to work at what is most needed.
Recommendation #10: that employers use paid overtime for their current employees in order to increase output during periods of high demand.
A 10% shortage of personnel can be covered by overtime of 4 hours in a 40 hour week. The temporary use of overtime can achieve the results needed much quicker than the hiring of additional personnel. Excessive overtime however can be counterproductive in the long run resulting in burnout of the individuals. Fairness requires compensation or compensatory time off.
Recommendation #11: that Congress modify labor laws for exempt personnel compensation to require at least average 40 hour week hourly rate compensation for overtime.
The excessive use of free overtime by employers of exempt personnel results in a number of adverse consequences. It provides for excess demand for young, single and non-family obligated workers and discriminates against those older with family obligations. It leads to early burnout of overworked individuals and a loss to society of workers talented and experienced in a specialty. The free overtime provides an economic stimulus to age discrimination counter to public policy. It is within the province of Congress to legislate against predatory labor practices in the same manner it has legislated minimum wages..
Recommendation #12: that employers set up satellite operations in the U. S. in areas of excess supply.
Satellite operations are normal corporate solutions to the exhausting of needed talent in a local labor area. General Electric is a long time example of diversification geographically with satellite operations. It provided for access to dependable talented local supplies of labor. More recently Intel became an example of geographical diversification. The setup of Denver, Boulder and Colorado Springs operations by California electronic firms are examples. Cabletron of Rochester New Hampshire setting up an operation near the Massachusetts border is an example. Even though there was high technical unemployment at the time, they could not get the desired technical help to move to the Rochester NH area. They set up a satellite plant that was able to access the northern Boston metropolitan area technical labor supply. The AEA Manpower committee chairman moved his company to New Hampshire from Boston in 1966 to solve a labor supply problem and found the moving solved the problem.
Recommendation #13: that employers provide expanded opportunities for telecommuting.
Telecommuting is the ultimate example of geographical diversification. With that there is only one person per geographical location. While theoretically desirable in many cases, it does not satisfy the average employers desire to control the employees time. If employers could rationalize losing time control, that would open up telecommuting to much wider use and access a much larger supply of talent that is bound by family, interest preferences or cost of living to other geographical areas. All the employer has to do is to develop and administer performance policies to get the required work done.
Recommendation #14: that employers use temporary workers, contract personnel or consultants to fill temporary voids in staff talents.
Temporary staffing operations or consultants should be used to handle peak load requirements or to fill the needs for expertise for which there is not a long term need. The temporary route eliminates the need for costly and time consuming reductions in force of permanent employees. There is a wide variety of national and local temporary technical worker suppliers. Even for long term assignments the temp is an at-will worker whose utilization can be carefully tailored to the project requirements.
Recommendation #15: that employers make positive attempts to access the supply of under represented groups.
Women, Blacks, Hispanics, Native Americans, Mid-career and Mature workers are under represented and under utilized. Accessing the supply begins with the process of evaluating the 98% that are routinely rejected followed by training both on the job and industry conducted training to fill real vacancies. Temporary training employment should be provided that is not subject to unemployment charges against the employer should the individual not be hired permanently. The temporary training employees should not be eligible for any of the company fringe benefits. There are many sources of training grants around which such training could be structured.
A temporary employment agency is the vehicle for achieving the closeness required for training and the employer protection against encumbering the company fringe benefits until such time as permanent employment is offered. The temporary employment agency is used by industry extensively today. The temporary employment agency's mission should be expanded to include training.
The IT industry is expanding with the CS&SA employment expanding at a 10% annual rate while CP employment is declining slightly. The combination of the two specialties is expanding at a 5.8% annual rate. The increased numbers of job vacancies is being used as a self serving call for drastic action by others. Industry has control of the vacancy rate by making adequate salary offers and by eliminating excessive experience requirements. While it is impossible to determine explicitly what the purpose is of the over specified requirements, it is possible to tell that they are not offering significantly higher median salaries to attract and keep employees. There is no abnormal wage inflation. There are no shortages as occur in centrally planned economies such as in the now defunct USSR. There are no legal restrictions on offering more wages and such increases will make the supply available even with the over specification of skills. Historic ability to expand employment has shown there to be an adequate supply of talented workers from a wide variety of sources. Those sources include current and past Science, Engineering and Liberal Arts degree holders and immigrants from around the world. The number of engineering immigrants exceeds the number of U. S. engineering graduates, a situation needing review with respect to the national interest. There is a large supply of underutilized women and of those in other ethnic groups. Finally there is a large supply of trained and reliable talent from those unemployed, downsized, too old or overqualified.
AEA recommends that employers relax their over specified experience requirements and to provide skills training for their present employees and their new hires. We recommend that applications for employment be reviewed by technically competent individuals with instructions to review on the basis of how the individual could be used rather than on the basis of exactly meeting over specified experience requirements. In order to access a larger talented population, we recommend that industry budget for increased training levels of the order of 3% of payroll or more. We recommend that available downsized, ex defense and unemployed workers be given consideration by the employers consistent with the worker's experience, reliability, dedication and training. It is recommended that compensation levels of current employees be adjusted to market levels thereby limiting attrition and providing the basis for getting new employees. AEA recommends that employers provide salary supplements to cover excess living costs in high cost locations. We recommend that working conditions be reviewed and improved in areas such as support personnel and working over 40 hours without compensation. Legislators should review the exempt employee laws to eliminate the unpaid overtime. AEA suggest that the appropriate response by employers in high living cost areas is higher salaries or the establishment of satellite operations in lower cost areas of the United States. The ultimate in bringing work to the individual is telecommuting. We recommend that industry develop performance criteria to permit increasing the amount of telecommuting.
Employers seem in many cases to indicate that they do not know that we are in a market economy, not a centrally planned one. They in large numbers indicate that they expect an instantly available floating supply of numbers of individuals exactly matched to their latest experience and educational specifications. They appear to not know that the main supply of experienced individuals is among the already employed. They frequently complain that the already employed supply is not available to them because it would require higher compensation offers to get them to move. Their avoidance of the techniques to be used to satisfy their needs in a market economy provides adequate evidence that there is not a shortage. Many appear to have made their choice of not meeting market rates and have been left with vacancies.
Robert A. Rivers