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The IT labor shortage is real

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SIM
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Jerry Luftman
Jason Hiner
Society of Information Management

Jason Hiner over at TechRepublic wrote a piece yesterday where he presented the results of the 2008 "IT Trends Survey" by the Society of Information Management. Despite perceptions fueled by the media, it appears that the budget allocated to offshore outsourcing accounts for between just 3 and 4 percent of IT budgets. This is dwarfed by the projected 2009 IT budget of 33.7 percent that is dedicated to internal staffers, or the 6.2 percent of the budget for domestic outsourced staffers.

Jerry Luftman, an IT professor and SIM director, points to the media for exaggerating the impact of IT outsourcing. Indeed, CIOs are saying that they have trouble finding enough candidates to fill open IT positions. Hiner notes that the bigger threat in the current economic climate is not outsourcing, but the lack of qualified candidates in the labor market. On the other hand, there is no question that abuse of the H-1B visa program appears to be rampant. What do you think? What is your opinion on this matter?

To read more about this story:
- check out this TechRepublic article

Related Articles:
Offshore outsourcing news from FierceCIO
Time to reevaluate H-1B visas

Comments

the labor shortage must be real

the tech industry would never lie, about something like this

I think this is an interesting article, but given the global economic meltdown that has hit over the past two months, I think the bigger debate is whether there will be as many jobs - period. Whether you outsource or not, the investment in IT and any other cost center is bound to go down as the worldwide recession sets in.

It is absurd to suggest there is a shortage at a time like this. Dice.com postings have fallen some 30%. At last check with BLS statistics job growth in IT is flat. It would be nice if Jerry Luftman dealt with facts when claiming shortages.

Industry isn't creating new jobs. Large technology companies are laying off workers. It's pretty clear that people claiming a shortage at a time like this have an agenda. That agenda is either cheap foreign labor that they can and do exploit, or a pre-emptive strike against likely fair trade initiatives in the coming administration.

There are plenty of qualified people ready to jump ship at the right price. You have got to come to grips with the fact that you won't have the vast supplies of cheap labor you once had. The fraud ridden H-1b program will finally be stamped out.

I am the president of a rapidly growing technology based user group. Some of the most intelligent people in my state attend. If you network in the community you will find very intelligent and highly skilled people. I have yet to have a CIO attend or a high level manager mingle with the talent in our group. Certainly nobody from SIM. You guys are awol - outsourcing the job to staff augmentation firms.

The reason you can't attract top talent is that you probably aren't attractive to top talent. You probably think we are going to come begging you to hire us. Top talent doesn't need to do that. The rules are changing. Adapt to the new rules if you want to succeed as an IT organization. Otherwise, commoditize your staff and run a cost center.

Here is some more food for thought, Dice.com specializes in "IT" employment.

"With more than 2.5 million registered technology candidates, Dice can help you fill your openings quickly and easily."
seeker.dice.com/common/provider/subscription.jsp

"Employed - More than 70% of candidates are employed: Dice provides access to harder-to-find, passive candidates. "
seeker.dice.com/common/provider/why_use_dice.jsp

The second DICE.com statement also implies less than 71% are employed: meaning more than 29% of the candidates are not-employed.

2.5million * 29% = 725,000 not-employed on Dice.com

It's in the interest of employers who would import more labor to suggest there is a shortage (or no glut) and they can't find workers.

Is it in the interest of workers with education, experience, ability, and current skills to be unemployed or underemployed, just to be able to demonstrate that there is no shortage of workers?

The data has nothing to do with whether there's a glut of IT talent. They're just pushing the conclusion, regardless, because their goal is to push that conclusion.

I have to get on these comment boards and say the same thing over and over again, to try to make these bright-boys of academia understand. All you have to do is ask 3 little questions:

1) If there is an IT worker shortage, why isn't compensation going up?
2) If there is an IT worker shortage, why isn't compensation going up?
3) If there is an IT worker shortage, why isn't compensation going up?

www.computerworld.com/action/article.do?command=viewArticleBasic&articleId=326024

And by going up I mean going up more than a tiny statistically-insignificant amount. I mean going up more than inflation.

These three questions are all you need to ask because the law of supply and demand DOES apply to the labor market.

Just ask Alan Greenspan:
March 2007
"If we open up a significant window for skilled workers, that would suppress the skilled-wage level and end the concentration of income."

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