PwC Consultants Predict an IT Talent Shortage
Published: December 4, 2006
by Timothy Prickett Morgan
The data centers and departments of the world's companies are not the only organizations that are constantly wrestling with developing technical talent and keeping their techies happy. The technology companies of the world--who supply us our hardware, software, telecommunications, and information services--have the same exact problem. And maybe they even have it worse, if a report from PricewaterhouseCoopers is a glimpse into the personnel management realities that technology companies are facing.
PwC puts out an annual survey related to hiring and employee management practices at technology companies because it has a business practice consulting with these firms--many of them the brand names in the IT sector, some in adjacent fields. So you have to take the rallying cry about a looming shortage in techies among the tech companies with a grain of salt. You also have to decide if such a shortage is a leading indicator for the broader IT market. (It is logical to assume that is it, but PwC offered no evidence to suggest that it believed this.)
"Competition for talent has never been as fierce as it is now," explains Scott Pollak, one of many directors at PwC. "Technology executives must upgrade human capital management in their companies and create innovative programs in order to attract and retain the best people. The technology industry has experienced steady growth in hiring over the past three years, and even a small increase in demand would signal the beginnings of another industry talent war."
To put together its latest report, called Technology Executive Connection--Successful Strategies for Talent Management (which you can download here), PwC surveyed 153 executives at technology companies and then followed up with 22 in-depth interviews. These interviews were done in June, and the results were released in a report in November.
What the survey results show is that the employees at tech companies are not much different from those at IT shops around the world that buy their products. They want interesting and rewarding work; they want to be shown that by taking a job, they will be on a clear career development path; they want to have some control over the projects they get involved with, and, increasingly, they want the freedom to devote some of their time to their own projects.
According to the report, 71 percent of the executives at the technology companies surveyed said that competition for talent in their industry is worse than in other industries outside of high tech, and 83 percent of those surveyed said that finding employees with engineering skills as well as the ability to think creatively and collaboratively is in short supply. About 45 percent of the executives said that technology personnel were already scarce or very scarce, and within the next three years, 66 percent said it would be scarce or very scarce. Significantly, about 4 percent of those asked said that there was already severe scarcity, and 15 percent said techies would be extremely scarce within three years.
The scarcity for techies at technology companies seems to be worse--based on the experience and gut sense of the executives polled--in Europe and Asia/Pacific. Ironically, Eastern Europe, China, India, Singapore, and Indonesia have been the hot markets for outsourcing and offshoring from North America and Western Europe for the past decade. In Europe, 63 percent of executives at tech companies are predicting scarcity in techie personnel, and 73 percent of the executives at tech firms in the Asia/Pacific region expect such scarcity--up from 40 percent today.
Education of techies is a key issue, of course. About 55 percent of the executives polled said that employees with math, science, and engineering skills in the developed countries of the world are drying up--and it won't be long before emerging markets start experiencing shortages, too. Executives complained openly that the quality of engineering and science graduates in both North America were mediocre, excepting the crème de la crème at the best schools, of course, and that graduates are better in Europe and, in many cases, in Asia.
High tech companies complain about this all the time, and they clamor for special visas to bring people from overseas to their companies that, in all fairness, amounts to little more than indentured servitude. (That's no slam. One of my forefathers came over on Mayflower-II as an indentured servant, paid his passage in sweat, and went on to help found the city of Hartford, Connecticut.) But it is an observation. Those H1B visas have allowed good people to get great jobs and do wonderful work--and I am all for that. But let's be clear. The technology companies of the world get such talent on the cheap this way, and that means the good jobs that might attract indigenous youngsters to go into engineering and science in North America and Europe are not there for them. So, there is no surprise at all that there is a scarcity of good math and science students in America. Not when you can make more money as a doctor or a lawyer than you can make as a respectable--but not brilliant--engineer.
I say this as a person who figured out that engineering school was not enough hands-on for my taste. The fact that I love technology--not just computers, either--and started Hardware Foundry to develop open source hardware and be its chief hardware engineer shows you that I like technology as much as anyone else in the tech biz. I just won't be that bored by book learning.
Which brings me to my point about such studies as the one that PwC put together. PwC has a vested interest in highlighting concerns in the tech industry about techie scarcity, since it has the tools (so it says, anyway) to help tech companies better manage their personnel. But if science and engineering were taught in a more active way--for instance, let the math solve real problems, don't study math for math's sake--on real projects, kids would be turned on by engineering. You get what you expect.
You need look no further than page 33 of that PwC report to see the way out. Of the executives polled, only 46 percent of them said that base pay was a highly effective way of compensating employees, and 27 percent said that other intangibles--such as a collaborative working environment , training, access to leading edge technologies, a career path, mentoring, travel, and risk taking and innovation--were the keys to keeping techies happy and still working for the company. Only 19 percent of the executives thought equity or share options motivated employees, and only 12 percent thought healthcare and retirement benefits were highly effective as motivators, too.
In short, techies do the math, and they want a life, not simply a job. What else would you expect?