What Tech Jobs Are We Creating?

Posted by steve | Blogging | Wednesday 15 May 2013 6:59 am

When I read that US companies are complaining that they cannot find qualified technical people I wonder about a few things.

What are the jobs? Did the implied part get left off of the statement? See, when I hear the words “We cannot find qualified applicants”, I translate that to “We cannot find qualified applicants willing to work for the pay we offer.”

Search on the popular tech job sites and many of the jobs available right now have significant problems, in my opinion. A part-time job or contracting position is not a commitment by the company to hire and has many costs and hazards for the contractor. The job will end. And more than likely the job is out of town, away from home. Contract work usually means you have to pay for your own healthcare. What about the risks of purchasing a home with a part-time or contracting job? Yes, risks of layoffs are real in full time work too, and with the IT sector that brings up the next point.

What do these jobs pay? Many companies are outsourcing tech work offshore. This is done for a number of reasons. Pay is lower with offshore labor. Also there is less commitment. Again, the employer often believes that low-cost technical workers are easy to find offshore so contracts can be changed for the better deal. This works the other way too in these emerging offshore markets. So many corporations are working with offshore IT labor that, for these workers, the market is so hot that they change jobs frequently. The tech worker who truly understands the complex software being enhanced, modified, or fixed, are becoming a thing of the past. Do not make the make the mistake thinking that analysis and design is working code. Computer systems do not run documentation. They run programs. You need people that know the code intimately. They know where the real fragile bits are found.

We cannot blame the companies for this way of thinking. Well, yes we can, but it makes sense how we got here. In today’s world of high pressure for return on investment and quick payoff the incentives are incredibly high to reduce the labor costs. If you must answer to impatient stockholders and investors when it is pointed out that you could cut your IT hourly rates by 35 percent going offshore, do you reply that it is not good for America to outsource to fill the demand for Tech jobs? Is it sound business that your knowledge about the IT-side of the business is controlled by non-employees? How do you capture the metrics that show your total cost of ownership? This stuff can take years before it gets noticed. Often, the very senior managers that set the strategic agenda move on before the real long term impact of decisions are seen.

Short term investing also leads us to this situation. We are happy to make low payments, even though they may go on for twice as many years, than recognize the true cost of ownership of IT staff. Efficiencies in turn-around and responsiveness are much harder to sustain when your IT staff is not your own. Are we willing to finance a car over 7 years just so the monthly payments are $300? Never mind that the car may not be worth much after 7 years of daily use.

There are exceptions of course. But generally speaking, what incentive are we creating for young people to want to enter the IT Tech Sector in the US?

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