IT Skills Shortage: The Other Critical Cliff Facing Enterprises

By Corinne Bernstein  |  Posted 2013-02-28

IT Skills Shortage: The Other Critical Cliff Facing Enterprises

NEW YORK—While business leaders are worrying about how one cliff will constrain U.S. economic growth, there's another critical ledge that should concern them: an "IT skills cliff."

The term—which Bob Miano, president and CEO of executive search and recruitment firm Harvey Nash plc, used at an event his firm held Feb. 27 here—refers to shortages of skilled technology professionals.

This abyss created by the IT skills shortfall in areas including Java, .NET and C++ could severely curtail future U.S. economic growth, Miano told eWEEK. He compared it to the fiscal cliff that would result from sequestration—the politically charged combination of federal tax increases and spending cuts due to take effect March 1 that some analysts say can have dire effects on the U.S. economy.

"Unlike the fiscal cliff, where we are still peering over the edge, we careened over the 'IT skills cliff' some years ago as our economy digitized, mobilized and further 'technologized' and our IT skilled labor supply failed to keep up," Miano wrote in a paper released at the event.

The shortage of IT talent is real and likely to accelerate in the near term, according to Miano. "It is not a cost issue but a demand issue," he said.

Although discussions about skills gaps can become political—as some are inclined to dispute the existence of a shortage—others agree with Miano.

An IBM study released late last year found that the most acute need for IT skills is in the areas of mobile computing, cloud computing, social networking and analytics.

Also in demand are security skills. A shortage of security experts with leadership and communications skills poses a direct challenge to global organizations, according to a new study from International Information Systems Security Certification Consortium, or (ISC)2.

Employment trackers say the IT jobless rate is less than half the U.S. unemployment rate, hovering just under 8 percent. In some IT job segments, Miano said, the unemployment rate is 1.5 to 2 percent.

Three key means of meeting demand for IT talent, he said, are encouraging more students in the United States to pursue computer science careers, enabling foreign IT talent to immigrate to the U.S. via H-1B visas and tapping IT workers overseas.

Taking aim at U.S. economic and employment challenges, political commentator and former Hewlett-Packard CEO Carly Fiorina called for immigration and education reform, as well as finding ways to spur innovation and strengthen small businesses. Speaking at the Harvey Nash event, Fiorina said, "Our economy will continue to underperform unless we can deal with structural" obstacles and find long-term solutions to these issues.

"We have to have an ongoing fact-based dialogue about these challenges," Fiorina told eWEEK. "There's too little fact-based longer-term discussion in the public square and a lot of hyperbole-laced short-term discussion."

That includes "getting great teachers in front of" students; simplifying tax code and the regulatory environment for small businesses; fostering innovation through gender, ethnic and cultural diversification; and passing immigration reform through "delicately crafted compromise," Fiorina said.

The Immigration Innovation Act of 2013, introduced in late January by a bipartisan group of 10 senators, would increase the H-1B visa ceiling from 65,000 to 115,000, and could be adjusted to as high as 300,000.

The H-1B program enables U.S. businesses to "employ foreign workers in specialty occupations that require theoretical or technical expertise in specialized fields, such as scientists, engineers, or computer programmers," according to the official U.S. government Website.

"Immigration is our life blood, and we need a comprehensive, long-term plan," Fiorina said.

IT Skills Shortage: The Other Critical Cliff Facing Enterprises

Harvey Nash plc uses a combination of U.S.-bred talent, immigrants and outsourcing to fill overflowing demand, Miano said. "Over 50 percent of my contractors are H-1B" to fill in gaps in .NET, Java, C++, SQL and other areas. We have to either grow more here, import more or outsource. You only have three options."

And what about the other cliff—concerning the federal budget? As the hour glass runs out and there's "little real effort under way to avert automatic budget cuts that take effect" March 1, politicians, businessmen and others consider the implications on the job market and the economy, according to a Feb. 27 article The New York Times.

If the U.S. economy, now recovering slowly, fell into a recession, "there would still be a need to replace people in IT—but for utility-type functions. However, innovation would suffer," Miano told eWEEK. "During the recession of 2008, we still had to import H-1Bs. In 2008 and 2009, for example, we did not focus much on digital media. If we don't move on [new technologies], other countries will take the lead."

Uncertainty has made business planning difficult, Alice Hill, managing director of career and recruiting site, told eWEEK in an email. "There's still growth and opportunity, but not as much as there could be if we didn't have this question hanging over our heads. One brighter spot is cyber-security where government budgets are a little more secure, so that area is less likely to be affected," she wrote.

However, Hill explained, technology is integral to defense, and military contractors, particularly small ones, are apt to feel the pain of cuts because they depend more on government awards than large, diversified companies.

Fiorina sees "room to cut" inefficiencies. "If people manage smartly through this process," she told eWEEK, "it doesn't need to have such an impact on the economy or the people."

Overall, Fiorina expressed optimism about the long term. "The 21st century is unlike any other in human history," she said. "This is the first time where any person anywhere can get any piece of information that they want. This is a brave new world. The 21st century will be defined by brain power."

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