American IT companies can not find workers

http://www.marketwatch.com/story/tech-ceos-forced-to-go-begging-for-workers-2011-09-14

Tech CEOs forced to go begging for workers


SAN FRANCISCO (MarketWatch) — Like most technology start-up executives, Larry Warnock is having trouble finding enough workers for his fast-growing company, the encryption-software maker Gazzang. Especially scarce in the company’s hometown of Austin, Texas, are experienced developers needed to design, code and test new products.

“We need people who’ve been there, done that,” said Warnock, 50, who’s spent close to three decades in the software industry at firms such as Siebel Systems, now part of Oracle Corp. /quotes/zigman/76584/quotes/nls/orcl ORCL +1.31% , and Documentum, now part of EMC Corp. /quotes/zigman/225273/quotes/nls/emc EMC +2.00%
“It may sound like whining when unemployment is this high, but there is a shortage of talent. We can’t find enough people,” he added.

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To broaden the search to staff up his 25-person company, the Gazzang chief executive is trying a bold new strategy: poaching from Silicon Valley.

Warnock is not alone. He’s just one of 28 Austin-area tech executives who are in the San Francisco Bay Area this week hunting for talent. They’re hosting two job fairs, one in San Francisco and another in Sunnyvale, 40 miles to the south, hoping to collect a few resumes. “A veteran developer is worth three newbies,” he remarked.

That more than two dozen busy CEOs would fly halfway across the country to spend two days recruiting demonstrates just how tight the job market has become for up-and-coming tech companies — even while the official U.S. unemployment rate remains above 9%.

It also suggests that the biggest obstacle to innovation in one of America’s most important industries is a shortage of engineering talent, not a shortage of funding.

Fighting for hearts, minds and bodies
The idea for the trip, which was organized by the Austin Technology Council, a trade group, came during a summit of 100 Austin-area CEOs in May, according to Rod Favaron, chief executive of Spredfast, a maker of social-media software for businesses.

“As we sat around, we realized we were all fighting for the same talent,” said Favaron, the former chief of Lombardi Software, which was acquired by International Business Machines Corp. /quotes/zigman/230066/quotes/nls/ibm IBM +0.47% in 2010.

It typically takes three to four months, he added, to fill job openings with “quality developers” with knowledge of object-oriented programming languages and open-source development methods. While that may not be a long lead time in a large company, it is for start-ups that are producing new iterations of software every few months.

“That’s a lot of lost capability, and I’m in a competitive business,” Favaron explained.

Systems engineers, database managers, mobile-app developers and software-product managers also are in short supply, Favaron and other Austin CEOs said. So the group decided that if they couldn’t get enough tech talent to come to them, they would go to where it was.

The home of world-class talent
“Silicon Valley has a tremendous amount of world-class talent,” said Lori Knowlton, the vice president of human resources for HomeAway Inc. /quotes/zigman/5675710/quotes/nls/away AWAY -1.00% , the Austin-based, vacation-rental company that went public in June.

The company has filled 383 open positions this year and now employs almost 900 people, she added. Two-thirds of them are in the United States, with roughly one-third working on technology.

When recruiting out-of-towners to Austin, HomeAway assures them that the city’s tech sector is now large enough to provide multiple employment opportunities, and is no longer an outpost where they’ll be locked into one company, such as PC giant and local tech pioneer Dell Inc.

That’s a common message that the CEOs will be delivering, according to Julie Huls, president of the Austin Technology Council, which represents 240 member companies. “We want people to know that Austin is a great place to build a career in tech,” she said.

Another reason the Austin companies wanted to come to Silicon Valley was to strike back at some of the Valley’s own marquee names, including Google Inc. /quotes/zigman/93888/quotes/nls/goog GOOG +1.45% and Facebook Inc., which have offices in Austin and are competing there for talent as well.

Things are tough all over
Yet that motivation speaks to a major obstacle that the Austin companies face in pushing west: They’re coming to a place where the battle for people is equally fierce.



Even companies hardwired into the Silicon Valley ecosystem have to literally pound the pavement to find workers.


It’s why Google handed out across-the-board pay raises late last year, and why nascent firms — even those with experienced management teams and backed by top-tier venture firms — are going to extreme lengths to hire.

Late last year, recruiters for the online events-organizing company Eventbrite were handing out information in front of the commuter-rail station near its headquarters in San Francisco’s South of Market district, said Julia Hartz, Eventbrite’s co-founder and president.

“Finding good people is our biggest challenge,” noted Hartz, whose company is backed by Sequoia Capital and whose husband and co-founder, Eventbrite Chief Executive Kevin Hartz, was an early investor in PayPal.

In other words, even companies hardwired into the Silicon Valley ecosystem have to literally pound the pavement to find workers.

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Julia Hartz told me that on some occasions, prospective workers would interview for a job at Eventbrite, then walk just a few yards to interview with Zendesk, a maker of customer help-desk software, which at the time shared the same South of Market office building.

Zendesk Chief Executive Mikkel Svane later acknowledged that this actually happened on more than one occasion, and not just with Eventbrite. Some candidates would additionally interview with social-media start-up Yammer, also in the same building on Townsend Street, and just a block from the train station stalked by Eventbrite’s recruiters.

“We used to laugh about it; we could see them walking over to the competition,” said Svane, who along with his two co-founders moved the company from Copenhagen to San Francisco (by way of Boston) in 2009. “I’ve been amazed at how hard it is to hire.”

Good luck, Austin
Now it’s even harder, with the arrival of a bunch of executives keen on selling Austin as an affordable alternative to the Bay Area.

Knowlton of HomeAway said a staple of her company’s recruiting effort is to drive people around Austin neighborhoods, where homes cost less than half of what a comparable piece of real estate would fetch in Silicon Valley.

“We also remind people that Texas has no income tax,” added Knowlton, who pointed out that her company “will relocate people, definitely.”

That eagerness is helping to drive up compensation costs for Texas tech workers, especially software developers who can code in new object-oriented languages such as Java, PHP, Ruby on Rails and Python.

Spredfast’s Favaron said that the 40 tech workers his company has hired this year cost him between 15% and 20% more than expected.

Another industry veteran turned start-up exec says the Austin companies might have a tough time competing with the compensation offers of Silicon Valley firms, precisely because competition is driving them higher.

“The way compensation is going in the Bay Area, it might be hard for them to match,” said Bill Harris, chief executive of Personal Capital Corp., a 40-person personal-finance start-up based in Redwood City, Calif.

Harris, a 50-year-old former chief of both Intuit Inc. /quotes/zigman/53304/quotes/nls/intu INTU +1.14% and PayPal, called the competition for tech talent “as fierce as it’s ever been.”

 

Sadly most American workers/students aren't interested in anything technical. Anything that requires intellect. They're too busy "earning" fluff degrees, obsessing over spectator sports and "reality" TV.

 

Whine whine whine.

How about they pay more?

 

Strongly disagree with this. Most people don't have the intellectual abilities in order to do a science, math, engineering type degree. I went to a top university and many people could not get through the weed 'em out courses of math and science. Moreover, software development is very hard and requires a type of brain that just isn't common. If it were, we'd have startups on top of start ups in this country. If these companies were serious about the problem, they'd be recruiting overseas, especially in Russia and Eastern Europe. Indian developers are usually quite poor.

 

+1

Im my class we started out with 161 perspective nurses, who were hand picked by the program as being the most likely to survive. My college picked that many because historically 50% do not survive the math and science components, and all Allied Health colleges have been mandated to get people out there. But they cannot sacrifice quality, because if you cannot count, then you will kill someone. So, my school picked, literally, an auditorium full of candidates. Of those 161 candidates, 48 walked across the stage.

 

Sounds like web bubble 2.0 is forming. All these start-ups probably aren't doing much productive. They are the representation of liquid green that tries to find a way to get a return on itself.

it goes like this: create app, market to millions for free, get pay model, sell to highest bidder before they realize it's not going to be the next facebook.

 

That's exactly what it is and the companies would not be complaining about finding the talent if they had the money to pay properly. They want experience for 60k a year and that's crap. Try 110k for starters.

 

Because of all of the Indian outsourcing and the H1B and L1 programs, salaries in IT have declined dramatically past 10 years. I do consulting thru agencies and my income is about 40% of what it was 12 years ago.
As a result of this, NO COLLEGE ENTRANTS ARE GETTING INTO "STEM" Studies (Science, Technology-Software, Engineering, Math).
Thus, the shortage.
This of course was caused by some lawyers lobbying for large corps in Washington and telling congress a B.S. story about a "shortage of technical people". That started the H1B program, and the rest is history.

 

There are actually a lot of start-ups chasing the Social Media dream. More than seems sustainable.

There is plenty of talent available

 

My ex wife is a nurse. I don't recall her having much in the way of math to get through. In any case she graduated, and she's dumber than shit.