Skills shortage? Not if you pay or train

It may be less expensive to train existing workers than to hire new ones, according to IDC research

One of the most politically charged phrases in IT these days is "skills shortage." That phrase may come up Tuesday when the Senate Judiciary Committee, as expected, takes up a series of industry-sponsored amendments to the immigration bill.

But companies in search of workers with the most sought-after IT skills may be better off investing in training programs than hiring, according to IDC, which has completed several research papers on IT hiring and skills issues.

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Cushing Anderson, one of the analysts who worked on the reports, said the cost of a new hire for an emerging technology skill may be 1.5 to three times the salary. That makes training existing workers a much less expensive option, with the possibility of better results with an employee who's already proven to be a good fit, he said.

Moreover, the salary rate of the new employee could be 15 percent to 20 percent above what the company expected or wanted to pay, said Anderson. The costs only add up because "when the skill becomes plentiful, you don't reduce their pay," he said.

The cost of a new hire could also include recruiter finder fees, which can cost from 25 percent to 100 percent of the salary. It might also be necessary to fly in candidates for several rounds of interviews and pay for relocation costs, said Anderson.

A better approach, says Anderson, is to prepare for future technology needs by investing in staff training.

Training can range from having an employee team up with someone with the skills the firm needs to attending fast-track boot camp training sessions. Even paying for a master's degree in an information technology area might be less expensive than hiring a new employee.

The idea of a skills shortage is more related to what a company is willing pay, said Anderson. "There is always someone willing to move jobs if you're willing to pay for it," he said.

The areas in the most demand involve big data usage and the ability to pull social networking capabilities into enterprise applications and Web sites. Other in-demand skill areas include Cloud and cloud management; mobile; enterprise architecture; video networking;converged networking systems; and security, according to Anderson.

One company already investing in training is Rackspace, which recently announced plans to hire 1,000 people over the next two years. With the help of a $2.5 million training grant from the state of Texas, it will be training its new hires and existing employees in critical skills.

The Senate committee is waiting for a series of amendments from Sen. Orrin Hatch (R-Utah) on recruiting requirements. The bill now calls for employers to make an effort to find an "equally qualified" U.S. worker to fill a spot, as well as eliminate displacement provisions.

The bill would bar displacing a U.S. worker within 90 days before or after applying for H-1B visa. It also calls for a government-operated online database of jobs that employers are seeking to fill with an H-1B worker. The idea is to make sure U.S. workers have the opportunity to apply for a job.

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Patrick Thibodeau covers cloud computing and enterprise applications, outsourcing, government IT policies, data centers and IT workforce issues for Computerworld. Follow Patrick on Twitter at @DCgov or subscribe to Patrick's RSS feed. His e-mail address is

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This story, "Skills shortage? Not if you pay or train" was originally published by Computerworld.


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