Labor Shortage Sparks Innovation

Labor Shortage Sparks Innovation

By Bob Starzynski

Companies will experiment with a host of solutions in 1998 to resolve the No. 1 issue facing Washington area technology companies - the shortage of skilled labor.

Legislatures and technology councils also will be presented with countless options and decisions in trying to bring the supply of technology workers closer in line with the demands set by growing companies.

"Out of necessity, companies will try some novel experiments and some of those will have high potential," said Robert Templin, president of Virginia's Center for Innovative Technology in Herndon.

Some of those experiments will involve in-house training programs at companies and the recruitment of liberal arts students, rather than traditional engineering and computer sciences graduates, he said.

HTCM photo

Dyan Brasington, president of the High Technology Council of Maryland

A study released last month by the American Electronics Association said that "industry leaders have noted that the largest problem many electronics and information technology companies face is an inadequate supply of high-skilled labor. ... Employees possessing the right credentials are in high demand, witnessed by the thousands of unfilled jobs across the nation at high-tech firms."

The Northern Virginia Technology Council claims that Washington's Virginia suburbs alone have 19,000 unfilled technology positions at any given time.

The labor shortage has become a cliché of sorts over the past year, with many voices speaking out about the problem. However, Templin and other industry officials expect that solutions will start cropping up in the coming year.

"Companies will crank up the training programs they haven't used in years," said Robert McGovern, president and chief executive officer of NetStart Inc., a Herndon, Va.-based company that operates an online job bank called CareerBuilder.

Annual Average U.S. High Tech Employment

Year Employee Count
1990 3.97 million
1991 3.86 million
1992 3.77 million
1993 3.78 million
1994 3.85 million
1995 4.01 million
1996 4.26 million
Source: U.S. Bureau of Labor Statistics
In recent years, pressure on balance sheets and income figures forced many technology companies, especially professional services businesses, to cut down on in-house training programs, McGovern said. "Now, the tides are turning again. We are accepting the fact that we will have to grow these people. They won't all come with the necessary experience."

April Young, executive director of the Potomac KnowledgeWay Project in Reston, Va., disagrees.

"I'm a little skeptical about whether companies will look more to [in-house training]," she said. "These companies want five or 10 years of experience. You can't get that overnight."

Young argues that the real efforts will be made on a regional basis, including launching new work force programs through educational institutions. While universities and community colleges have already begun drafting plans for new initiatives, proprietary institutions will play a more active role in 1998, she said.

For instance, Strayer College, Gestalt Systems and Learning Tree International already have good courses and financing programs in place for information technology courses. Many of these programs are already in place and simply need to garner public attention, Young added.

Some of the most significant and concrete efforts will be at the state government level, according to industry group leaders.

Templin said that Virginia will launch its first Workforce Development Center in Northern Virginia after the first of the year. A site for the center has not been selected. Virginia Gov. George Allen already approved $2.4 million in funding for the industry center, which will be managed by the Northern Virginia Regional Partnership and will create and certify training programs for the industry.

U.S. High-Tech Annual Average Wages
Average Private Sector Wages

Year High-Tech Private Sector Wage Differential
1990 $43,819 $27,921 57%
1991 $44,265 $27,853 59%
1992 $46,266 $28,569 62%
1993 $46,302 $28,160 64%
1994 $46,894 $28,051 67%
1995 $48,374 $28,250 71%
1996 $49,586 $28,582 73%
Source: U.S. Bureau of Labor Statistics

Templin said that he is pushing for funding of five additional centers in the next session of the state's General Assembly. The total price tag for those centers is estimated at $10.6 million. Eventually, he would like Virginia to have a total of 15 centers.

Additionally, Templin will ask the General Assembly to allocate $2.5 million to expand the resources for the state's Department of Business Assistance, which could in turn directly impact the work force.

And, the High Technology Council of Maryland has an agenda of its own.

Dyan Brasington, president of the council, said that the group's No. 1 legislative priority for 1998 is for the state to provide tuition relief to students entering the technology field with Maryland companies. Brasington estimates that the idea, which also is on the agenda of Gov. Parris Glendening, has at least an 80 percent chance of getting legislative approval in 1998.

Other potential legislation in Maryland includes tax credits and grant/credit programs in both high technology and biotechnology, according to Brasington.

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