There is no IT labor shortage in the U.S. There is no dearth of software developers. Instead, this shortage is reinforced through repetitious pronouncements by industry of the impending labor crisis, and is used as outsourcing ammunition. In reality, organizations outsource because of two simple and related factors:
- Business believes IT costs are too high and by outsourcing IT labor, cost is reduced.
- IT doesn’t deliver value-add business software.
I take my vehicle to a certain mechanic. It’s not the cheapest mechanic, but I go there anyway. Why? Because I’m willing to pay the 25% premium knowing that the job is going to get done right and I’m not going to be back at the mechanic with the same problem two days later. That’s a big deal to me. But if the mechanic charging the 25% premium produced the same results as the shady guy down the road offering a 50% discount, I’d likely switch mechanics. Why pay a premium for inferior service? The same happens with software development. Historically, companies have not received the benefit that goes along with paying higher salaries. Why pay someone $90k to deliver crap when someone can be paid $45k to deliver the same crap? As developers, we can blame big business for outsourcing our jobs. Unfortunately, we have to blame ourselves for not producing.
I may be guilty of simplying a complex situation. Certainly, there are other credible factors that influence the outsourcing decision.
- Businesses may be wise to diversify their resource pool in a way similar to how a financial portolio is diversified. That makes sense.
- In some cases, specialized talent or skills are required. And that means finding and working with the most knowledgeable supplier.
But these are not the reasons why business is outsourcing IT. While an IT labor shortage is often the reason given, in reality IT is shipped out because the cost is high, and we don’t deliver a product comparable to the price paid. Here are some simple numbers debunking the IT labor shortage myth, with sources cited.
- The percentage of math and computer science bachelor degrees awarded in 2003 was 5.2%, almost equal to the number in 1985 (6.0%) and greater than the numbers in 1995 (3.3%) and 2000 (3.9%).
- The number of annual Computer and Information Technology degrees awarded after the turn of the century have exceeded that of the most awarded before 2000.
- The number of Computer and Information Technology degrees awarded in 2006 was greater than the number awarded in 2001.
- The number of new undergrad majors declared in 2007 increased approximately 10 percent.
It appears there is no conclusive evidence suggesting either a current or impending IT labor shortage. There is no doubt that the IT boom of the late 90’s influenced many people to major in IT, and is the direct cause of the spike in degrees awarded between 2002 and 2005. However, I’m not convinced that we’ve seen a lack of interest in IT as a major so much as I’m convinced that we’ve experienced an abnormal surge in graduates over a short period due to the dot com era. Recently, we’ve adjusted back to normal levels. Regardless, we are not experiencing an IT labor shortage because the evidence clearly shows there are more IT graduates in the U.S. today than ever before. And these graduates will be in the workforce for the next 25 to 30 years. While industry claims there is a shortage of programmers, what they really mean is that there is a shortage of cheap programmers. Again, why pay premium price for inferior results.
In fact, when comparing the numbers from IT with that of other disciplines, there are some striking parallels.
- The fastest growing occupations in the U.S. include health care (21.7% increase), IT (38% increase in computer software engineers through 2016, but a 4% decrease for computer programmers through 2016) and education (12% increase projected through 2016)()
- Trends in bachelor’s degree conferred show that each of the three listed has not grown substantially between 1994 and 2005. However, IT does lead the way.
- Degrees awarded in both Healthcare and Education have not increased in alignment with the projected growth for those occupations. In fact, Education has been stagnant for years, and only recently has Healthcare returned to the levels seen in the mid-80’s.
- Enrollment in degree granting institutions increased approximately 20% between 2000 and 2005. Therefore, if the percentage of degrees remains the same, or even increases slightly, we’re still producing more IT graduates than ever before.
I don’t find information that suggests IT is in any more dire straights than other occupations experiencing phenomenal growth. I certainly doubt we’ll outsource Healthcare or Education, unless we also want to outsource the ill and our children. Instead, Healthcare and Education reform help address these situations. While we can argue as to the short term success or failure of these reform efforts, the long term affects are positive.
It might sound as if I’m sending conflicted messages in this post. I’m not. To be clear, I cannot blame organizations for wanting to outsource IT. I can easily produce numbers illustrating IT failure. They are not hard to find. I can blame organizations for lying about why they want to outsource IT. Isn’t it quite possible that instead of outsourcing IT, we should instead consider IT reform and fix the mess we’ve created? Instead of feeling victimized and helpless, we can take the first steps toward reforming software development. The best path to reform is through providing a premium service that produces the value-add software business needs. We control our destiny.
Additional information on the IT Labor Shortage is also easy to find. Just Google IT Labor Shortage. Another rather lengthy article you might find interesting is Debunking the Myth of a Desperate Software Labor Shortage by Dr. Norman Matloff.