What Does This Make You Think?
August 8th, 2006The Wall Street Journal ran an article last week entitled, Firms Search for Technical Talent. The article detailed that many firms are struggling to find competent people for technical openings, such as mechanical, electrical and chemical engineers, and computer science and information technology majors.
So, you’re a manager in one of those companies. I’d like to hear from some of you: what does an article like that make you think of?
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August 8th, 2006 at 6:33 am
Lots of grads, but are they equal? Salaries–follow the money trail. Retention. Outsourcing. Those are the things this article makes me think of.
I work as a manager for a multi-billion dollar global automation company. While the article talked about the many engineers being produced in China, India, and elsewhere, what the article *didn’t* say is that only about 10% of grads from those programs are being trained to a similar caliber as their American counterparts.
The article also mentioned that trends in Engineering and Computer Science fields have been A) relatively flat and B) are not producing the number of grads that the US needs. What it did not say is that engineering salaries have remained relatively flat as well. Computer Science, by comparison, has enjoyed a relatively steady climb.
If I were advising a college-bound grad, I would definitely recommend Computer Science over engineering, from a pay perspective.
With regard to retention and recruitment, efforts such as Dean Kaman’s inspritanion to develop/support the FIRST organization (http://www.usfirst.org/) is helping. Meanwhile Toyota’s dominance and recent assumption of #2 spot of the Detroit “big three” automotives is hurting.
It seems that the trend in industry is to be quick and nimble, which largely means outsourcing. Many companies are using outsourcing as a means to be able to react quickly to market trends–it’s easier and faster to stop doing business with an outsourced partner than it is to lay off a bunch of employees within a given company, but that also makes it difficult to develop long-term talent.
August 8th, 2006 at 11:01 am
shoffer and others,
I tend to agree that such articles bring up the spectre of outsourcing and the tightness of the market. Off-shore outsourcing is a definite part of our future whether we like it or not, however, my own experience (consulting manager in a mid-sized IT/management consulting firm) is that the ability to do off-shore is not something you can quickly obtain, even if you “buy it”. Therefore, the shortage we are seeing in our company right now is something I expect for awhile, however, I think we will see more IT services moved off-shore. I do not think, however, it is much easier to stop an outsourcing contract than to lay off workers…I think both are exceedingly difficult assuming you will have to have some “crew” available afterwards to continue at least some efforts.
I was interested to hear about the “10%” statistic regarding caliber of grads…shoffer, if you have the source, I would really like to see it as I had not heard that before. Thanks.
Keep up the good work.
August 8th, 2006 at 12:01 pm
There’s so much that this made me think of. Universities are basically failing the business world because there’s no feedback model in place. Businesses are failing their people because they don’t want to spend money on the “expense” of training someone. Everyone is afraid to spend money to get results because it easier to just limp along and pretend that there isn’t an epidemic of mediocrity in the United States today. The burden of keeping up standards has fallen to the individual worker, who are, slowly, one by one, giving up. Its an abdication of responsibility.
Ok, maybe not - that’s a little dramatic. But, boy it sure feels that way sometimes.
August 8th, 2006 at 2:16 pm
I have a different view where i sit in the world right now. I live and work in the middle of oil and gas engineering, managing a technical group full of engineers and technical staff designing and building equipment for the oil and gas processing industry. I also interact a lot with engineering, procurement and construction (EPC) companies and see much of what is going on. Some of the trends here:
- Average increase in salary 2005 and 2006, 10%
- Bonus increases from average of 10% to 25%+
- 50-60% total turnover in 12 months in all companies, most leaving simply for dollars, very significant dollars.
- Flexible time, benefit increases, and other perks being added daily
Now with respect to finding talent, it is so short I can’t begin to describe it. Many companies have hundreds of open positions for process engineers, project managers, or other technical positions. However the schools have not been able to keep up to the demand due to the former cycle in the industry. There were no new people added because there were no new jobs created until the price of oil increased in the last 3 years. It takes time to train people.
The new grads that are coming out are very demanding, they have options and multiple offers to consider. I have started recruiting using the co-operative education system and am even considering paying for a students final year of university if they commit to working for us for 2 years upon graduation.
You can not be a “bad” boss and still expect to have staff, people will leave. All they have to do is say yes to one of the many offers they have received. This is why I find that the tools we trade here are so important (among other reasons).
August 8th, 2006 at 11:24 pm
I’ve been trying to find the source for the 10% metric, and alas, I’m not coming up with it at the moment. I did find a very interesting article here: http://memp.pratt.duke.edu/downloads/duke_outsourcing_2005.pdf
Here’s a key paragraph from that article…
“Graph 2 depicts the annual production of bachelor’s and subbaccalaureate degrees in Engineering, CS and IT awarded per million citizens. These data imply that per every one million citizens, the United States is producing roughly 750 technology specialists, compared with 500 in China and 200 in India.”
Another article, http://insidehighered.com/news/2006/06/13/numbers, basically highlighted similar stats, and cut degrees from India and China in half.
Finally, Chaser brings up an interesting point–because of the huge increase in oil costs, the engineering work that he’s involved with is taking off in a big way. We are loosing some employees to attrition, but not in the same way that he describes.
August 8th, 2006 at 11:29 pm
I found the 10% reference:
“According to a 2005 McKinsey and Company Global Institute labor study, only about 10 percent of China’s engineers, and 25 percent of India’s, can compete in the global market. That report found that a higher percentage of engineers in low-wage nations like Poland, Hungary, the Czech Republic, and Malaysia, than in China and India, are competitive in the global job market. In fact, of the nations surveyed, China tied for last with Russia, behind Brazil and the Philippines, for the percentage of engineers that can compete in the global market. And yet, Hungary and the Philippines have not garnered a mention in the blitz of press conferences about American competitiveness.”
Full article: http://www.insidehighered.com/news/2006/03/03/engineers
August 10th, 2006 at 1:54 am
I am a software engineering manager at a computer hardware company. Hiring a competent engineer is very challenging for me. Often people will know technical details but when it comes to applying it, they are weak. I will now often sacrifice a technical expert in a certain area and go for the analytical skills. I will look for people that may not know but they have a passion for finding out. I believe many managers don’t know how to hire an all-star team.
Going back to the analytical skills or lack thereof. I believe the education system, both nationally and internationally, need to focus more on building analytical skills and teaching people how to think thru problems. This is the most important skill to have in any technical job.
August 18th, 2006 at 5:04 am
I am not in the type of company that you mentioned but my first thinking was about the book that I am reading at the moment “The World is flat” as for your suggestion. In particular there is a chapter “This is not a test” where are described the pitfalls of american education system compared to that of emerging countries of the new flat world; the lasts will probably act as tank to supply heads for “developed” countries. I think that the book is really a must reading and helps to enlarge perspectives.
For all the technical guys I suggest also a reading for a new technology that probably will contribute as a flattening agent:
http://www.informationweek.com/news/showArticle.jhtml?articleID=191000069&subSection=All+Stories
August 18th, 2006 at 8:42 pm
I’m at a Fortune 50 company in the mid-Atlantic region. We have no problem finding entry level or experienced talent. This area is very fortunate to have plenty of tech universities and tech companies within a 150 mile radius. So, I think this article is regional, not national.
August 21st, 2006 at 9:46 pm
Shoffer, Enoak, et al…
Good points on the outsourcing. As a professional outsourcer (meaning a leader in a HR firm where we do that for large clients), I can attest to the difficulty experienced in “handing over” roles, responsibilities, deliverables, and business goals to an outsourcing provider. I’ve seen first hand how asking “lesser” trained staff or former client EEs (they are NOT equal in skills - EEs bring much more to the table) to adapt to a new business model overnight does not work well in most cases.
As a former manager of entry-level and expereinced recruiting for a consulting firm, I can also attest to the skill differential quoted in other postings and the upward trends in technical pay (and the demands of grads). Nowadays, the market may not be as “hot” for grads as it was several years ago, but the issues still apply. The grads from several years ago (define as 3-5 years ago) are now experienced and were “trained” during their “coming out” to ask for more.
A quick note: My current client (a high tech firm) recently “downgraded” Russia from a high growth/hiring to low. I think that says something - a reflection of recent experiences and an adaptation to skills that exist - or don’t!
August 26th, 2006 at 5:52 pm
I’m a divisional engineering manager for a large multinational automation equipment company located in Tucson, Arizona. I can certainly attest to the challenges of finding engineers with relevant experience in automation design - and I’ve been actively looking all over the continental u.s. for the past 6+ months!
There’s certainly a lot of candidates that profess to have automation design experience, but a few questions into the interview, it is very clear there is content lacking…reminds me of Atlas Shrugged (Ayn Rand)..where did all the engineers go?
August 27th, 2006 at 11:08 am
Now THERE is a great book!