America's new deficit: The shortage of information technology workers

ASEE Prism, Feb 1998

Just a few years ago, java was coffee, C was a passing grade, and web masters had eight legs. Today, experts in Java computing and C programming command a premium in the labor market, and an army of human Webmasters keeps information updated on the rapidly expanding World Wide Web.

Java, C, the Web, and the Internet are all part of the burgeoning information technology (IT) field-a field that is changing the U.S. workforce. The demand for workers who can create, apply, and use IT extends far beyond computer and software industries. Manufacturing and services, transportation, health care, education, and government fields all increasingly depend on IT to function.

The United States has much at stake in ensuring an adequate supply of IT professionals. Severe shortages would compromise organizational productivity and the nation's ability to develop leading-edge products and services as well as the growth and global competitiveness of important U.S. industries.

Current statistics, however, indicate a shortage already exists and will only worsen if more energy is not directed toward increasing the IT workforce.

Job Growth and lob Production

Employment in the U.S. computer and software industries has almost tripled during the past decade, according to the Bureau of Labor Statistics, and every indication supports the belief that demand for these workers will continue to grow.

The bureau projects that between 1994 and 2005, the United States will require more than one million new computer engineers and scientists, systems analysts, and computer programmers to fill 820,000 newly created jobs and to replace 227,000 workers who leave these fields as a result of retirement, change of profession, or other reasons. (See chart.)

The demand for IT professionals is growing particularly fast in the service sector (not including transportation, communications, finance, insurance, real estate, and wholesale and retail trade). Rapid technological change in combination with the growing complexity of information technologies and their applications is accelerating the trend toward outsourcing some computer-related functions. The U.S. Department of Commerce's Office of Technology Policy's research indicates that companies recognize the need to rely on outside experts to keep pace with technological innovation and to assemble multidisciplinary teams to meet their unique needs. Because of this expanded reliance on outside experts, the service sector will probably demand the lion's share of all increases in IT professionals over the next decade.

By 2005, the bureau projects, the number of computer engineers and scientists employed in the service sector will increase by 142 percent, the number of systems analysts by 158 percent; and computer programmers by 37 percent. In contrast, the number of computer engineers and scientists and systems analysts in the manufacturing sector should grow much more slowly (approximately 26 percent and 48 percent, respectively), while the number of computer programmers should decrease by about 26 percent.

Worker Shortages

A recent survey of mid- and large-size U.S. companies conducted by the Information Technology Association of America concluded that about 190,000 U.S. IT jobs remain unfilled due to a shortage of qualified workers. In another study, carried out by Coopers & Lybrand, nearly half the CEOs in the fastest growing U.S. companies reported that they had inadequate numbers of IT workers to staff their operations.

Current statistical frameworks and mechanisms for measuring labor supply reveal the following additional information about IT worker shortages.

Rising Salaries. The strongest evidence that a shortage exists is upward pressure on salaries. The competition for skilled workers has contributed to substantial salary increases in many IT professions. A compensation survey conducted by William M. Mercer, Inc., an international human resources consulting service, indicates that average hourly compensation for operating systems/software architects and consultants rose nearly 20 percent from 1995 to 1996. In comparison, Mercer reports compensation for all U.S. employees rose only 4.2 percent during the same time period, and 4.1 percent from 1996 to 1997. A survey conducted by the Deloitte & Touche Consulting Group revealed that salaries for computer network professionals rose an average of 7.4 percent from 1996 to 1997. Computerworld magazine's annual survey found that in 11 of 26 positions tracked, average salaries increased more than 10 percent from 1996 to 1997. For example, systems analysts' salaries shot up 15 percent and programmer/analysts' salaries rose 11 percent, while the salaries of directors of systems development increased an average of 10 percent.

Starting salaries for graduates with bachelor's degrees in computer science also have increased, averaging approximately $36,666, according to a May 8, 1997 article in The Wall Street Journal. Experienced programmers can command salaries ranging from $45,000 to $75,000, according to a June 3, 1996 article in the Washington Post.