The Employment Disconnect

Eric Chabrow, writing for CIO Insight, discusses H1B visas, which enable skilled foreigners to work in the US. Numerous IT professionals feel the program is driving down wages and displacing American workers; the argument is that H1B workers are captive to their employers (this is an employer sponsored visa), and are therefore willing to work for less and not complain.

There are a large number of very skilled American IT workers out of work. Every time there is a discussion of H1B visas on magazines like Computerworld, commenters say that the visas should be abolished. Additionally, there are concerns that companies are focusing on too narrow skill sets, thus displacing veteran IT workers who could actually retrain themselves quite easily.

However, Chabrow points to the IT outsourcing industry as the main cause. An Indian worker costs $12,000. An American worker costs $100,000. It's that simple, although American companies should also be more willing to hire and retrain older workers who have used other programming languages.


CIOs gripe they can’t find skilled workers; displaced IT pros complain they can’t find decent jobs. How can both be right?

In the musical "Fiddler on the Roof," the protagonist Tevye listens to a fellow townsman’s political argument, and says, “He’s right.” But when a stranger takes the opposite view, Tevye also responds, “He’s right.” “He’s right and he’s right,” another villager says. “How can they both be right?” To which Tevye replies, “You know, you’re also right.”

That scene reminds me of a troubling development in IT: the employment disconnect. On one hand, IT employment is at record levels, reaching nearly 4 million workers in the last quarter, and CIOs gripe they can’t find enough qualified people to fill business-technology positions.

On the other hand, many out-of-work or underemployed IT pros complain that they’re highly qualified and experienced, yet can’t find suitable jobs. They contend employers retain foreign nationals—whether here on H-1B or other visas or as offshore outsourcers—to save money rather than hire higher-priced Americans. “The need for the perfect candidate is just an excuse to hire H-1Bs,” wrote one IT pro who participated in our online discussion on this topic (go.cioinsight.com/disconnect).

Listening to their reckonings, I have to agree with Tevye: They’re both right.

The crux of the problem could be a mismatch between what’s being offered and what’s being sought. Skills listed on some résumés posted on the IT job site Dice.com don’t match the requirements employers list in their job offerings, says company senior vice president Tom Silver, who adds that employers are increasingly selective about hiring people with specific skills. Another participant in our online dialogue agrees: “The demand for new skills is on the rise; the demand for older skills is declining, and IT workers [with legacy skills] are being displaced.”

It’s a valid explanation, but not the complete story. Ample anecdotal evidence exists of veteran IT workers who can’t find decent jobs. In our online discussion, a self-described “much maligned C-level IT manager” characterized the skills shortage as malarkey. Her company has outsourced tech jobs to India, estimating the annual employment costs of a “fully loaded” Indian developer at $12,000 versus $100,000 for a North American worker. “The options were: Outsource to cut costs or go out of business,” she wrote.

Advocates for displaced IT pros claim the villain preventing them from getting well-paid jobs is the H-1B visa program, which allows employers to import 85,000 skilled foreign workers a year. An estimated 40 percent of those H-1B visa holders apply for IT jobs.

Assuming that percentage represents the number of IT pros coming to our shores, American firms hired some 33,000 visa holders for IT jobs during the past year—just under 10 percent of the 357,000 new IT jobs created. During the past year, according to CIO Insight’s analysis of government jobs data, the number of unemployed IT workers rose by 17,000 to 97,000.

The federal government could cut back on visas and pass laws to discourage outsourcing. And U.S. businesses should do more to train veteran IT workers to develop the skills they need. But with so many American companies operating globally, coupled with the weak economy, the likelihood of this helping displaced IT workers is negligible.

I don’t see an obvious solution to this disconnect. Do you?