Imaginary STEM labor shortage

Imaginary STEM labor shortage

The only thing worse than training employees and losing them is not training employees and keeping them.  Zig Ziglar

Back when the economy wasn’t in the dumpster, I was talking to a friend who works at one of those Internet (with a capital I) companies.  He was complaining about their inability to find people with the right qualifications.  After spending time talking with him, I ascertained that what his company really wanted was for someone in the same position at a different company to be laid off so that they could hire them.

His company had a very exacting list of qualifications and wasn’t willing to train any potential employees.  They wanted someone off the shelf, so to speak, and weren’t going to take anyone without those qualifications.  On the other hand, they would wait months rather than train the employees themselves.  It didn’t make much sense to me at the time.

FrauTech has written recently about STEM recruiting games and ponzi schemes.  Basically, companies are apparently doing what I described above as a way to drive down market prices and allow more H1B visas.  It turns out that she was on the right track: the Wall Street Journal recently posted an article saying exactly the same things.  There’s also an additional response to the feedback received by the author.

The gist of it is that the ‘labor shortage’ is a hoax made up by companies who don’t want to train people and, more importantly, don’t want to pay market wages.  If they claim they can’t get qualified labor, then they’ll be able to open up more visas and pay less money.  The article claims that, if there is a labor shortage, then it’s because of the hiring practices of the employers and not a real lack of potential employees. He then goes on to write about ways that employers can find ‘appropriately trained’ candidates without having to invest in much in their workers.

I’m very surprised these companies don’t go ahead and train the employees after signing an agreement stating that the employee has to stay with the company for a specified amount of time before leaving.  If they leave before that date, then they have to reimburse the company for the money paid for their training or education.  This is just one way to get what you want from an employee…but you have to be creative.

Another complaint of mine is the notion that education and training are the same thing: they aren’t.  One point made in the article is that the companies are often blaming higher education for lack of ‘skilled’ workers.  We have discussed (with some disagreement) in previous posts that college really should be a general education to allow people to move into several possible areas.  Providing specific training for a specific job is actually a disservice to the student.

This last point is especially important considering the prevalence on non-compete agreements that many engineers must sign.  This practice may be causing part of the problem: an employee can’t go to work for another company doing the same job as they had before.  So my friend may be looking for someone with experience doing the exact same job…but that person can never take that job.  However, it also causes almost 1/3 of engineers to leave their chosen field entirely.  If colleges train students for specific jobs that the students have a high probability of leaving, then the colleges have not done much to help the student.  (However, I can see this being a great business model for the university – students have to come back to learn other skills, right?)

Therefore, the supposed labor shortage is not a shortage of labor but a consequence of current hiring practices.  There are a lot of options to fill open positions at minimal expense to the company, but it means the companies have to get creative, pay market wages, and stop shooting themselves in the foot.


As an engineering graduate, that is not currently working as an engineer but looking, it is very frustrating to hear talk of a ‘labor shortage’ in the news. For one example: I have was told that I’d be perfect for a job, except I didn’t have enough experience for it. It was an entry-level position that in the synopsis said you didn’t need to have experience to be considered. The company ended up not hiring anyone for the position and it was posted a week later on job boards. They said they needed the position filled soon, but they’d rather not hire someone than train them. Other jobs I have seen posted on job boards for a year straight. The same exact job in the same exact company re-posted every month or so. Are you telling me a big company (Goodrich in this case) can’t find anyone qualified for an entry-level position in San Diego? I’ve applied multiple times to this job, even telling them I wouldn’t need relocation help, and still nothing. And, yes, I am qualified for the position according to the criteria they posted.

Sorry for the mini-rant, but like I said it is frustrating to hear companies talk about a labor shortage when there are plenty of young STEM graduates that would do almost anything to get a job at the moment.

When Mr. ME was searching for a job after I knew where I was going to graduate school, I was appalled by how many job posting were “Entry level: minimum 5 years of experience”. There were also many postings with “Only candidates with 3 years of experience in [software] will be considered”, but for very specific software packages only used by a handful of companies, and too expensive for universities.

I know too many competent but unemployed engineers completely willing to relocate *anywhere* to believe in the labor shortage. I also know enough scientific and technical communications majors looking for jobs to know that there are people out there to help put together training programs.

I don’t agree with you about this. In my experience as an interviewer for two big technology companies, we were always looking for general background knowledge, not a specific set of tools.

We did expect candidates to have done some work in a similar area before – but I thought this was perfectly reasonable. If you’re hiring computer architects, it’s reasonable to expect that the interviewee has *at least* spent a few months working on a course project or something like that was closely related to modern computer architectures. In fact, we even relaxed this requirement in one case when we had a really good candidate show up with no experience in this field.

I do agree that the companies may be playing games to try and get the H1B limits increased, but I doubt this has anything to do with wages. The simple fact is that the US is not producing enough competent engineers. “Fixing” higher education to produce enough engineers is a hard problem. In the meantime, the government has a hard choice – don’t increase the H1B cap and watch jobs go overseas or increase the cap and deal with all the political problems that will ensue.

I think what I find oddest about this situation is companies that are willing to leave positions unfilled if exactly the right person doesn’t come along… Has making money stopped being an incentive in the current economic chaos?

I work with many H1B’s and they are making market wages. My boss told me that. So, if that’s the case, where is the savings in hiring them?

From the little I know about H1B visas the biggest problem I’ve had with them is the lock that the sponsoring company has on the visa holder. Once someone comes over here and discovers that their salary isn’t nearly as impressive as it seemed from afar, there’s not a lot they can do. If they lose their job they have to scramble to find a new sponsor (lots of luck) or go back home.

I’ve always thought that H1B visas should be portable — usable for any job, any company, anywhere in the US, for a fixed period of time. If a company really feels that their best interests are served by hiring from abroad then they have to accept that that person isn’t indentured to them and is free to take a better offer anywhere else at any time. That would mean that they’d have to pay market rates (or higher!) to bring someone in from abroad.

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