In high-tech, another kind of job crunch

Vital Mass. sector faces worker shortage

By Katie Johnston
Globe Staff / July 28, 2011

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Timothy Jones wants to double the size of his 12-person staff by the end of the year. The trouble is, the software developers he’s seeking know they can make more money elsewhere.

“The reality is that somebody graduating school in Massachusetts can basically double their salary by getting on a plane and going to San Francisco,’’ said Jones, chief executive of the Boston social media analytics firm Buzzient.

Massachusetts has developed a technology labor shortage, one that could undermine a vital sector that helped pull the state from the last recession and is driving its recovery. Demand for high-tech talent is so great that workers are turning down six-figure salaries and companies are offering five-figure cash bounties for successful referrals - a stark contrast to lackluster hiring that has created a large pool of long-term unemployed and kept the state jobless rate at historically high levels.

Even though the industry is thriving in Massachusetts, the shortage of new talent means that companies are less likely to spring up or stick around if there aren’t enough people to do the work.

Keeping the technology industry in Massachusetts is especially important because of its high salaries and extensive exports, which help generate activity across a variety of other sectors, from retail to construction to finance. The technology industry now employs nearly one of every 10 workers in the state.

“Businesses will follow the talent,’’ said Jane Oates, assistant secretary of employment and training administration who served as a policy adviser for the late senator Edward M. Kennedy.

The state is tackling the challenge on several fronts, promoting job training and facilitating a discussion about the labor shortage today with local tech industry leaders and the White House Business Council at the Venture Development Center at the University of Massachusetts Boston.

The council, created by President Obama in 2009, has met with executives in 175 communities around the country this year, hearing concerns about the film industry in Los Angeles and manufacturing in Portland, Ore., for example, in an attempt to stimulate job growth. In Boston, the discussion will be led by Oates.

Technology has rebounded strongly since the last downturn, helping keep the state unemployment rate, 7.6 percent, well below the national rate of 9.2 percent. More workers - nearly 265,000 - are now employed in the sector than before the pre-recession employment peak in 2008, according to Moody’s Analytics, a forecasting firm in West Chester, Pa.

With mobile and other technologies expanding rapidly, tech talent has been hard to find around the country, with California, New Jersey, Texas, and New York topping the list of states with the greatest labor shortages, according to technology career website Massachusetts has the fifth worst shortage.

“You’re looking for workers with very specific skills, and those workers, they don’t grow on trees,’’ said Gus Faucher, director of macroeconomics at Moody’s.

Local recruiters say they are seeing three to five job openings for every candidate in the software development field. Workers with the right skills are being snatched up in as little as 24 hours, said Sean Dowling, technology contracting recruiting manager at Winter, Wyman Cos., a Waltham staffing firm.

“I’ve had people turn down $130-an-hour offers,’’ he said.

An obvious source of talent is higher education, but nearly half the estimated 250,000 students who attend the state’s private colleges and universities each year leave Massachusetts after they graduate.

Jones, of Buzzient, is trying to counteract this brain drain by working with the UMass Venture Center - an incubator for high tech, life science, and social venture start-ups - to get students invested in his company long before they get offers from Silicon Valley.

But government needs to do more, he said, such as offering tax credits to small companies that hire locally, expanding technical training programs, and awarding visas to foreign students to allow them to work here after they graduate.

“When they get their diploma, there should be a green card stapled to it,’’ he said.

The Patrick administration has taken steps to respond to the shortage, looking to hire a director to connect the education, workforce development, and economic development departments and create training programs to meet employer needs, said Joanne Goldstein, secretary of Labor and Workforce Development.

The state is also awarding grants to companies that provide on-the-job technical training, and funding programs such as the Adult Biomanufacturing Certificate Program at the Minuteman Career & Technical High School in Lexington, which trains participants for entry-level technician jobs.

“There’s a lot of people who hear the words IT and say, ‘I don’t know how to write programs,’ or ‘I’m not a Web designer, so that leaves me out.’ That’s just not true,’’ Goldstein said, stressing that a laid-off auto mechanic’s knowledge of computerized car components can transfer to the technology sector.

Midlevel technology skills are in high demand at GeoMed Analytical LLC, a life sciences start-up based at the Venture Development Center. The company is looking to hire technicians with laboratory and project management skills, not necessarily college degrees.

A college degree is no guarantee of success in the industry, said Robyn Hannigan, chief science officer at GeoMed. Technology is growing and changing so rapidly that by the time many students graduate, their knowledge is obsolete. Businesses need to work with schools to develop curricula that keep up with needed skills, she said.

William Brah, executive director of the Venture Development Center at UMass Boston agreed. “I think we’re training students for the economy that existed a decade ago,’’ he said, “not the one that is emerging now.’’

Katie Johnston can be reached at