Construction and manufacturing have severe labor shortages? I'd love to see a source for that claim. In my neck of the woods, they still haven't recovered from the recession.
I work in the engineering department of a software company and I'm closely involved with recruitment and interviews. I'll tell you this: the vast majority of people (over 95%) we turn down are unqualified, period. Meaning, we wouldn't hire them even at half the salary level advertised for the position. It has nothing whatsoever to do with what we're willing to pay - our salaries are actually very generous and we aren't afraid to pay someone what they are actually worth. The problem is we can't actually find people like that. So yes, from our perspective (250+ person tech company in SoCal), the talent shortage is very, very real.
You get the liberty of guiding their education in a way that most benefits your company and they get to extend their skillsets. Sounds like a win-win.
I didn't say they have to be the complete package upfront. We actually do have comprehensive training programs for new hires, most of which were designed by me. The problem is that people need a certain mix of base level skills and character traits to succeed and excel. Most people we interview don't have those, which means they are unqualified.
Software developers aren't (typically) stupid. They have a reasonable idea of the value they provide the company. My estimation is that almost every company under-compensates their engineering staff. I doubt yours is an exception.
Because we do very rigorous analysis of why successful employees are actually successful. We know what it takes to perform well at each job function.
>>And what makes you think your salaries are "very generous?" Lot's of companies think their salary/benefits packages are "very generous" when they're anything but. Without context your post is a giant meaningless assertion.
Lots of websites aggregate salaries by position and geographic region, so we know the numbers. We also have very good benefits. For instance, our 401k program is a dollar-for-dollar match up to 15% of salary, which is extremely rare.
Software developers (supposedly) aren't stupid. Applicants for software development positions on the other hand...
Partly both, but also missing a qualified applicant often costs far less than making a bad hire.
The ratio of decent hires to bad hires needs to be as high as possible. In comparison, the percentage of qualified applicants thrown out almost doesn't matter (unless it gets to something truly absurd like 90%). (Really it does matter, just not compared to making bad hires. Interviews and delays are still expensive, just less so than failing to get new employees up to speed.)
Interviewers that make bad hires are terrible. Interviewers that turn away good hires are merely bad.
http://www.nytimes.com/2012/11/25/magazine/skills-dont-pay-t...
Tell me, Ege, what salaries are advertised at the following URL? http://jobs.laserfiche.com/Jobs?dep=engineering
I can't find any.
With that said, what is a shortage? Is there a shortage of Ferraris because I cannot afford one, or am I just too poor to consider owning one? Is there a shortage of developers until every developer is working for minimum wage so that the poorest of poor companies can afford them too?
If demand gradually increases, both quantity and price will rise steadily.
If there is a shortage, price first rises sharply with little or no increase in quantity and then falls with a significant increase in quantity.
But...approaching the edge case, do you think you would see more qualified candidates in your applicant pool if you advertised & offered a $1m/year package for the positions? Have you tried advertising the positions at double (or triple) the compensation to see if that changes matters? If you didn't test this, how do you know that the applicant pool has nothing to do with what you're willing to pay?
I'm here in Atlanta, and I can cite examples of people leaving for SF because their expected compensation goes up by a triple-digit percentage (sigh, candidates ignore costs but that's a different story). This effect changes the applicant pool in SF, perhaps boosting comp by 100%+ would work for your company locally? Certainly poaching talented employees gets easier when you offer a raise of $100k to join your firm.
Put another way: why would employment be different from other supply/demand markets where price matters, even if the price being asked is potentially distasteful to the buyer (see TSLA, AMZN, TWTR, FB, NYC apartments, or the flavor of your choice)?
(1) You're company maybe an undesirable place to work. In Fresno, CA there are couple self described big-name software firms that fancy themselves "local google". Only willing to hire the best and brightest as it were. But sadly for them, the best and brightest aren't cutting it for them. They verbatim claim the same thing you are now, good salaries, but no one coming in for an interview is worth it. The real truth is that the word has gotten out: their products stink, they treat their employees like children, and their competitive salaries are not that competitive in the larger market. The so called "best and brightest" just avoid their front door.
(1b) Just highlighting something in part 1. You are getting what you are paying for and that means you are not paying well.
(1c) Your other employees suck. I don't want to work at a place where people are rude or incapable or working in teams, or simply bad at their jobs. It makes my experience worse. Whenever an interview goes well, I always ask to meet the rest of the staff, if only just for a second. To see what they are like.
(2) Your interview process is flawed. Assuming (1) is provably untrue, then it might be time to take a good look at the interview process you are employing. I've been through so many interviews where it was clear that the (wo)man doing the interview was simply looking for someone to solve exactly one problem, or the name a specific function, or the input format for a function in a given language, or for me to suggest a specific solution(and no other), etc.
Worse still, the moment you cannot answer the question or suggest that a simple Google search would help produce a more ideal solution, or lord forbid simply suggest that an alternative solution might be better, there is this shift in perceived power. It almost seems like the interview process can be an adversarial means of verifying that the interviewer is indeed smarter than the interviewee. At this point during such "skills test" interviews, I politely tell the interviewer that I'm not the candidate they are looking for and conclude the interview.
(3) You haven't gotten the word out. How many people really know that your company is looking for someone (1, 10, 100)? Are you really getting the message out to the greater engineering community. Perhaps you are only reaching a single subset, and that subset is not skilled in what you are looking for.
The funny part is the only people who will agree with you are other hiring managers. Everyone else will say you aren't paying enough or some other excuse. They are never sifting through the resumes or sitting through the interviews.
If we ever stumble across a qualified candidate, we make it happen. We just can't find very many qualified candidates.
Also, the unemployment system is basically designed for them. If you work for someone and get laid off between projects, you still get paid. The other path is going out on your own.
It's gotten a good amount better, but the jobs still aren't steady enough for everyone to be employed full-time. Aside from data centers, there's not a ton of construction going on.
I would like to see asked, of these people who can't find employees, is how much they've had to increase their salary offers to fill positions.
Because my anecdotal experience is that the people who can't fill positions are essentially looking for the higher-quality, more-modest-salary 'deals' that were more common in 2008/2009. And they're simply not in any hurry to hire anyone at all, so the disappearance of such deals results in continually-open-positions, rather than increased offers or decreased requirements.
Salaries cannot be increased ad-infinitum. Even an extraordinary candidate's potential contribution can add so much value, since it is constrained by the way it fits in the business (and ultimately by the market for the product/service your team is helping to provide).
Requirements cannot be decreased arbitrarily either. The relationship between skill and value added is non linear, and may fall rapidly into the negatives below some threshold (it takes more time for a mentor to teach a rookie how to do things than to do things himself, borderline incompetent employees make costly mistakes, etc).
So, we are basically in a situation where a market cannot sustain itself (Paul Graham wrote about this in one of his essays, the example he used is how this same forces drove out the existance of butlers). So, in this sense, I believe shortages of labor are very real.
As we're not remotely approaching either end of that envelope, I'm not too convinced that any hard limits are coming into play.
I mean, we're not talking about whether anyone can hire couriers to write web services for six figures. We're talking about whether employers are willing to hire people with 5 years of experience with Technology X at X% more than their last comparable hire, as opposed to waiting around for the posting-perfect-match outlier with the requested 10 years experience, but who'll accept essentially the same wage as that last 5-years-experience hire.
[1] Much of that might have been arguably unsustainable, but not all. And again, we're talking about degrees and trends: are offers going up at all? Are employers budging on requirements at all?