Labour Shortage, or Underfostered Talent?

April 1, 2007 by
Filed under: Leadership, People 

In what seems to be a vicious cycle, the local tech community is currently expressing a dramatic need for more talent. There is a huge number of job postings that remain unfilled, and upswing in placement activity for the local recruiting community. At a personal level, far more people are asking me if I know someone that can fill a role, rather than asking if I know anyone that might need their services.

This situation seems to alternate with the times where organizations feel they are cash-strapped. Combining the two, the number one concern that I have seen from the tech community for as long as I can recall is this overall resource constraint.

Let’s look at this issue a little more closely, though. In particular, how this resource constraint manifests itself as a labour shortage.

An expressed shortage is really an imbalance between supply and demand. There is more stuff that companies would like to do than there are resources to get the work done. To remedy the imbalance, we can increase the supply or decrease the demand, but to decrease the demand doesn’t seem like a reasonable approach, so we need to focus on supply.

I would expect we’re all in violent agreement so far.

With supply being the limiting factor, we need to recognize that this can be broken down to be a function of quantity and quality: the number of resources available (or in other times, the amount of capital available), combined with the efficiency of output for these resources.

The emphasis for remedying the situation is perpetually on increasing the quantity, so let’s explore this (admittedly, some of the elements discussed here are based on the local economic situation, but I believe most of the arguments are generally applicable).

It has been suggested that there is a need to increase the labour force in BC in this sector significantly in the coming years to meet a growing demand. I see a few potential sources for this: the post-secondary system to produce new graduates, or importing new talent from outside the geographic region (retaining existing talent reduces the need to import additional talent).

Currently, the post-secondary institutions are challenged to even fill available seats in their technology programs. At the post-graduate level, many of the seats are filled with non-resident students, many of which take take their talents elsewhere soon after graduation. Even if the institutions were to magically fill their programs, there would be a multi-year delay before new graduates hit the workforce. This does nothing to improve the current picture.

Layer on top of that the challenges of finding the top talent from the graduating classes and the limitations of the educational system in producing seasoned talent, and this doesn’t appear to be a reasonable short-term remedy at all.

So let’s look at the potential for attracting talent from outside the region to come to BC to work in the tech community. Historically, the story has been “come to BC, it is beautiful here”, with the hopes that the natural resources will distract you from the realities of the High Technology workplace.

I’ve already ranted in the past about the draconian labour standards we have in this province. In BC, high technology is the only sector where the labour codes have explicit exceptions that erode the rights of the employee. From what I have seen, this is the only province in the country where these exceptions are in place, and indeed the only exceptions nationwide in any sector that serve to erode the rights of the individual.

I know at least 2 ‘anchor’ companies in town where it is an unwritten practice (unwritten for good reason) to pay less than the industry standard. Consultants recognize they need to head South or East to make real money, and the industry acknowledges that the region generally pays less than neighboring geographic areas.

Companies here are frustrated that they can’t get good, cheap resources, that will work under labour conditions that are among the worst in the nation. Add to this the soaring housing prices over the past few years, and the attractions to move to the region from elsewhere are diminishing.

So we can’t depend on an influx of talent from the schools, and we’ve actively set up an infrastructure that is not attractive for importing talent. We have done nothing to improve the outlook of the situation yet – maybe we should consider the quality drivers, rather than the quantity drivers of supply.

In over 15 years of working for and with a wide range of companies in the province and worldwide, it has become quite clear to me that there are always opportunities for improving internal practices, in every team. The current cries for more supply hover around the 15% mark from the industry, while I would suggest that the strong software teams are only running at perhaps 70% efficiency, and most organizations are far less efficient than that.

However the inefficiencies are manifested, the bottom line is that software teams are not making good use of the resources they have (both in terms and people or money). For most, an internal efficiency improvement that is more than the current perceived labour shortage of 15% is quite easy to obtain. Done internally, this also eliminates the cost of recruitment, the risk of bringing additional resources on to the team, and the additional overhead of managing a larger pool.

Internal improvements also bring about secondary value such as increased quality or reduced risk and uncertainty, which is not the case when we address the supply problem by increasing the size of the team.

In a session this week where this topic was discussed, someone raised the famous JFK quote “Ask not what your country can do for you, ask what you can do for your country.” Very appropriate, but for reasons quite different than those expressed in the session.

We continue to see the supply problem as a labour (or money) shortage, which is expressing the problem in terms that force us to rely on external resources to solve our problems. The same problem can just as readily be seen as a failure to adequately foster our existing talent. In doing so, we are one step closer to understanding that we have an opportunity to resolve our own problems, despite the environmental conditions that are working against us. For companies that think strategically, this is a massive opportunity to tap into, with no dependency on industry pundits, the government, or the education system.

The supply vs. demand problem we are experiencing is an indicator of a robust economy in the sector, which is great. Overall, the industry has dramatic goals to resolve the problem, but these goals appear to be based on underlying perspectives that make these goals less attainable. We are asking how to make our half-empty glass more full, rather than asking how we can foster our existing talent to make our half-full glass more productive.

Especially in the current geopolitical environment, the latter approach is far easier to achieve. There is no labour shortage here. There is a talent underutilization that is within our grasp to do something about. – JB

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