Wait! We Saw Them First! (No Long-Term Strategy)

By April 17, 2007General

From New Zealand comes a report that skilled employees are in high demand overseas. Kevin McIsaac, an analyst with the Australian-based Intelligence Business Research Services discussed the “skills gap” in the information and communication technology (ICT) fields at a conference in Wellington last week, telling the Kiwis to expect the Aussies to come recruiting.

McIsaac notes that in 2004, 12% of the New Zealand population was aged over 65; in 2051, that will grow to 25%. But in Australia, the situation is projected to be much worse.

“Therefore, greater automation, better information and more effective collaboration in IT is required.” Currently in Australia, demand for IT workers is up 61% on last year, he says.

Sounds familiar, doesn’t it? Aging workforce, skills not matching demand created by technological progress. Turns out that the “skills gap” we talk about at the NAM is a becoming common all over the world as the modern high-tech economy puts a premium on knowledge and skills. Including in developing and former Eastern Bloc countries.

The salaries of IT workers from Central Europe to India are rising by double-digits every year. In the past five years, Hewlett-Packard (HPQ), SAP (SAP), and even Morgan Stanley (MS) have set up shop in former Communist countries of Eastern Europe. There, a deep pool of highly qualified math and science graduates were supposed to be willing to work for a third of that paid their Western counterparts.

Yet today, IT directors in Poland can cost companies more than $100,000 a year. That approaches Silicon Valley levels. And the number of highly qualified workers is surprisingly low. Multinationals have reacted swiftly, moving operations to ever lower-cost centers….

This is all rather unexpected. Five years ago companies never thought they would have to worry about human resources. China and India were supposed to have seemingly inexhaustible pools of cheap labor. Yet today, the #1 challenge for multinationals setting up operations abroad is finding and keeping good workers.

We’ve always regarded increased H-1B visas as only part of the solution to the shortage of highly skilled employees in fields such as science, engineering and programming. The above just reinforces that point. With the “skills gap” being a worldwide phenomenon, recruiting other countries’ trained employees alone will never keep up with demand.

Clearly, each country has to respond by expanding domestic opportunities for high-quality education and training. It’s a challenge everywhere, but especially for the world leader in high-tech manufacturing, the United States.