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A critical shortage of programmers has prompted a worldwide labor hunt
As a headhunter, George Van Derven has an unlikely connection: Russia's former state airline, Aeroflot. Not that Van Derven trades in pilots, flight mechanics, or surly Russian flight attendants. But in a former career, he sold a computerized reservation system to Aeroflot and came to know the talented programmers stashed in the back offices. When Aeroflot broke up into regional carriers in 1992, Van Derven promptly tapped its brain pool. Now, as president of Alternative Technology Resources Inc. in Sacramento, Van Derven is mining a rich lode of programming talent and busily dispatching it to understaffed computer departments throughout the Western world.
Other recruiters should be so lucky. High-tech headhunters for Andersen Consulting tramp through technical schools in Budapest and job fairs in Manila. At a recent training session for programmers in Holland, Microsoft Corp. hired bouncers to keep headhunters at bay. And a recruiter for IBM's Global Services Div., who is trying to hire 15,000 software hands this year alone, introduces himself as James R. Bunch, ''as in bunch of jobs.''
The Information Revolution is racing ahead of its vital raw material: brainpower. As demand explodes for computerized applications for everything from electronic commerce on the Internet to sorting out the Year 2000 glitch, companies are finding themselves strapped for programmers. In the U.S., alone, which accounts for two-thirds of the world's $300 billion market in software products and services, some 190,000 high-tech jobs stand open, most of them for programmers, according to the Information Technology Assn.
SOARING SALARIES. That's sending companies scouring the globe for talent--and lifting salaries skyward. A typical programmer's wages, now some $70,000, is jumping 13% a year, and far higher in the hottest niches, such as Java Internet software and SAP business applications. These days, $20,000 signing bonuses are commonplace and stock options are being handed out with as little fanfare as office supplies. If the pace keeps up, experts say, ballooning salaries could wind up damaging the global tech machine as margins are squeezed and investments postponed.
And relief is nowhere in sight. Experts predict the gap between computer-science students and expected demand won't ease for a decade, if then. Too many bright young people, especially in Europe and the U.S., consider programming geek work and choose other careers. In the U.S., the number of computer-science graduates has plummeted in the past decade or so, from 48,000 graduates in 1984 to an estimated 26,000 this year. ''This is a real limiting factor to growth,'' says Avron Barr, a researcher at Stanford Computer Industry Project who is investigating the shortage.
Indeed, for high-tech companies, the dearth of programmers is the greatest threat to expansion in the coming year--far more menacing, they say, than an economic slump or competition in the marketplace. And it's not just a problem for tech companies. Plenty of others are desperate for the same talent. Auto makers from Tokyo to Detroit are packing more computing power into their cars and plants. Banks, brokerages, and phone companies are rushing to outdo each other with the zippiest online services, all requiring herds of nerds. Those that choose not to install the newest technology, says Owens Corning CIO Michael Radcliff, are ''creating a competitive liability.''
Of course, if you're willing to pay--or have the stock options to entice--you could be up to your propeller hats in programmers. In Silicon Valley, star programmers are swimming in stock options, driving Porsches, and buying homes in the pricey Los Altos hills. At Netscape Communications Corp., which plans to hire more than 1,000 programmers this year, employees receive up to $5,000 just for a successful referral and the pampered programmers are treated to onsite massages, teeth-cleanings, and laundry service. The company lines up their 49ers tickets and books their white-water rafting vacations. All this to keep them from succumbing to a stream of calls from headhunters. ''Everybody's going crazy now trying to find these folks,'' says Margie Mader, Netscape's human-resources director.
How did the shortage get so bad? For years, tech companies had little reason to fret. In the early '90s, the industry snapped up hundreds of thousands of workers who were dropped into the job market when large corporations downsized--a source now running dry.
TEDIOUS WORK. At the same time, the very act of writing software has not speeded up despite the computer revolution and the terabytes of information hurtling around the globe. Today, even the best of programmers painstakingly turns out some 10 lines of code a day. To whip up today's software programs--even a cellular telephone requires some 300,000 lines of code--takes armies of programmers laboriously writing away. Consider this: There are six million software programmers and counting in the world today, two million of them in the U.S. and one million in Japan. As an industrial model, it's akin to pre-Gutenberg monasteries with their legions of scribbling monks.
For years, global savants pooh-poohed the pending programmer crunch by pointing to India, which boasted a seemingly bottomless reserve of techies. India, they said, would be to software what Saudi Arabia was to oil. And true, with 50,000 programmers pouring out of schools every year--twice the American total--India is a valuable labor pool.
But with global technology bursting to $3 trillion this decade--four times higher than in the '80s--India's supply simply isn't enough. And no other plentiful source of software skills appears to be on the horizon. Russia has promise, but it's limited: Few of its programmers speak English or understand business applications. China is a possibility, but it's likely to employ most of its programmers over the next decade for its own massive development projects. ''I had this one programmer from China,'' laments one official at Electronic Data Systems Corp. ''I took him through the whole immigration process, got his papers. Then he got a better offer.''
RAID BAIT. Naturally, in this world of predators, there's a pecking order. Sitting on top are the fast-growth companies with hot Internet technologies. They're magnets for talented programmers, and they can pad their offers with rich stock options. Service companies such as Andersen Consulting, IBM Global Services, and Ernst & Young, which are helping companies install systems worldwide, are forced to routinely dole out six-figure salaries to programmers with experience in business applications. They compete with countless body shops--outsourcing companies that pay as much as $300,000 for skilled programmers willing to live on the road.
At the bottom of the pile are the corporate tech departments throughout the world. Many are short on money and stock options. And if they install a popular system, bringing their staff up to date on something new from, say, Oracle Corp. or the German software giant SAP, their departments get raided in no time. Don Yates became familiar with SAP's leading software package for business while helping install the system in the early '90s at Royal LePage Ltd., a real estate company in Toronto. Within a year, the 18-person department was picked clean. ''I was the last one to go,'' says Yates, who now makes three times as much money, some $150,000, as an itinerant programmer for EMI, a Pittsburgh-based company that rents out software talent.
No surprise, then, that companies are trying any tactic, including turning to the World Wide Web. Since the Net is where most programmers spend idle hours, growing numbers of recruiters are using it to chase them down. That's where Michael L. McNeal casts his global net. McNeal, human-resources chief at Cisco Systems Inc., needs to hire 1,000 people each quarter, many of them programmers. Like other recruiters, he buys ads on popular Web sites like the Dilbert page, which funnels traffic to Cisco's Web site. There, the company lists some 500 current job openings. Applicants in foreign countries can hit hot buttons to translate the page into Cantonese, Mandarin, Russian. And, by filling out a short questionnaire, they can create a resume and zap it to Cisco.
Cisco's Web page draws 500,000 job searches per month. This gives Cisco gobs of data about the job market, including which companies have interested employees. Armed with the best prospects, McNeal then turns to Cisco employees for help, asking them to call recruits, who speak the same language.
Like the others, Microsoft recruits on the Web and snaps up startups for talent--some 20 companies in 1996, alone. But to get its software up and running throughout the world, Microsoft relies on service companies, which are grossly understaffed. Microsoft calculates that its service partners are short 41,000 professionals trained to install Microsoft products. This is forcing the company to educate new recruits. With an effort known as Skills 2000, Microsoft is pushing into 350 schools and colleges around the world. It hammers out curricula that will produce more programmers, such as adding computer training in business schools.
A big part of the effort is in Europe, a major market that has 18 million unemployed workers. Microsoft's solution is to invite jobless Europeans in 11 countries into free training programs. In the past year, 3,000 Europeans have gone through the program, with 98% of them landing jobs.
It's in this $170 billion market for global software services, including the Big Six consulting firms, IBM Global Servics, Manpower, and many others, that demand for programmers is especially hot. This is because corporations need loads of help to link far-flung operations with the latest in E-mail networks, inventory control, and finance packages. ''The productive sector of the economy is becoming absolutely dependent on software systems,'' says reengineering author Michael Hammer. ''If SAP vanished, you couldn't buy a can of Coke.''
SPECIALTIES. In the finance capitals of London, Tokyo and Hong Kong, banks are installing vast new systems to adapt to Europe's single currency and Japan's financial deregulation. Meanwhile, they're working overtime to sort out the Year 2000 glitch, the dating problem companies face when the year of double zeroes rolls around. Mastech Corp., a Pittsburgh-based outsourcer, sent a handful of programmers a year ago to follow a Citibank contract from Singapore to London (page 116). Once in London, they found a wealth of other business and started importing more programmers from South Africa, Sri Lanka, India, and Australia. ''We have 50 people now, and we'd hire another 50 today if we could find them,'' says country manager Guil Hastings.
As recruiters travel, they focus on regional specialties. The Russians are whizzes at math. India's university at Puna has a strong Japanese language program, which positions it well for Japan's Year 2000 work-load. South African programmers learned to cope during the years of the anti-apartheid boycott with a motley collection of jerry-rigged mainframes. This makes them especially adept at Year 2000 work, which is targeted toward aging mainframe software.
As for programmers, the world is their oyster. In a computer lab in Austin, Tex., Natalia Bogataya and her husband, Konstantin Bobovich, both Belorussians and products of Van Derven's so-called Russian connection, labor away on a mainframe program. They've left their college-age children with relatives in Minsk and are debugging insurance software for Computer Sciences Corp. ''We can't use our experience in our country,'' Bobovich explains, ''and my wife said, 'Let's see America.'''
Why not? In today's fervid market, programmers can write their own tickets.
By Stephen Baker, with Gary McWilliams in Austin, Tex., and Manjeet Kripalani in Bombay
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