San Francisco Chronicle
Tuesday, May 18, 1999
High-Tech Workforce Gap in The Valley
Benny Evangelista, Chronicle Staff Writer
A shortage of local high-tech employees costs Silicon Valley firms as
much as $4 billion per year in recruiting and lost productivity costs,
according to a study to be released today.
And the problem may get worse in the future because about two-thirds
of local middle and high school students seem uninterested in pursuing
high-tech careers, according to the report from the nonprofit Joint
Venture: Silicon Valley Network.
About 160,000 jobs -- one-third of the Silicon Valley high-tech
workforce -- are taken by workers recruited from outside the region or
who commute from long distances or simply go unfilled, the report
This ``workforce gap'' could hinder the region's economic growth, the
The gap costs Silicon Valley employers between $6,000 and $8,000 for
each vacant position, said Ben Smith, a principal with management
consulting firm A.T. Kearney, which prepared the report for free.
The loss includes the higher salaries needed to recruit workers in the
Bay Area compared to other regions and the constant turnover as
skilled workers hop from job to job, Smith said. The workforce gap
also costs tech industries by limiting their ability to grow, he said.
The workforce gap is projected to grow to 200,000 by 2010. ``For
Silicon Valley to remain the capital of high technology, we need to
produce qualified high-tech workers,'' said Ruben Barrales, Joint
Venture president and CEO. ``Our kids need to be better prepared to
take advantage of the opportunities here.''
Joint Venture is a regional public- private group based in San Jose
and co-chaired by Hewlett-Packard Co. chief executive Lewis Platt and
San Jose Mayor Ron Gonzales. The group tracks economic and lifestyle
trends in Silicon Valley, which it defines as the South Bay plus San
Mateo and Alameda counties.
The report found that only one- third of 1,160 students in grades
eight through 11 planned to pursue high-tech related majors in
The findings echoed a similar study of college students last month.
Industry trade group the American Electronics Association found that
the number of high-tech degrees granted annually in the United States
--including engineering, math, physics and computer science -- is
Even in an area flooded with technology billboards and advertisements,
most of the students in the Joint Venture study were intimidated by
the belief that all computer jobs required extensive educations at
The study found many students didn't know there were other well-
paying positions, such as network administrators, computer repairers
and administration, that were within their reach after two years of
``These are by no means McDonald's workers,'' said Smith. ``They make
The study comes as critics like the Rev. Jesse Jackson say technology
firms are not doing enough to bridge a Digital Divide by recruiting
from local African American and Latino communities that are
underrepresented in Silicon Valley's workforce.
An unrelated study released last week by the ad hoc Coalition for Fair
Employment in the Silicon Valley found the percentage of African
American and Hispanic employees at 253 high-tech companies in the Bay
Area declined slightly from 1996 to 1997.
``The fact there aren't enough African Americans, Hispanics and Native
Americans in the pipeline is not a sufficient excuse for
discrimination,'' said coalition founder John Templeton.
And Dan Geiger, executive director of OpNet, a San Francisco nonprofit
that trains teens from low-income and minority communities for
multimedia and Internet careers, said educating a new generation is a
key to the future of the high-tech industry.
``I understand what they're (high- tech firms) saying, that they're
looking for very highly qualified Ph.D. and masters-level people, but
there are a lot of untapped resources and people here,'' Geiger said.
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