San Jose Mercury News
Monday, May 17, 1999

`Workforce gap' a risk, report warns

BY MARK SCHWANHAUSSER
Mercury News Staff Writer

The difficulty of recruiting enough local skilled workers for
available jobs is costing Silicon Valley employers $3 billion to $4
billion a year and crimping the high-tech industry's growth, a
regional consortium said Monday.

A study commissioned by Joint Venture: Silicon Valley Network says
local companies have 160,000 jobs -- about one of every three
high-tech postings -- that can be filled only by wooing candidates
from outside the valley or by people who must commute long distances.
As a result, many jobs go unfilled, creating a growing ``workforce
gap'' that threatens the valley's international dominance.

``If Silicon Valley is to retain its position as the capital of high
technology in the world, then it must also become the top producer of
high-tech workers,'' said Ruben Barrales, Joint Venture's chief
executive.

The price tag for employers is $6,000 to $8,000 per employee,
according to the study prepared by the A.T. Kearney consulting group
for Joint Venture. That figure is based on hiring costs, lost
productivity while jobs remain open, turnover of 20 percent to 25
percent a year as competitors poach workers from one another, and pay
premiums of 3 percent to 5 percent to lure workers.

Joint Venture is one of at least three groups to analyze the shortage
of trained high-tech workers within this month. Both the American
Electronics Association and the Career College Association issued
their own studies highlighting the need for more skilled workers.

Two weeks ago, Joint Venture itself released a survey included in this
study that suggests the next generation of students is unprepared to
fill the jobs gap. Local eighth- and 11th-grade students not only are
uninformed about high-tech career opportunities and the skills needed,
but they also show a lackluster interest in math and science, the
building blocks for tech skills. The problem was most acute among
girls and Latinos, the survey said.

The Joint Venture study showing a ``workforce gap'' has the potential
to kindle the debate and lobbying over increasing the allotment of
H-1B visas, which are earmarked for foreign workers in technical
professions. Congress temporarily boosted the number of visas from
65,000 to 115,000 in 1999. High-tech employers contend they need such
workers to fill openings, while opponents say employers are looking
for lower-paid workers.

On Friday, it was reported that the Immigration and Naturalization
Service will exhaust its annual allotment of 115,000 H-1B visas
available to foreign workers in June -- four months shy of the
government's fiscal year ending Oct. 1.

But Barrales says the workforce gap is much bigger than the H-1B
issue, because foreign workers can fill only some of the positions.
The long-term solution is to ``focus primarily on growing our
workforce,'' he said.

To address this problem, Joint Venture recommends that large firms
take the lead on pushing for ``sustainable'' education initiatives. On
one level, they can boost the number of candidates for certain skilled
positions by developing or expanding internships,
tuition-reimbursement plans and providing workers who could teach in
local schools. On a broader level, valley employers must take steps to
raise interest in math and science and make high-tech careers more
enticing to students, the consortium says.
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The workforce gap study is available at www.jointventure.org