U.S. Firms Search for Technical Talent

Wall Street Journal Jul 26, 2006 Page B2D

U.S. Firms Search for Technical Talent

Author(s): Christopher Scinta

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U.S. companies are desperate to find technical talent, prompting many
to step up retention efforts, while making a dash to move higher-paid
research operations to China and India. It raises new debate about caps
on visas for foreign workers and the need to attract more U.S. students
to careers in math and science.

"I think there are too few people choosing technical careers," said Urs
Hoelzle, senior vice president at Google Inc. The company has added
operations in places such as Seattle and New York to be closer to
talent pools.

The Bureau of Labor Statistics said the U.S. needs 135,000 new computer
professionals a year, but the U.S.'s universities are producing only
49,000 computer-science graduates annually. The agency also predicts
the need for science and engineering graduates will grow 26% to 1.25
million by 2012. The number of graduates in those fields, however, has
remained relatively flat for two decades.

In 2004, Chinese schools awarded 351,000 bachelor degrees in
engineering, computer science and information technology, while the
U.S. awarded only 137,000 similar degrees, according to a Duke
University study. India was close behind with 112,000.

Tory Johnson, head of New York-based job fair and recruiting firm Women
for Hire, said being a professional -- particularly a woman -- with
highly technical skills means "employers are knocking down your door."
And that equates to more than just a substantial salary. These
candidates can shop around for the right fit as far as corporate
culture, location and flexible work schedules, she said.

The search for technical talent in the U.S. has become "fiercely
competitive," said Yahoo Inc. spokeswoman Heidi Burgett. The company
"re-recruits" existing employees to keep them happy, offering job
rotations and access to the most important, high-profile projects.

The intense competition for such a limited group of workers has fueled
an expansion to offshore locations well beyond the now- ubiquitous
customer call center in Bangalore. Many U.S. companies are moving more
advanced -- and higher-paid -- research and development work to China,
India and Eastern Europe, not only to be involved in their fast-growing
economies, but to tap a pool of engineers, software developers and
other technical professionals.

Texas Instruments Inc., Intel Corp. and International Business Machines
Corp. are just a few of the companies that have recently said they
would open, or add to, technical operations in India.

EMC Corp. last month said it would make large investments in both India
and China. "We will invest $500 million in India through 2010, and in
China $500 million between 2006 and 2010," said Greg Eden, an EMC
spokesman. Those investments are meant to be all-encompassing efforts
to build sales and infrastructure, as well as product development.

EMC currently has about 28,000 employees world-wide, including 700
software developers in Bangalore. The data-storage company expects to
increase that figure to 1,600 by 2008.

John McArthur, a senior analyst at research firm IDC Corp., said EMC
has been adding workers in India and China to gain access to highly
skilled but relatively cheap labor, particularly in software
development, as well as to gain a foothold in those countries as they
become bigger information-technology consumers.

Another answer to the dearth of talent in America: simply bring foreign
workers with the skills to the U.S.

Newmont Mining Corp. has found it difficult to recruit engineers and
geologists in the U.S., said David Kern, human resources manager at the
gold producer. It is tough to find experienced engineers, he said,
adding that Newmont recently staffed three upper-level engineering jobs
with candidates from Canada, Mexico and Australia.

The mining industry has been particularly hard hit by the lack of
technical talent and expects tough times ahead -- about half the 5,200
practicing mining engineers in the U.S. will retire in the next 12
years, said Leigh Freeman, general manager of Downing Teal, a firm
specialized in finding talent for natural resource industries.

During a downturn in the 1990s, many people left the mining industry,
and now that natural resources are a hot market again, Newmont is using
headhunters to try to track down some of those veterans, as well as
make sure it keeps the people it has. Mr. Kern said Newmont tries to
provide clear career paths for its technical professionals, so they can
see opportunities to advance within the company and won't be tempted to
leave.

Gary Flaharty, spokesman for oil-services company Baker Hughes Inc.,
said universities in the U.S. and Western Europe simply aren't
attracting and graduating enough students with the skills needed by the
energy industry.

"The industry is more and more turning to the Eastern Hemisphere to
meet the requirements" for qualified petroleum engineers and
geophysicists, Mr. Flaharty said.

Citing statistics compiled by the Society of Petroleum Engineers, Mr.
Flaharty noted that 1,732 undergraduate students were enrolled in
petroleum-engineering programs at U.S. universities in 2004, versus
11,014 in 1983.

But getting foreign-born professionals into the U.S. to fill those jobs
isn't always easy either. Short-term visas for foreign workers coming
to the U.S. to fill specialty occupations such as mathematics, physical
sciences and engineering -- known as H-1B visas -- are limited to
65,000 a year by the federal government, though that was temporarily
raised to 195,000 from 2001 to 2003. Another 20,000 visas are available
to foreign-born workers who received a master's or doctorate degree
from a U.S. university.

Arthur Rothkopf, senior vice president at the U.S. Chamber of Commerce,
said the H-1B quota for fiscal 2007 already has been met. The chamber
is lobbying, with various companies, to have that cap increased to
200,000 or 300,000 a year. Mr. Rothkopf said there is a "critical,
urgent need" for more foreign-born professionals in the U.S.

For the long term, Mr. Rothkopf said the U.S. needs to build up its
science and math-education system. A report published in late 2005 by
the National Academies of Science said addressing the lack of math and
science graduates in the U.S. would be key to maintaining the country's
economic stability.

"We have to remain competitive," said Mark Heesen, president of the
National Venture Capital Association, which represents the majority of
venture-capital firms in the U.S. "Otherwise, Asia will take over what
we're doing."

Science and engineering tend to be difficult disciplines to master, and
many students are enticed by positions in law and finance that seem
more lucrative, he said.

As competition for the shrinking pool of American engineering graduates
becomes more intense, defense contractors like Northrop Grumman Corp.
have established "pipeline" programs with U.S. universities, high
schools and even junior high and grade schools to encourage more
American students to study engineering. Northrop has put more resources
in apprenticeship and internship programs, said John Krakowski,
Northrop's corporate director of employment and employee relations. The
company is also encouraging veteran engineers to delay retirement to
mentor young employees.

Newmont has made a $2.5 million commitment to the University of Nevada
at Reno to fund teaching and recruitment for mining professions, and
copper giant Phelps Dodge Corp. has made a $2.5 million endowment to
the University of Arizona for training mining engineers and offers
scholarships at several other schools.

Thus far, it appears the efforts haven't been very effective. During
the fall of 2003, there were 91,000 engineering students in programs
for master's degrees, by the fall of 2005 that number had dropped to
83,000, said Michael Gibbons, director of data research for the
American Society for Engineering Education.
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Bob Sechler, Frank Byrt, Megha Rajagopalan, Mark Boslet, Jonathan
Vuocolo and Jason Ma contributed to this report.