Early this year, EMSI took a close look at software developers — what Inc.com called one of the five hardest-to-fill jobs in the US — and determined that their wages, adjusted for inflation, have declined slightly since 2004. With wages stagnant, we surmised, there might not be the pressing demand for programmers and web developers that so many have suggested.
But then again, maybe the demand is there and employers aren’t willing or able to pay what they need to find skilled developers. And the same could be true for other information technology (IT) workers. Consider this excerpt from a recent Fox Business article on Manpower’s Talent Shortage Survey:
Employers worry that the overall shortage of qualified IT professionals will affect their operations. And more than half of the U.S. employers surveyed say their pay scales are not in line with what IT workers want, which makes it hard to attract and retain staff.
In this post, we look at another way to measure the supply and demand of IT workers — a group of 11 occupations that includes computer systems analysts, software developers, and database administrators — by state and the largest metros.
The results of our analysis emphasize the importance of looking at regional data when assessing supply/demand issues. Tech-heavy states (e.g., Texas, California, Virginia, Washington) do indeed have potential IT worker shortages. But other states (e.g., Illinois, Pennsylvania, Michigan) have significant potential oversupplies.
Our Approach
Like similar posts we’ve done on registered nurses and lawyers, this analysis uses two key data sources: 1) EMSI’s comprehensive occupation data based on state and federal sources, and 2) just-released completers data for 2011 from the Integrated Postsecondary Education System (IPEDS), via the National Center for Education Statistics. This completion data from IPEDS represents the supply side of our analysis. For the demand side, we used estimated annual openings for IT jobs — a combination of new job growth and replacement jobs that result from retirement and other turnover.
Comparing annual openings and completers side-by-side allow us to see if the supply and demand for IT workers is out of sync in a particular region. However, please note a few important caveats with this analysis:
We’re able to map educational programs to occupations through a proprietary program-to-occupation crosswalk, but not all graduates will work in their chosen field of study — and not all programs are easily tied to specific jobs. It’s likely the majority of IT graduates will go into IT-related fields given the skills they have, the demand for most of these jobs, and the lucrative salaries to be had.
We don’t account for the movement of graduates from one state or area to another. Not all students, for example, from the University of Texas at Austin will stay in Austin to work after they get their degree. And not all of them will stay in Texas, either.
Double-counting and misreporting with IPEDS data is possible in some areas. For this analysis, EMSI gathered completion data for each of the 41 IT-related programs related to the 11 IT occupations rather than start with occupation. We did this because similar occupations (e.g., software developers and computer programmers) often map to the same programs, which would lead to the completers in those programs being counted twice more than once in our analysis.
The 11 occupations that we define as IT-related align with the computer occupations inside the 2-digit SOC computer & mathematics occupations group, with one exception: computer and information systems managers (SOC 11-3021). The full list, with 2012 estimated total U.S. jobs, is included in the following chart.
State-Level Results
California completed the largest number of IT-related graduates in 2011, but also has by far the highest estimated annual openings in IT fields for 2012. The Golden State’s demand is largely driven by the well-established tech sector in and around Silicon Valley. California and Virginia lead the nation in their respective potential undersupply of IT workers, with nearly 6,500 more openings expected than completers in each state. Keep in mind, graduates from other states are
Like California, Texas produces a huge amount of IT-related graduates (more than 10,000 in 2011). But it too has far more estimated job openings (13,158) for the 11 IT fields we chose than students graduating.
Washington, the District of Columbia, and Florida have at least 1,000 more estimated openings than graduates.
On the flip side, five states (not including Arizona*) produced more than 1,000 completers in 2011 than their estimated 2012 job openings. Illinois and Pennsylvania have the biggest apparent surpluses (at nearly 3,000 each), followed by four Midwest/Rust Belt states — Michigan, Indiana, Wisconsin, and Iowa.
If we just looked at the US totals, however, we get a far different picture. As the table below shows, there are almost the same number of completers (146,930) and estimated annual openings (146,247) across the nation. It’s worth mentioning that the number of IT-related graduates in 2011 was 20% higher than in 2008, when 122,000-plus completed these programs.
State2011 Completers in IT-Related Programs2012 Estimated IT Annual OpeningsShortage (-)/Surplus (+)California11,21317,688-6,475Virginia5,51011,982-6,472Texas10,14413,158-3,014Washington3,8606,489-2,629District of Columbia5672,193-1,626Florida6,5867,644-1,058Massachusetts3,7884,609-821Connecticut7591,492-733New Jersey3,0033,623-620South Carolina1,2271,690-463Colorado2,4892,812-323New Hampshire444732-288Oregon1,5601,841-281Tennessee1,7131,991-278Montana194373-179Nevada570713-143Maine132270-138Vermont266347-81New Mexico630699-69Idaho524592-68Kansas1,0121,078-66North Dakota401460-59Wyoming77129-52Hawaii365372-7Rhode Island662663-1Delaware443417+26Nebraska1,0771,051+26Mississippi650611+39Alaska328248+80South Dakota443304+139Utah2,1741,992+182Maryland5,2995,096+203Kentucky1,7541,523+231West Virginia793506+287North Carolina4,7674,453+314Ohio5,3505,002+348Minnesota3,2422,806+436Louisiana1,5441,057+487Arkansas1,390885+505Alabama2,5502,018+532Georgia4,9614,241+720Oklahoma1,783913+870New York7,8506,921+929Missouri3,4252,474+951Iowa2,4201,465+955Wisconsin3,6032,395+1,208Indiana3,6192,203+1,416Michigan5,0812,284+2,797Pennsylvania7,4704,514+2,956Illinois7,4744,506+2,968Arizona9,7442,722+7,022*Total146,930146,247Source: EMSI 2012.3 Beta Covered Employment; IPEDS
*Arizona’s massive oversupply is largely the result of completions from the University of Phoenix.
Case Study: Austin, Texas
General Motors announced in early September that it was bringing a 500-person IT innovation center to Austin, Texas. One of the major reasons the automaker cited: the abundance of workers in Austin with the skills it needs — and necessary number of graduates coming from Austin-area education providers.
GM used data from the Bureau of Labor Statistics to show the Austin metro area has 46,000 jobs in information technology-related occupations. That total lines up closely with EMSI data on salaried workers in IT fields.
How does the occupational demand for IT workers in Austin match up the regional supply of IT graduates? In short, GM is entering an already cutthroat market for employers.
EMSI estimates there are more than twice as many estimated IT openings in Austin in 2012 (1,738) as completers of local IT-related programs in 2011 (776). Again, not every graduate from Austin will stay in the area — and others will come from outside the region to fill jobs — but Austin appears to be a good place for IT professionals to settle down.
A Look at the Largest Metros
What about other metros? This type of analysis get tricky for more detailed geographies, precisely for the reason we mentioned above about Austin: Metro areas, like counties and larger regions, are not self-contained economies. Even looking at the supply of IT graduates nationally doesn’t give us the full picture; it’s also important to consider international and foreign-born grads (and those not currently in the labor market).
Yet it’s still intriguing to compare annual openings and completers for some of the largest metros in the US. Here’s what we found when looking at metros with more than 500 annual openings for IT workers:
The Washington, D.C. metro has by far the largest undersupply of IT workers (though it imports much of its talent from other areas), and three metros you’d probably expect to see are next — Seattle, San Francisco, and San Jose. Are all heavily concentrated in tech industries and hubs for computer-related innovation.
The biggest surpluses, not including Phoenix, are mostly metros with more traditional, manufacturing-based economies: Chicago, Pittsburgh, Philadelphia, Milwaukee, and Detroit.
MSA Name2011 Completers in IT-Related Programs2012 Estimated IT Annual OpeningsShortage (-)/Surplus (+)Washington, D.C.6,20011,687-5,487Seattle-Tacoma-Bellevue, WA2,5135,328-2,815San Francisco-Oakland-Fremont, CA1,2993,535-2,236San Jose-Sunnyvale-Santa Clara, CA1,0253,241-2,216Dallas-Fort Worth-Arlington, TX2,5864,042-1,456Austin-Round Rock-San Marcos, TX7761,738-962Boston-Cambridge-Quincy, MA-NH2,9593,906-947Houston-Sugar Land-Baytown, TX1,9462,529-583Raleigh-Cary, NC7211,303-582Portland-Vancouver-Hillsboro, OR-WA8001,349-549Baltimore-Towson, MD2,1602,670-510Columbus, OH1,3101,794-484Richmond, VA422833-411Hartford-West Hartford-East Hartford, CT315714-399Nashville-Davidson--Murfreesboro--Franklin, TN452843-391Des Moines-West Des Moines, IA194579-385Huntsville, AL292675-383Denver-Aurora-Broomfield, CO1,3461,723-377Jacksonville, FL388731-343Sacramento--Arden-Arcade--Roseville, CA697985-288Madison, WI414693-279Indianapolis-Carmel, IN9171,100-183San Antonio-New Braunfels, TX9981,133-135Las Vegas-Paradise, NV398514-116Cleveland-Elyria-Mentor, OH537647-110Louisville/Jefferson County, KY-IN471540-69Salt Lake City, UT1,0481,081-33Riverside-San Bernardino-Ontario, CA697688+9Tampa-St. Petersburg-Clearwater, FL1,1421,130+12New York-Northern New Jersey-Long Island, NY-NJ-PA6,4276,326+101Cincinnati-Middletown, OH-KY-IN1,004873+131Atlanta-Sandy Springs-Marietta, GA2,8972,763+134San Diego-Carlsbad-San Marcos, CA1,5491,412+137Providence-New Bedford-Fall River, RI-MA834690+144Kansas City, MO-KS1,1911,045+146Omaha-Council Bluffs, NE-IA735573+162Charlotte-Gastonia-Rock Hill, NC-SC1,064877+187Albany-Schenectady-Troy, NY713504+209Orlando-Kissimmee-Sanford, FL1,4051,156+249Virginia Beach-Norfolk-Newport News, VA-NC1,3191,029+290Miami-Fort Lauderdale-Pompano Beach, FL2,1651,868+297Minneapolis-St. Paul-Bloomington, MN-WI2,2601,956+304St. Louis, MO-IL1,5811,089+492Los Angeles-Long Beach-Santa Ana, CA4,1573,604+553Detroit-Warren-Livonia, MI1,7141,036+678Milwaukee-Waukesha-West Allis, WI1,341628+713Philadelphia-Camden-Wilmington, PA-NJ-DE-MD2,9612,052+909Pittsburgh, PA2,483755+1,728Chicago-Joliet-Naperville, IL-IN-WI5,7513,017+2,734Source: EMSI 2012.3 Beta Covered Employment; IPEDS
Conclusion
So is there an IT worker shortage? As we’ve shown, it depends on where you live. Some heavily tech-concentrated states and metros do have potential shortages based on the numbers we’ve presented. Nationally, EMSI estimates almost the same number of completers as annual openings for IT professionals. This apparent nationwide supply/demand balance is good to know, but it’s even more helpful to assess the situation at a more granular level.
Data and analysis from this report came from Analyst, EMSI’s web-based labor market tool. Please contact Josh Wright (jwright@economicmodeling.com) if you have questions or comments. Follow us @desktopecon.