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Outpacing Other Salaries
THE SERIES

  • Read the first part of this series.
  • Questions and answers about careers in high technology.
  • In Silicon Valley, companies take a creative approach to recruiting.
  • Cultivating a New Crop of Workers

    Second of two parts

    By Peter Behr
    Washington Post Staff Writer
    Mon., Dec. 1, 1997; Page A01

    Robert Weiland figures that every new programmer he hires who can handle powerful database software is worth at least $100,000 a year in extra revenue to his company, Tracor Systems Engineering, a Rockville defense contractor.

    But these days, such technicians are hard to find in the Washington area — so great is the demand for up-to-the-minute computer and networking skills. And they're especially scarce in Southern Maryland, where Weiland manages Tracor's operations at the Patuxent River Naval Air Warfare Center.

    So, like embattled military commanders who send cooks and truck drivers to the front, Tracor managers have established a training program to create their own database programmers. The trainees — who include a security guard, a secretary, a courier, a warehouse worker and a dozen other nontechnical employees — recently finished a six-month course and most are expected to move into programming or other technical jobs.

    Tracor's makeshift squad of programmers is just one example of the extraordinary measures Washington area technology companies are taking to cope with widespread shortages of computer and networking technicians — a job crunch that threatens to curb the region's growth.

    A majority of the Washington region's estimated 2,500 technology companies face Tracor's dilemma, according to employer surveys. And these companies have some stark choices:

    They can train their own workers — as Tracor did — and take the risk of seeing them jump ship to another company with their newly acquired skills.

    They can try to buy the skills they need by hiring away each other's employees or competing for the limited supply of new graduates, luring them with $10,000 signing bonuses and stock options. As a cheaper alternative, they can also try to recruit foreign tech workers.

    They can try to expand the local supply of tech workers by cooperating with local universities, community colleges and high schools.

    Like many Washington companies, they can resign themselves to the worker shortage, leaving millions of dollars in unfilled contracts and unsold services on the table.

    Shopping the Job Fairs
    As the tech worker shortage intensified a year ago, the first reaction of many companies was to raid a competitor's work force. "We're stealing from each other," complained April Young, executive director of the Potomac Knowledgeway Project, a Reston nonprofit group that supports tech entrepreneurs.

    Almost every month in the past year, employers have gathered at suburban hotels for technology job fairs that attract hundreds of workers. But they've found that most of the workers are already employed and are shopping for better jobs and more pay, fair organizers say.

    Sharon Barshow, a technical recruiting manager for Ajilon, an information technology firm with offices in Towson, Md., spent $4,200 to attend a two-day job fair in Vienna, Va., last winter. Her catch after more than 100 interviews was a single new recruit. "If I hire one person at a fair, it's successful. If it's two, it's great," she said.

    DynCorp, which provides computer services to federal agencies, is one of many firms forced to pay salary premiums to get workers. "I'm never caught up," said Bettie J. Kennedy, DynCorp's vice president of human resources. When she can't find new employees to fill database programming vacancies at $40 an hour to start, she's forced to pay $70 an hour to hire technicians from temporary employment agencies. "If they're a warm body and can do the job, we'll take them," she said.

    The result often has been a costly, zero-sum game where one company's new hire is another company's fresh vacancy. "Companies are raiding each other. People are jumping from one job to another," Weiland said.

    But as the labor scarcity deepens and signing bonuses escalate, many companies are coming to a different conclusion: The costs of training and educational investments are a bargain, compared with the bidding war in the job market.

    "We've got to grow our own," said William A. Craig, a vice president of Merchant's Inc., which is struggling to find skilled technicians to run computers used for automotive diagnoses.

    In on the Ground Floor
    The growth process starts at the beginning of the tech worker pipeline, with efforts to increase the number of students graduating with technical specialties.

    Some area companies, weary of competing for a limited number of college graduates, are putting money directly into college programs to give themselves first crack. For example, each of two dozen telecommunications companies contributes $25,000 annually to Virginia Tech's highly-rated Bradley Department of Electrical and Computer Engineering in Blacksburg.

    For their money, the companies have a say in what the students are taught and the research they do, said Virginia Tech professor Jeffrey H. Reed. "We're very much industry-driven here," he said. "One of the ways we've been able to endure the financial cutbacks [by the state] was relying on industries to give us direct financial support. We try to tune our classes to industry needs."

    But this sort of direct university-corporate partnership is still relatively rare, according to Patrick F. Valentine of American University, who surveyed 100 major area technology companies on the issue this year. "Washington area companies are significantly less connected to universities than are companies nationally," Valentine said. "We're falling behind."

    And some of the brightest graduates of local programs go elsewhere. At Virginia Tech, for example, many of the corporate sponsors are from outside the region — and as a result, only about one-third of the program's graduates remain here.

    "They're getting big offers from companies in Texas and California" that support the program, Reed said. "Somehow, we need to retain these people in Virginia."

    A beneficiary of the Blacksburg program — and an example of the brain drain — is Brian Fox, 31, who completed his master's degree at Tech last summer. He enjoyed the atmosphere at Blacksburg, with "industry people ... coming through the labs once a week." But after receiving several good local job offers, he took a position in communications engineering in Colorado.

    In response, some companies are reaching further back into the educational pipeline, trying to form ties to promising college undergraduates and even high school students.

    This summer Computer Data Systems Inc., a Rockville computer systems firm, rolled out the red carpet for five area college students it hopes to recruit. CDSI provided them with $15-an-hour wages, three paid vacation days, high-level instruction in new software skills, tuition assistance for the final year of college and the promise of permanent jobs after graduation.

    "Most of my classmates are thinking about: 'What do I do next?' " said one of the interns, University of Maryland senior Shannon Saltzman. For Saltzman and the others, the question instead will be: Which of a long list of employment or graduate school offers do I take next year?

    CDSI officials acknowledge that their generosity is a calculated gamble that they can hold onto these interns after graduation.

    Neurosystems Inc. in Bethesda moved even further down the employment food chain. This summer the Internet services firm hired John Boursiquot, a Bethesda-Chevy Chase High School junior, to work on an important computer training project.

    Chief executive Edward K. Robertson said he'll offer Boursiquot and other top high school students tuition help for college — and a guaranteed job later — as long as they complete college with good grades.

    Several Northern Virginia tech companies have a similar arrangement with Chantilly Academy, a science and engineering program at Chantilly High School.

    College Ranks Thinning
    Local technology companies realize that even a rapid acceleration of college graduates is unlikely to meet the area's growing tech-worker needs. And that means the companies must look for innovative ways to supply the local tech boom with human capital.

    "If you're going to hire out of college, you're going to come out way short," said Bruce Hamilton, Tracor's president and chairman of the Maryland High Technology Council. "The numbers aren't there today. It's woefully inadequate."

    Some figures illustrate the shortfall: If every 1996 graduate from the computer and engineering programs at 15 Virginia universities — bachelor's, master's and doctoral degrees included — had gone to work in Northern Virginia, they would have made up only one-fourth of that area's estimated technology worker shortage.

    The shortage has prompted new proposals from leading Maryland colleges to double the number of computer-related graduates over five years. Virginia business and education leaders are proposing an even more ambitious plan: to triple their state's tech graduates over the same period.

    But industry leaders have also concluded that adult training opportunities must be dramatically increased, both for older technology workers with out-of-date skills and for workers with aptitude for technology but no formal training.

    A new center for technology worker development is about to open at Northern Virginia Community College, supported by a $2.4 million state grant. It will help adult workers determine the training they need to enter or advance in technology careers.

    "We're at full employment in this region," said Ray Pelletier, executive director of the Northern Virginia Technology Council, an industry group. "So the issue is, how do we help people who are underemployed make the transition" into technology careers through training?

    The training option must overcome widespread misgivings among employers who believe it doesn't pay off in the long run.

    A recent survey of 700 Maryland technical and nontechnical firms found that more than 70 percent of employers provided training for 10 percent or more of their workers. But only one-quarter of the companies provided training to more than 75 percent of their employees annually.

    "Some employers are very pro-training, others are only worried about their profits," said Patrick Devlin, a professor at Montgomery College who teaches auto repair technicians. "They won't pay people to be trained. If they need somebody, they'll steal them" by offering higher pay.

    "The vast majority of high-tech firms worry that if they spend money on training or education the employees may leave," said Joseph Willmore, president of the Metro D.C. chapter of the American Society for Training and Development. "Too many organizations conclude — incorrectly — that from a long-range perspective, it isn't worth it."

    That resistance will erode when more employers face the reality of the skills shortage, predict experts like Pelletier.

    Ciena Corp. in Linthicum needed skilled workers to meet surging demand for its state-of-the-art devices that multiply the capacity of fiber optic telecommunications lines. It developed training programs that allowed Ciena to quadruple its payroll to more than 500 people this year.

    To achieve its goals, Ciena has hired hundreds of Marylanders like Desiree Morris, Rhoda Klump and John Reyes, who had no experience in fiber optics assembly, and trained them on the job.

    The trainees are a diverse group: Morris is a retired Air Force civilian employee, Klump is a former cable assembler, and Reyes had been an air-conditioning technician. They are learning the ropes with the help of Ciena's own software instruction programs that provide step-by-step guidance, visible on computer terminals above the workers' stations.

    "I've been through a lot of training," said Morris, 34, "but nothing like this."

    Technology industry leaders hope to persuade more companies that their self-interest requires them not only to train current workers but also to offer prospective recruits financial help to take training courses at local colleges and technical schools. In return, the employees would agree to remain with the company for an agreed-upon period of time.

    The Northern Virginia Technology Council intends to launch such a program in January, if it gets enough support from employers. "Companies are ready to do it," said NVTC's government affairs manager, Doug Koelemay. "They want to see the details of the proposal."

    Looking to Other Countries
    For many Washington area companies, the comparison of training costs versus recruiting costs is only part of the hiring equation.

    Another option is recruiting foreign technology workers, who often can be hired for less than their American counterparts, according to analysts like David Autor, who is researching demands for skilled workers at Harvard University's Kennedy School of Government.

    "You can hire here or you can hire in India," Autor said. If wages are bid up too high in this country, the search for foreign alternatives will increase, he said. "It's very hard to get around the economics of these things."

    Good data on the hiring of foreign technology workers in the Washington region don't exist, but nationally, 144,000 workers in "specialty" categories — primarily skilled technicians — immigrated to the United States in fiscal 1996. They accounted for about half the nation's overall increase in technology jobs last year, according to data from the Immigration and Naturalization Service and the American Electronics Association.

    The appeal of well-trained but less expensive foreign workers has kept Reston technology executive John J. McDonnell Jr. on a steady shuttle between Northern Virginia and Ireland.

    McDonnell heads fast-growing Transaction Network Services Inc., which handles electronic credit, calling card and check validations. He has set up a version of his Reston operation outside Dublin, taking advantage of a government-paid bonus for every Irish worker he hires. "The talent is there, every bit as good" as in the United States, he said.

    "When I drive around the suburbs of Dublin, it's like the Beltway," he said, because so many other U.S. information technology and telecommunications firms have set up shop there.

    Proxicom Inc., a developer of Internet-based business and consulting services in Reston, is "as aggressive as it can be" in recruiting foreign workers, said founder and chief executive Raul J. Fernandez. "As the son of a first-generation immigrant [his father is Cuban-born] I feel strongly about that."

    But Proxicom also is trying to manufacture its own American-born technicians, hiring some whose technology skills are rusty and some who arrive with no tech skills at all.

    One recent Proxicom hire, Rich Aurora, was a 1984 computer science graduate from Virginia Tech. He had specialized in large mainframe computer operations, moving up into supervisory roles at a Washington area financial services firm.

    But Aurora's mainframe background, shared by thousands of Washington area tech veterans, is a turnoff to many new high tech firms, according to Proxicom Vice President Karl Lewis.

    "Their methodology of thinking is fundamentally different from what we do," he said. "There's a generational split." But Proxicom was willing to see whether Aurora could adapt to the new Internet-based models of computing.

    Another new hire this year, Kelly Boyer, had no technology experience. Hired at Proxicom as an administrative assistant, Boyer pestered supervisors for the chance to learn how to design Internet Web pages. With Proxicom's encouragement, she got training both on and off the job, Lewis said.

    Proxicom then paired up the two. Boyer had a freshly minted exposure to Web-based programming but didn't understand much about how business works, Lewis said. But Aurora did, and that made them an effective team.

    Much more such experimentation will be needed in the years ahead to sustain the Washington area technology boom, according to executives and educators. If local companies can't find qualified workers at reasonable salaries in this market, they'll move operations or expand somewhere else.

    "We're just on the bow wave of change," said Tracor's Hamilton. "Society is just beginning to see that this technology explosion will permeate every part of our lives in the future."

    © Copyright 1997 The Washington Post Company

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