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Fed says tech demand outstripping supply in Boston, San Francisco

Patrick Thibodeau | Sept. 10, 2013
But the average starting salary for new computer science graduates said to be down this year by 2.5 percent.

The IT employment outlook has provided nothing but mixed signals. Tech employment is showing signs of slowing, but not everywhere. Now the Federal Reserve is saying that in some markets — Boston and San Francisco — demand for certain types of tech skills is outstripping supply.

The latest edition of the Federal Reserve's Beige Book, released this week, said that in the New England area in particular, "there remains a shortage of skilled technical workers to fill high-end IT and engineering jobs. The general consensus is that despite a large pool of available workers, the skills mismatch prevents staffing firms from fully meeting client demand."

It is a similar situation in San Francisco. The Fed reported that demand in the Bay Area is forcing firms "to compete vigorously for a limited pool of qualified workers ... [which is] spurring significant wage growth in these slots."

But here's the kicker: The National Association of Colleges and Employers (NACE) released its salary survey data this week, and reported that average starting salary for computer science graduates this year fell 2.5% from last year to $58,547 from $60,038. Computer science enrollments have been rising, 30% last year alone.

Norman Matloff, a computer science professor and leading H-1B critic, drew attention to the NACE report in a newsletter he sent out late on Friday, noting that computer science starting salaries being down "highlights the fact that, in spite of the industry lobbyists' claims, hiring in the computer field is a buyer's market."

But in Boston, it may be a seller's market. Tech recruiters agreed with the Fed's assessment, saying it's hard to fill jobs. And wages are shooting up.

Sean McLoughlin, the technology practice director at HireMinds, said the hiring demand was increased by recent decisions by Google, Amazon, PayPal and Twitter, among others, to open offices in the Boston area. All these firms are competing with "countless other start-ups and local companies" for skills, he said.

Among the skills most in demand is experience and expertise in building the Web infrastructure and applications that can handle millions of visitors, said McLoughlin. That kind of experience makes hiring difficult, he said.

In terms of programming and platforms skills, recruiters cited a broad range of programming languages, including Java, Ruby on Rails, and increasing demand for Python.

Twitter opened an office this year in Boston and has 16 technology positions posted. However, one position may represent multiple openings, said David Freier, who founded ICI Software Recruitment.

These big firms, such as Twitter, are creating a lot of competition, said Freier. "They are all in Boston, and they all suck in huge amounts of programmers," he said.


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