Com­pe­ti­tion for Tech Ta­lent Is Tight

L'Opinion - - The Wall Street Journal - Lau­ren We­ber, Eric Mo­rath and Me­lis­sa Korn

Ama­zon.com Inc.’s de­ci­sion to split its new head­quar­ters ex­poses a se­cret known to ma­ny com­pa­nies: It is tough to find top tech ta­lent.

As The Wall Street Jour­nal re­por­ted Mon­day, the e-com­merce com­pa­ny has scut­tled its ori­gi­nal plan to pick a single lo­ca­tion for a se­cond head­quar­ters, op­ting ins­tead to build two hubs, ac­cor­ding to a per­son fa­mi­liar with the mat­ter. The move stems from Ama­zon’s need for that ta­lent – and lots of it – so in­crea­sing the num­ber of lo­ca­tions will pro­vide bet­ter ac­cess.

The com­pe­ti­tion for high­tech wor­kers spans all of Cor­po­rate Ame­ri­ca. Today, com­pa­nies from au­to ma­kers to in­su­rers to health-care pro­vi­ders are du­king it out with West Coast tech firms to at­tract and re­tain people with ex­per­tise in fields like soft­ware de­ve­lop­ment, ma­chine lear­ning and big da­ta.

Col­leges and uni­ver­si­ties have ra­ced to boost their of­fe­rings in engineering, da­ta science and other hot tech-re­la­ted fields, but it is still not en­ough. Com­bi­ned, com­pu­ter and in­for­ma­tion sciences and engineering ac­coun­ted for just 9 % of the 1.92 mil­lion ba­che­lor’s de­grees awar­ded in 2016, ac­cor­ding to the Edu­ca­tion De­part­ment.

De­ci­ding on two, ra­ther than one, head­quar­ter lo­ca­tions gives Ama­zon more lee­way. “They have to not on­ly move to a place with a lot of wor­kers they can pull from, but they’ll have to conti­nuous­ly pull from a re­gion” to ac­count for tur­no­ver, said An­drew Ga­dom­ski, who helps large em­ployers exe­cute re­crui­ting cam­pai­gns.

Ama­zon said ear­ly on in its ex­ten­ded search that it was in­ter­es­ted in lo­ca­tions with a concen­tra­tion of uni­ver­si­ties that could help sup­ply tech­no­lo­gy wor­kers. The short­list in­cludes Dal­las; New York Ci­ty; and Vir­gi­nia’s Crys­tal Ci­ty, a sub­urb of Wa­shing­ton, D.C. All have se­ve­ral hi­gher-lear­ning op­tions.

The la­bor mar­ket for tech ta­lent has tigh­te­ned since Ama­zon star­ted its search a year ago, said Jed Kol­ko, chief eco­no­mist at In­deed.com. Exis­ting tech hubs have had stron­ger job growth and the­re­fore tend to be places with more ex­pen­sive hou­sing mar­kets, so trying to at­tract or hire 50,000 wor­kers to one place puts a strain on both the la­bor and hou­sing mar­kets, he ad­ded.

“One thing to watch is, if two places are ul­ti­ma­te­ly cho­sen, how si­mi­lar or dif­ferent are they?” Mr. Kol­ko said. “If they are quite dif­ferent in their hou­sing costs or work­force, that would be a strong si­gn that Ama­zon is loo­king to put dif­ferent func­tions in these dif­ferent lo­ca­tions. If they are si­mi­lar mar­kets, then it may just be to avoid pu­shing up the cost of la­bor and ha­ving a large en­ough pool of wor­kers to choose from.”

Hour­ly wages in the tech-hea­vy in­for­ma­tion sec­tor rose more than 30 % since the la­bor mar­ket be­gan its post­re­ces­sion ex­pan­sion in 2010. That is the best gain among a do­zen broad sec­tors tra­cked by the La­bor De­part­ment, and well out­paces the 20 % wage growth for all pri­vate-sec­tor wor­kers.

“There is a gold rush for cer­tain kinds of tech ta­lent, par­ti­cu­lar­ly in the areas of ar­ti­fi­cial in­tel­li­gence and ma­chine lear­ning, which Ama­zon is qui­ck­ly mo­ving in­to,” said Erik Bryn­jolf­sson, an eco­no­mist and di­rec­tor of the MIT Ini­tia­tive on the Di­gi­tal Eco­no­my. He poin­ted to sky­ro­cke­ting com­pen­sa­tion for people with the right mix of tech­ni­cal skills.

One way big glo­bal tech com­pa­nies have wor­ked around the shor­tage of ta­lent in the U.S. is to at­tract wor­kers from out­side the coun­try. Ama­zon is among the big­gest em­ployer of stu­dents in the Op­tio­nal Prac­ti­cal Trai­ning pro­gram, which al­lows in­ter­na­tio­nal stu­dents to work in the U.S. for one year af­ter gra­dua­tion. A spe­cial wai­ver can be gran­ted to gra­duates in science, tech­no­lo­gy, engineering and ma­the­ma­tics to ex­tend their stay.

The pro­gram is wi­de­ly vie­wed as a step­ping­stone to co­ve­ted H-1B vi­sas, which the go­vern­ment caps at 85,000 for pri­vate em­ployers each year. The H-1B vi­sa pro­gram lets em­ployers hire fo­rei­gners to work on a tem­po­ra­ry ba­sis in jobs that re­quire high­ly spe­cia­li­zed know­ledge and a ba­che­lor’s de­gree or hi­gher.

Pre­sident Do­nald Trump or­de­red a re­view of the H-1B vi­sa pro­gram but hasn’t yet cut the num­ber of vi­sas avai­lable. Com­pa­nies and re­crui­ters say that in the past year, the ad­mi­nis­tra­tion is more strin­gent­ly pu­shing back on ap­pli­ca­tions, as­king more ques­tions about whe­ther com­pa­nies tru­ly need to hire fo­rei­gn na­tio­nals for cer­tain jobs be­cause qua­li­fied can­di­dates can­not be found in the U.S.

“We had been a magnet for tech ta­lent for a long time,” Mr. Bryn­jolf­sson said. “But with the way our im­mi­gra­tion po­li­cy is hea­ded, both in the laws and the pos­ture, we’ve frigh­ten away a lot.” The White House didn’t im­me­dia­te­ly re­spond to a re­quest for com­ment.

Pre­sident Trump has ba­cked re­duc­tions to le­gal im­mi­gra­tion, ar­guing that fo­rei­gners pro­vide un­nee­ded com­pe­ti­tion for Ame­ri­cans.

SIPA PRESS

An Ama­zon ful­fillment cen­ter in Rob­bins­ville, New Jer­sey.

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