An IT Worker Shortage? It Depends on the State

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.

State 2011 Completers in IT-Related Programs 2012 Estimated IT Annual Openings Shortage (-)/Surplus (+)
Source: EMSI 2012.3 Beta Covered Employment; IPEDS
California 11,213 17,688 -6,475
Virginia 5,510 11,982 -6,472
Texas 10,144 13,158 -3,014
Washington 3,860 6,489 -2,629
District of Columbia 567 2,193 -1,626
Florida 6,586 7,644 -1,058
Massachusetts 3,788 4,609 -821
Connecticut 759 1,492 -733
New Jersey 3,003 3,623 -620
South Carolina 1,227 1,690 -463
Colorado 2,489 2,812 -323
New Hampshire 444 732 -288
Oregon 1,560 1,841 -281
Tennessee 1,713 1,991 -278
Montana 194 373 -179
Nevada 570 713 -143
Maine 132 270 -138
Vermont 266 347 -81
New Mexico 630 699 -69
Idaho 524 592 -68
Kansas 1,012 1,078 -66
North Dakota 401 460 -59
Wyoming 77 129 -52
Hawaii 365 372 -7
Rhode Island 662 663 -1
Delaware 443 417 +26
Nebraska 1,077 1,051 +26
Mississippi 650 611 +39
Alaska 328 248 +80
South Dakota 443 304 +139
Utah 2,174 1,992 +182
Maryland 5,299 5,096 +203
Kentucky 1,754 1,523 +231
West Virginia 793 506 +287
North Carolina 4,767 4,453 +314
Ohio 5,350 5,002 +348
Minnesota 3,242 2,806 +436
Louisiana 1,544 1,057 +487
Arkansas 1,390 885 +505
Alabama 2,550 2,018 +532
Georgia 4,961 4,241 +720
Oklahoma 1,783 913 +870
New York 7,850 6,921 +929
Missouri 3,425 2,474 +951
Iowa 2,420 1,465 +955
Wisconsin 3,603 2,395 +1,208
Indiana 3,619 2,203 +1,416
Michigan 5,081 2,284 +2,797
Pennsylvania 7,470 4,514 +2,956
Illinois 7,474 4,506 +2,968
Arizona 9,744 2,722 +7,022*
Total 146,930 146,247

*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 Name 2011 Completers in IT-Related Programs 2012 Estimated IT Annual Openings Shortage (-)/Surplus (+)
Source: EMSI 2012.3 Beta Covered Employment; IPEDS
Washington, D.C. 6,200 11,687 -5,487
Seattle-Tacoma-Bellevue, WA 2,513 5,328 -2,815
San Francisco-Oakland-Fremont, CA 1,299 3,535 -2,236
San Jose-Sunnyvale-Santa Clara, CA 1,025 3,241 -2,216
Dallas-Fort Worth-Arlington, TX 2,586 4,042 -1,456
Austin-Round Rock-San Marcos, TX 776 1,738 -962
Boston-Cambridge-Quincy, MA-NH 2,959 3,906 -947
Houston-Sugar Land-Baytown, TX 1,946 2,529 -583
Raleigh-Cary, NC 721 1,303 -582
Portland-Vancouver-Hillsboro, OR-WA 800 1,349 -549
Baltimore-Towson, MD 2,160 2,670 -510
Columbus, OH 1,310 1,794 -484
Richmond, VA 422 833 -411
Hartford-West Hartford-East Hartford, CT 315 714 -399
Nashville-Davidson–Murfreesboro–Franklin, TN 452 843 -391
Des Moines-West Des Moines, IA 194 579 -385
Huntsville, AL 292 675 -383
Denver-Aurora-Broomfield, CO 1,346 1,723 -377
Jacksonville, FL 388 731 -343
Sacramento–Arden-Arcade–Roseville, CA 697 985 -288
Madison, WI 414 693 -279
Indianapolis-Carmel, IN 917 1,100 -183
San Antonio-New Braunfels, TX 998 1,133 -135
Las Vegas-Paradise, NV 398 514 -116
Cleveland-Elyria-Mentor, OH 537 647 -110
Louisville/Jefferson County, KY-IN 471 540 -69
Salt Lake City, UT 1,048 1,081 -33
Riverside-San Bernardino-Ontario, CA 697 688 +9
Tampa-St. Petersburg-Clearwater, FL 1,142 1,130 +12
New York-Northern New Jersey-Long Island, NY-NJ-PA 6,427 6,326 +101
Cincinnati-Middletown, OH-KY-IN 1,004 873 +131
Atlanta-Sandy Springs-Marietta, GA 2,897 2,763 +134
San Diego-Carlsbad-San Marcos, CA 1,549 1,412 +137
Providence-New Bedford-Fall River, RI-MA 834 690 +144
Kansas City, MO-KS 1,191 1,045 +146
Omaha-Council Bluffs, NE-IA 735 573 +162
Charlotte-Gastonia-Rock Hill, NC-SC 1,064 877 +187
Albany-Schenectady-Troy, NY 713 504 +209
Orlando-Kissimmee-Sanford, FL 1,405 1,156 +249
Virginia Beach-Norfolk-Newport News, VA-NC 1,319 1,029 +290
Miami-Fort Lauderdale-Pompano Beach, FL 2,165 1,868 +297
Minneapolis-St. Paul-Bloomington, MN-WI 2,260 1,956 +304
St. Louis, MO-IL 1,581 1,089 +492
Los Angeles-Long Beach-Santa Ana, CA 4,157 3,604 +553
Detroit-Warren-Livonia, MI 1,714 1,036 +678
Milwaukee-Waukesha-West Allis, WI 1,341 628 +713
Philadelphia-Camden-Wilmington, PA-NJ-DE-MD 2,961 2,052 +909
Pittsburgh, PA 2,483 755 +1,728
Chicago-Joliet-Naperville, IL-IN-WI 5,751 3,017 +2,734

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.

Comments are closed.