A good tech guy (or gal) is hard to find

May 29, 2012
(Crain's) — A new study today from Manpower Inc. confirms what tech startups in Chicago know too well: Top-notch tech talent is really hard to find.

According to the survey, 49 percent of U.S. employers are struggling to fill critical jobs. Skilled trade employees are the hardest positions to fill, but engineers and IT staff run a close second and third.

“This is a global problem, but Chicago is certainly exhibiting the same issue with talent shortages in the IT and engineering areas,” said Anne Edmunds, Chicago's regional director for Milwaukee-based Manpower.

The ever-increasing competition among employers to snag the best programmers “is a boxing match,” said Aaron Block, CEO of BayRu, a new e-commerce site that caters to consumers in Russia and the former Soviet Union. “Wherever there's a legitimate tech community, there's a shortage, and Chicago is clearly a legitimate hub now.”

Mr. Block struggled to fill a position that required expertise in Ruby on Rails, an in-demand programming language, and just recently agreed to sponsor an Indian citizen's H-1B visa in to order to fill the job. H-1Bs allow U.S. employers to temporarily employ foreign workers in specialty occupations.

Manpower itself has had trouble filling Chicago tech jobs with U.S. citizens.

“Our company was doing a large IT project on the North Side of Chicago that required 70 programmers, and we needed to go outside the country for more than 60 percent of them,” Ms. Edmunds said.

Andrea Moran, co-founder of Marengo Hampshire Partners, a Chicago executive search firm focused on staffing startups, said that demand for tech employees has doubled in the past 18 to 24 months here and that it's sometimes a fight to land the best person.

But she added that the problem is made worse by companies that fail to effectively and creatively find talent. “If you want the best in class (talent), you've got to play it like the coasts do,” she said. That means offering all new hires, even ones straight out of school, equity in the company.

At a Northwestern University-sponsored entrepreneurship conference last week, Groupon Inc. CEO Andrew Mason noted that the salaries for tech talent on the West Coast has skyrocketed in recent years. "The cost of engineers in Silicon Valley has tripled in as many years because of the competition between Facebook and Google," he said.

Though Chicago's tech workers don't command the same salaries as their counterparts in California or New York, Ms. Moran said an entry-level programmer can expect to take home $85,000 to $90,000 a year; someone with three to five years of experience earns about $120,000; and a “rock star” programmer is looking at salaries of $130,000 to $165,000, plus 1 to 1.5 percent equity.

Even though Chicago isn't Silicon Valley, the same arms race mentality that has ratcheted up salaries there is in play here, too. “It's so competitive that Groupon is buying companies for their tech talent,” Mr. Block said. “That makes it a little unfair for startups in the earlier stages.”