The Increasing Challenge of IT Staffing in Austin
It’s no big secret or surprise that IT staffing in Austin is challenging, even for the most prestigious companies. More and more organizations are moving their headquarters to Austin, expanding, or starting up in the fair city every day. Austin is an IT hub, boasting some of the brightest IT talent in the world. To understand why IT staffing is so difficult, you only have to look at the national trends and then amplify them for Austin.
In 2018, ADP and Moody Analytics collaborated on a report that determined one of the most critical economic challenges was “the difficulty employers are having in finding qualified employees to fill a record 6.7 million job openings.” The report doesn’t focus solely on IT jobs, but it does list technology positions in its top three industries facing shortages.
Why the labor gap? Technology is driving growth in virtually every sector. Companies in all industries are automating more processes, integrating more systems, transitioning to the cloud, leveraging artificial intelligence, investing in cybersecurity solutions, and establishing or enhancing their digital and online capabilities. All of that development, engineering, hosting, design, QA testing and more requires skilled talent, talent that is in hot demand, particularly in Austin.
According to Statista, the top five IT functions with the greatest skills shortages are:
- Big data/analytics (44%)
- Artificial intelligence (39%)
- Cyber security (39%)
- Enterprise architecture (34%)
- Business Analysis (31%)
Even more evidence of the labor shortage comes from the Society for Human Resource Management (SHRM). In their 2019 The Global Skills Shortage report, 83 percent of respondents were cited as saying they have had trouble recruiting suitable candidates in the past 12 months and 75 percent believe there is a skills shortage. The reasons for the struggle?
- Competition from other employers (43%)
- Candidates lack the needed work experience (36%)
- Candidates lack the right technical skills (35%)
- Low number of applicants or lack of interest in the organization (33%)
- Salaries and benefits are not competitive for the market (32%)
- Candidates lack the right workplace (soft) skills (30%)
The report found that one of the most common ways companies are trying to solve the staffing problem is by outsourcing their recruiting efforts via a third-party staffing agency. Many are also hiring contractors to fill those positions.
The Austin Effect
The Dallas Business Journal reported that 1,800 companies left California in a single year. Their number one relocation location? You guessed it: Texas. Why? According to the report, Texas offers a better business climate, with pro-business tax structure, world-class infrastructure, skilled workforce, and its central North American location. Austin, in particular, offers a wealth of skilled IT talent but maybe not as much as needed to fill all of the available jobs from the influx of companies. The Austin Chamber recently disclosed some interesting numbers:
- Over 7,200 employers in the Austin metro area are in high tech industries
- Jobs in Austin’s tech industries total 161,433, or 15.8% of all jobs, compared to 8.7% nationally
- In 2018, jobs in Austin’s high tech industries grew by 6.6%, surpassing the metro’s 3.6% total job growth
- In 2018, the majority of high tech jobs (41.7%) in Austin were in “High Tech Information & Other IT”
- Over the last five years, employment in high tech industries has grown by 24.9%, compared to 20.7% for all industries in Austin
- There are 7,201 high tech employer firms in Austin, growing by 5.3% in 2018
Keep in mind that while this report focuses on high tech companies, there are plenty more non-technical companies that are hiring internal IT talent for product development, marketing, and e-commerce. These companies are competing for the same talent, making IT staffing in Austin not for the faint of heart.
IT and Digital Staffing Companies Bring Advantages
Most large companies will have an in-house talent acquisition team, but they often work at a disadvantage compared to IT recruiters when it comes to recruiting top talent because they have a slower hiring turn-around time and a smaller pool of candidates from which to recruit. They also frequently suffer from analysis paralysis, taking too long to make decisions. With the tight talent market and all of the competition vying for the same talent, it’s no wonder they’re under so much pressure. It’s common for in-demand talent to have a minimum of six opportunities at the same time. Most candidates are ready to move quickly and if the hiring company can’t seal the deal fast enough, they’re on to the next offer.
In order to reduce multiple interview steps and shorten the time to fill a position, many Austin companies partner with an Austin-based IT and digital staffing company to help find contractors and/or full-time employees much faster. The staffing company will have the most diverse and numerous connections with IT talent and know what it will take to get them to accept an offer. This gives their clients a huge advantage in quickly finding specific talent and being able to craft an attractive offer that beats out any offers from the competition. Remember: companies have to act fast once they find the talent they want. Any reduction in interview, offer, and negotiation time can be the difference between building a powerful IT team and settling for something less.
Related: 4 Tips for Reducing Time to Hire
Even if the end goal is to hire a full-time employee to fill a particular position, contract-to-hire can be a smart stopgap. Often, these contractors end up being a perfect fit and give the employer and employee time to feel things out before making it a more permanent position. Beyond testing skills, it ensures those soft skills mentioned above as being an important hiring factor align with the culture of the company.
The Future Is Bright
IT staffing in Austin will likely continue to be highly competitive. The Austin Chamber reports a long list of companies looking to start-up or expand in Austin in 2019. Among those expected to create the most jobs are, of course, high tech.
- Amazon will expand to Austin, creating 800 new jobs to enhance its digital product development
- Google will expand its Austin offices by 750 new hires for its internet search and related technology development
- Arrive Logistics manufactures shipping management software and will create 500 new jobs
- Zoho builds integrated, cloud business applications and will make Austin their new headquarters with 440 employees
While these are among the largest employers, dozens of smaller companies will also open new offices or expand their operations in Austin in 2019. That’s thousands of new jobs in a single year, many of which will demand highly-skilled IT talent.
Fortunately, local IT and digital staffing companies are standing by to help. IT talent is in the driver’s seat and only the most agile, quick-to-act companies stand a chance to land that talent. By establishing processes that will speed hiring decision making, partnering with the right staffing agency, and being willing to make attractive offers, companies can overcome the IT staffing challenges in Austin.