As I Was Saying

Hire Costs: Tech Job Recruiting Faces More Hurdles in Top Markets

Automation could boost jobs in some categories, assuaging robotics fears 8/14/2017 12:15 PM

Operations executives who continually fret about the difficulty of hiring top technical talent -- either at programming or system operating companies -- will take small solace from a new analysis by CBRE Group Inc., although the real estate firm's "Scoring Tech Talent Report" quantifies their concerns and offers some explanations why competing companies "are willing to pay a premium for top" technology staff.

"Strong demand for skills such as software development, hardware engineering and information security, coupled with a tight labor supply" are affecting companies' decisions about where to locate, the CBRE report explains in its checklist of 50 markets, focusing on the ten most expensive metro areas. Predictably, the San Francisco, Seattle, New York and Washington, D.C., markers have average tech salaries 17% to 33% above the national average, But even in No. 7 Denver and No. 9 Orange County, Calif., salaries are at least 8% above the national average, according to CBRE. Cities such as Atlanta and Newark, N.J., climbed up in this year's Fifth Annual CBRE study.

For cable operators, the tech staffing issue confronts the reality of geo-location, since their facilities are a factor of their franchise areas, although central technology headquarters can be located elsewhere. Vendors don't have such geographic constraints, although many U.S. suppliers have gravitated to the tech capitals on CRBE's roster.

CBRE also developed a "Tech Talent Analyzer" to calculate the cost of doing business in each of the 50 markets, including nearby Canadian cities. Using a formula that encompasses the cost of talent and real estate for a 500-person tech group using 74,000 square feet of office space, CBRE gauged total expenses ranging from $57 million annually in the San Francisco Bay area to $24 million in Vancouver, British Columbia.

CBRE pointed out that true high-tech companies compete with the tech needs of other industries that employ technology staffers, such as media and telecom providers.

“Only 37% of all tech-talent workers are employed in the high-tech industry, meaning tech companies must compete with other industries that employ the remaining 63% of tech workers," Colin Yasukochi, CBRE's director of research and analysis in the San Francisco Bay Area, said.

That data also enabled CBRE to identify "Brain Gain or Drain" communities -- that is, areas that attract employees (San Francisco; Dallas-Fort Worth; Seattle; Atlanta; Charlotte; Houston) versus markets such as Boston, Los Angeles and Washington , D.C., from which tech graduates leave town.

CBRE will run a "Scoring Tech Talent" webinar on Aug. 28 to explain its Tech Talent Scorecard and the real estate implications of the shifting tech labor force.

How AI and Robotics Will Create Jobs, Not Destroy Them
Shortly before CBRE's tech talent and real estate report surfaced, another analysis by International Data Corp. (IDC), emerged, evaluating the growing use of artificial intelligence in business management and its impact on jobs.  

The IDC study, sponsored by Salesforce, the software automation firm, largely focused on robotic process automation (RPA) -- including applications in customers relationship management (CRM) -- in the financial and insurance sectors. But an analysis of IDC's data concluded that RPA can also be applied to industries with large customer support and request processing requirements, such as telecommunications.

IDC concluded that global AI activities will produce $1.1 trillion in GDP and create 800,000 new jobs by 2021. The white paper did not single out telecommunications applications, but given the scale of the industry, it will account for a significant share of the financial action. IDC expects that AI will lead to $726 billion in increased revenue and $265 billion in decreased expenses.

IDC predicted that 2018 will be a "banner year" for AI adoption.

As for the expectation for job growth, IDC acknowledged that it is "well aware [of] significant debate about the long-term impact of AI on jobs." It said its forecast "embodies an assumption that AI will lead to net-positive financial benefits, which will drive job growth."

"Some roles may be eliminated, and others will be created or enhanced, not unlike the change in jobs in IT departments during the advent of the cloud," according to the IDC analysis, which used the assumption that "40% of the net-new revenue will support increases in labor and the rest will go for capital and other operating expenses that may replace jobs lost to automation."

Don't Fear the "Jobapocalypse”
Adding to the confusing outlook about the future of work, The Information Technology and Innovation Foundation issued an analysis on Monday (August 14) proclaiming that "Technology Will Not Eliminate Many Jobs."

ITIF President/Founder Robert D. Atkinson explained that his think tank conducted its own manual analysis of 840 federally defined occupations from the U.S. Bureau of Labor Statistics, which compared 2014 employment to the agency's jobs projection for 2024. By combining the BLS employment forecasts with ITIF’s “risk of automation” variable, Atkinson predicted that "employment in high-risk occupations will increase 2% percent by 2024 while employment in low-risk occupations will increase 10%" by then while the overall labor force grows by 5%.

Atkinson reassuringly said that, "We should all take a deep breath...every time you read another piece about the coming 'jobapocalypse.'"

Among the 840 BLS categories that ITIF evaluated, here are some affecting to the telecomm and media industry job outlook for change of employment in the decade between 2014 and 2024. It includes only a handful face small declines, while several categories, such as video editors, information system managers and market research are expected to show sizeable growth.