How Silicon Valley tech companies can win the war for talent and diversity

Facing a critical shortage of tech workers, Silicon Valley leaders are assembling to avert a future crisis in labor.

As computing jobs grow at a rate that far outpaces the nation’s capacity to fill them with IT workers, tech companies are realizing that the industry’s strategy for managing key talent requires new thinking. In California, the situation is especially dire: Tech jobs are growing at four times the state’s average rate for other jobs.

In 2017, there were over 546,000 open computing positions while less than 50,000 computer science graduates joined the U.S. workforce. The growing IT skills gap in Silicon Valley is further magnified by California’s lack of K-12 computer science education and the tech sector’s difficult-to-predict future skills.

As truly innovative companies, we need to reimagine our approach to recruiting and training workers. Here are two contributing factors to the problem and one common-sense approach to help find a solution:

Problem: Degree inflation

Many roles in the tech sector require more training or education than high school but less than college, yet companies often require a degree — often with little gain. This counter-productivity affects the tech sector through hidden costs such as extended time-to-fill, fewer applicants, higher salary expectations, less diversity, and the higher likelihood of employees leaving for a competitor.

Problem: Labor underutilization

Only 42 percent of Americans say that a college degree is necessary for success, yet U.S. high school graduates are nearly three times more likely to be unemployed than those with four-year degrees.

This contributes to labor underutilization, which reflects both official unemployment, measured as the part of the workforce that has looked for work in the past four weeks (U-3), and those who have given up looking or work part-time because they can’t find full-time work (U-6). California has higher levels of both U-3 and U-6 unemployment than the United States as a whole.

At the same time, college education has never been more expensive, and student loan debt now totals more than $1.5 trillion. More than half of college graduates in California are in debt with an average burden of $22,744.

Solution: Apprenticeships

Apprenticeship is a proven strategy for growing an employer’s talent attraction and development pipeline.

By investing in workers with a high school diploma and the drive to acquire computing skills, tech enterprises can equip workers for these hard-to-fill roles through an employer-driven strategy combining on-the-job learning with targeted education. These workers gain valuable computing skills and stable, meaningful careers without a college degree.

Apprenticeships also enhance employee retention, with more than 90 percent of workers staying with their sponsoring company, and increase workforce diversity — a particular challenge in the tech sector.

Here, Silicon Valley is uniquely positioned to drive real change: San Jose and the greater San Francisco area are the two most ethnically diverse metropolitan areas in the country, and 63.8 percent of California’s state apprenticeship participants currently come from minority communities.

I urge my colleagues at forward-looking tech companies to join us in examining apprenticeships as a key strategy. Last month, SAP co-sponsored the first Silicon Valley Apprenticeship Summit on its campus in Palo Alto, bringing together academics and thought leaders representing major Silicon Valley companies to address the workforce gap and offer models of apprenticeship with private and public institutions. Event co-sponsors were three such partners: TechSF (California Office of Economic and Workforce Development), Techtonica (a local nonprofit providing tech training to women and non-binary adults with low incomes), and Apprenti.

A strong network of tech-focused apprenticeships in Silicon Valley can begin to help us address our key challenges and mitigate the contributing factors. The time is now to lead our industry in adopting apprenticeship programs.

Originally published in the Silicon Valley Business Journal

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