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Fed says tech skills demand outstrips supply in Boston, San Francisco

But the average starting salary for new computer science graduates said to be down this year by 2.5%

September 9, 2013 06:00 AM ET

Computerworld - The IT employment outlook is nothing but mixed signals. Tech employment is showing signs of slowing, but not everywhere. Now the Federal Reserve is saying that in some markets -- Boston and San Francisco -- employer demand for certain types of tech skills is outstripping supply.

The latest edition of the Federal Reserve's Beige Book, as the central bank's commentary on regional economic conditions is called, said that in the New England area in particular, "there remains a shortage of skilled technical workers to fill high-end IT and engineering jobs. The general consensus is that despite a large pool of available workers, the skills mismatch prevents staffing firms from fully meeting client demand."

The situation in San Francisco is similar. The Fed reported that demand in the Bay Area is forcing employers "to compete vigorously for a limited pool of qualified workers" and the competition is "spurring significant wage growth in these slots."

But there's another side to the story: The National Association of Colleges and Employers (NACE) released its salary survey data this week and reported that the average starting salary for computer science graduates this year fell 2.5% from last year, to $58,547 from $60,038. Meanwhile, enrollment in university computer science programs has been rising, 30% last year alone.

Norman Matloff, a computer science professor and a leading critic of the H-1B visa program, drew attention to the NACE report in a newsletter he sent out late on Sept. 6. He said that the decline in starting salaries for computer science graduates "highlights the fact that, in spite of the industry lobbyists' claims, hiring in the computer field is a buyer's market."

But in Boston, it may be a seller's market. Tech recruiters agreed with the Fed's assessment, saying it's hard to fill jobs. And wages are shooting up.

Sean McLoughlin, the technology practice director at HireMinds, said the hiring demand was increased by recent decisions by Google, Amazon, PayPal and Twitter, among others, to open offices in the Boston area. All of those companies are competing with "countless other startups and local companies" for skilled workers, he said.

Among the skills most in demand are experience and expertise in building the Web infrastructure and applications that can handle millions of visitors, said McLoughlin. It's difficult to find people with that kind of experience, he said.

When it comes to programming and platforms skills, recruiters cited a broad range of programming languages that are in demand, including Java, Ruby on Rails and, increasingly, Python.

Twitter opened an office this year in Boston and has 16 technology positions posted. However, one position may represent multiple openings, said David Freier, who founded ICI Software Recruitment.

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