Labor Shortage Persists in Some Fields

By JOE LIGHT

There are nearly 14 million people looking for a job, but few have the skills to fill the four computer engineering openings at Gowalla Inc.

Davey Thompson

The Austin, Texas-based start-up, which competes with FourSquare Inc. in location-based social networking, hopes to add the programmers to its 27-person staff, but finding applicants with the right skills is a challenge, said Gowalla Chief Executive Josh Williams. "Most people we want are employed somewhere already. We don't get a lot of applications coming in," he said.

Overall, companies have slowly begun to hire again. In January, employers added 36,000 jobs, according to the Labor Department. The number of job openings has grown more rapidly. According to the Conference Board Inc., a nonprofit research organization, there were 4.3 million advertised job openings in January, 16% more than a year ago.

Nationwide, there were about four unemployed people for every job opening posted online in December, according to the Conference Board. But disparities underlie the overall rate. Finding highly qualified applicants for more technical positions is proving a challenge for some companies. Many are winding up changing their business strategy or settling for less-than-perfect candidates.

Last year, Gowalla was forced to outsource the development of one of its applications for the Android operating system because it couldn't find enough in-house engineers. Many of the skills needed by its programmers are so rare that the company is now willing to hire computer engineers without related experience and train them on the job, Mr. Williams said.

A software engineer with no experience might start at $50,000, but after a few years of work and the right skills, talented engineers can easily make $150,000 or more, he said.

It's not just technology companies feeling the pinch. Accounting firm Ernst & Young LLP has 1,500 open positions in the U.S., a 70% increase from this time last year, said Wendy Edgar, Americas director of experienced recruiting.

Ernst & Young declined to give salary data. According to Glassdoor.com, which allows employees to anonymously post salary data, information technology advisory managers at Ernst & Young can expect to make between $80,000 and $180,000 a year.

While openings for marketing managers, recruiters and administrative positions get a lot of applications, filling more technical positions has been a challenge. When Ernst & Young advertises for openings in its finance and IT consulting practices, which require experience and sometimes advanced degrees, they might only get 10 résumés in a week, and even fewer will meet the qualifications, said Ms. Edgar.

"We get a lot of applications, but some positions are so technical that the group of people we can go after is very small," she said.

In the past six months, Ernst & Young has increasingly faced situations where candidates receive counteroffers or have multiple offers on the table. Though the company hasn't yet had to go outside the salary ranges it normally offers for talent, Ms. Edgar said.

Even in the long-beleaguered construction industry, hiring can be a challenge. Horsham, Pa.-based home builder Toll Brothers Inc. has slowly brought back construction and land acquisition managers over the last year, after shrinking its work force by 27% between November 2008 and November 2009. Typically, when an opening arises, recruiters can pick from the best of its former employees, many of whom are still unemployed, said Jon Downs, senior vice president of human resources. Toll has had more difficulty finding qualified applicants for its handful of IT and Web developer openings, Mr. Downs said.Over the last year, some of those positions have taken more than six months to fill, he said.

Enterprise resources software firm Lawson Software Inc. has 237 openings right now, mostly in sales-related functions. To support the hiring increase, the St. Paul, Minn.-based company has tried to bolster its recruiting staff.

"So many companies are ramping up their recruiting levels right now, that it's hard to find contract recruiters," said Kristin Trecker, senior vice president of human resources.

Redwood City, Calif.-based digital publishing company Shutterfly Inc. hopes to add nearly 100 employees to its 600-person staff, said Peter Navin, senior vice president of human resources. Most of those openings are in engineering and marketing, he said.

"Matching the skills we require to the skills of the applicants we see is a real challenge," he said.

Right now, Mountain View, Calif.-based social media company Meebo Inc. is hiring for more than 30 positions. The 150-employee company needs software engineers and sales executives but is finding that very few qualified candidates come through job listings, said Tom Perrault, vice president of human resources.

"We would never turn down a good JavaScript engineer or analytics person. It's a perpetual job opening," Mr. Perrault said.

According to the Conference Board, even if all 225,500 job seekers whose last jobs were computer and math-related were to take a current opening, there would still be nearly 350,000 positions left to fill.

That makes finding certain kinds of engineers extremely competitive. Last summer, Meebo began offering employees $5,000 for referring a hire in its top 10 most-needed positions, which included JavaScript engineers, data engineers and sales account executives.

Mr. Perrault declined to give salary data. According to Glassdoor, software engineers at the company make between $80,000 and $110,000 a year.

The struggle to find Java engineers has resulted in operational difficulties.

Meebo had to delay the launch of a product by two months last fall because of the programmer shortage, Mr. Perrault said.

Write to Joe Light at joe.light@wsj.com