Will East Coast Flood West Coast in Search of Jobs?
This financial crisis is fascinating to watch especially if you have no skin in the game. Last week I wrote about some of the implications: Silicon Valley and Wall Street: We're Not Immune - Here's Why
I wrote about the fall in enterprise software and hardware sales as the financial services sectors combine operations; and the potentiall fall in investment capital in startups; and the problems with selling companies as the investment banking sector collapses.
There is also another aspect: IT jobs. Financial services is a massive employer of programmers and systems analysts of all types. Silicon Valley always needs smart programmers and systems analysts of all types. Will those tens of thousands of IT workers now come flooding over to the West Coast? Will it be a modern equivalent of the advice given in 1851 by Indiana journalist John Soule "Go West Young Man."
Potentially, there are 90,000 jobs which will be lost between Lehman and Merrill. Soon, they will start to flood the tech sector seeking employment. The labor pool for tech workers will increase and put downward pressure on wages.
Foremski's Take: I don't think we will see many East Coast IT workers coming over to Silicon Valley because of two reasons: culture and skills set.
East Coast IT people chose the safe confines of a large organization, the relative job security and a regular work week. There isn't much of that around here. Startup life is your life and that's it. If they had wanted to work over here they would have already moved over here.
The skills need by a large financial services company are different to that of a startup. Companies here want skill sets that include PHP, Ruby, Flash, MySQL etc. There's not that many overalapping skills within financial services.
The largest threat from the pool of highly talented East Coast IT people is going to be to the large IT outsourcing companies in India, China and the rest of the world. Outsourcing IT to India and other regions, is becoming more and more expensive and the staff turnover rates can be as high as 100 per cent annually.
The dollar is cheap and US IT staff are highly trained in the latest IT enterprise technologies. This could lead to a reversal of the IT outsourcing trend of recent years in the US.