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Small Software Engineering Firms Struggle To Fill Jobs

Oct. 15, 2012 - 01:42PM   |  
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Unemployment may hover nationally around 8 percent, but if you’re a capable software engineer with U.S. citizenship and decent prospects at getting a security clearance, finding a job shouldn’t be a problem.

Small companies across the country are struggling to find the talent they need to fill positions. While the big defense contractors may be able to invest months and even years in developing young talent, small companies, with their limited overhead, need people right now — people who just don’t seem to be available.

Modus Operandi, a 60-person company based in Melbourne, Fla., has gone from working with one recruiter to four since January in a bid to fill roughly 10 openings as the company’s work with intelligence data has grown.

“They say, ‘Look, if you could take non-U.S. citizens, or people that didn’t need to have a security clearance, I would have filled these positions long ago,‘“ said Rick McNeight, Modus Operandi president.

And with a slew of new contracts, McNeight said, the company may double the number of available positions.

ISS, a small defense contractor based in Colorado Springs, Colo., has had trouble finding the expertise it needs, regardless of nationality, company CEO Jay Jesse said. The result is that while the company is growing, it can be difficult for ISS to get new contracts because of a lack of talent available.

“We haven’t had to turn anything down,” Jesse said. “There have been times when we may not have been able to start the project as early as we want to, and the customers that we have often understand [but can be impatient]. They come back and hit us over the head every week and say, ‘Are you about ready to ramp that up?’” What has made the situation far more difficult, Jesse said, is that the government contracts are of increasingly short duration, giving the company less time to get a team in place. And because the company is small, it can’t carry the overhead of excess engineers not currently tasked to a contract.

“It used to be that government contracts had long cycles,” he said. “You could be working a three-, four-, five-, six-, even a seven-year contract. So of course it’s not as big of a deal for you to bring over someone who is brilliant in one field, because you know they’re brilliant, and train them in another field. You know they’re going to pay dividends. More and more, these projects are six- and nine- and 12-month projects. You’ve really got to get somebody that can come in and within four weeks be carrying their weight.”

To help broaden the potential talent pool, ISS opened an office in Denver purely for recruiting. The Denim Group, a small company based in San Antonio, opened an office in Austin for similar reasons.

Still, despite the office in Austin, most of those applying for jobs just aren’t capable, said Denim Group principal John Dickson.

“It’s astonishing how many resumes of people that we get that claim to be developers that are really not software developers,” he said. “They may claim that on their 1040, their LinkedIn profile may say software developer, but if you ask them basic tasks, they stumble.”

For a small company, having less-than-fully-capable people isn’t an option, Dickson said.

“We have to have people who are great,” he said. “We do client service work. We can’t put people out there who are knuckleheads.”

The result of all of this competition is that salary demands have exploded and companies are having to find new ways to interest and retain talent.

“We have to be creative to get to people, because the demand for money is pretty high,” McNeight said. “A lot of these people who are Java experts are consultants. They’re making a lot of money as consultants and they don’t want to go work for a company.”

Many small contractors have turned to college campuses to recruit students for future careers. But with large contractors building institutional relationships with colleges as part of larger engineering initiatives, companies are competing against big names for students’ attention.

One of the techniques all three executives mentioned is an increased emphasis on getting press attention. Just having the company’s name appear in print might help attract potential employees.

“If we get an article and our name’s in it, even if we’re talking about hiring, sometimes if you’re just in an article and it looks like you’re doing well, people might send in a resume,” McNeight said.

As the companies do their best to fill positions, the underlying demand of growth remains.

Dickson said that engineers are being elevated aggressively, even excessively, because of the need to fill positions, creating what he described as a bubble.

“It creates weird externalities where they think they’re rock stars, and they’re not,” he said.

And because of the push for short-duration contracts, there’s a temptation just to hire people.

“Since we’re in an industry that bills by the hour, there’s a lot of pressure to just go out and get people and put them in,” Jesse said.

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