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Fuel to the Flames: Looming talent shortage threatens tech industry

Utah’s tech industry has had skyrocketing growth in recent years, and its trajectory is looking stronger than ever. But is Utah’s tech industry positioned to sustain long-term growth?

Richard Nelson, president and CEO of the Utah Technology Council (UTC), is ecstatic about all that the state’s tech industry has accomplished, but says it’s not time to rest on our laurels. Instead, he says, it’s time to focus on the work that still needs to get done to continue the industry’s impressive growth.

He joins many throughout the industry who fear that the state is not producing enough qualified workers to keep the momentum going.

“Since 2007, the No. 1 issue for our industry, which has over 5,000 tech companies, has been talent shortage,” he says. “The question is: How can we find enough talent to fuel the growth of these companies?”

Nelson says that Utah’s tech talent shortage is so dire that many companies are starting to relocate or open secondary offices outside of Utah. “We’re starting to export our knowledge economy. We’re exporting thousands of jobs that pay anywhere from $60,000 to $160,000,” he says, noting that these are lost dollars that won’t be spent bolstering Utah’s economy. “When our companies open an office elsewhere, they’re doing it because they can’t find enough talent. We’ve seen that they’re having to go somewhere else, like Minneapolis, to get people with the knowledge, and the quantity of workers that they can’t find here.”

The UTC and several other tech- and education-focused organizations, like the Women’s Tech Council and Prosperity 2020, are working with government and education leaders to try to solve the workforce shortage. “We’ve got an extraordinary opportunity to be creative and find solutions, but we need to seize the opportunity and align with the opportunities.”

Nelson is excited about an experimental program the UTC has launched with Utah Valley University (UVU) and Salt Lake Community College (SLCC). “We took hot jobs that don’t require a degree at a basic level—web developer, software developer and computer programmer—and have asked UVU and SLCC to create a curriculum that will prepare nontraditional students, like the underemployed, for these jobs. They’ll get a certificate when they finish. We’re in the midst of recruiting students for that [program] at those two institutions. Ask me in a year how that’s going.”

Nelson is also excited about a recently passed bill that creates a strategic workforce investment plan to develop stackable, credential pathways (such as certificates), in an effort to develop more tech-ready employees.

“This bill puts incentives for kids in high schools and colleges to get stackable credentials or certificates for [skills] that are in high demand. It gives them an ability to earn more,” he says, adding that he also hopes to see more tech in the classroom at every education level.

“Teachers need to be not afraid of technology, and we need people to realize that math is not for nerds. Math is good for critical thinking skills. We need critical thinkers, and math does that no matter what level you are,” he says.

Nelson adds that while Utah’s tech workforce shortage is a problem hindering the industry, it is getting easier for companies to recruit out-of-state talent. “We have critical mass here and unicorns here, and many more companies that are growing, thriving here,” he says. “We clearly are one of the hot markets in the country.”

Snapshot: Utah’s Tech Industry

  • Utah tech startups raised nearly $700 million in 2015, shy of the $800 million raised in 2014, according to PwC’s MoneyTree Report.
  • The Milken Institute ranked Utah No. 5 overall in its State Technology and Science Index and No. 1 in its Technology Concentration and Dynamism Composite index.
  • NerdWallet calls Utah the country’s most entrepreneurial state.
  • Forbes ranks the Salt Lake area as one of the country’s best cities for tech jobs.

Utah’s tech companies:

  • 7,000 companies
  • 8.6% of Utah’s workforce
  • $6.9 billion payroll