Shortage of programmers and engineers will push up wages

Economist Mathijs Bouman thinks programmers and otherwise talented folk will push up the average wage.

The Netherlands has two million unemployed, many more than the official tally of 600,000, according to a recent report from the Dutch central bank. It’s a labour surplus which will put any thoughts of big pay increases a long way into the future, even if the economy is showing signs of recovery, the bank opined.

Really? The bank seems to be awfully sure of itself. Perhaps it was wrong to include all those who said they want to work more hours, even if they worked full time. At the same time half a million people who said they wanted to work fewer hours were ignored. Why? And why would the lack of trained welders or IT experts or otherwise talented folk not lead to a higher average wage?

An email from the Intelligence Group

If you really want to know about wage pressure it would be advisable to find out how difficult it is for companies to recruit the right staff. You might think: well, what are you waiting for! But it’s not as easy as you think. Reliable data on the lack of skilled workers are hard to come by. We know these people are needed but where? Then labour market researchers Intelligence Group sent me an email. They had some figures that might interest me.

What they had was the result of their annual survey in which they asked 16,000 workers if they had been approached by head hunters or other potential employers to apply for a job in the last year and if so, how often. The whole thing was measured against the whole of the working population in the Netherlands in order to come up with a representative result.

Based on this survey I conclude that labour market shortages are increasing and for some professions things are looking quite desperate.

A headhunter calls

Of course not everyone gets regular phone calls from a head hunter. Over 60% of the respondents were not called at all in 2015. But 39% were asked to consider a different job at least once. 21% were asked more than once in a quarter and 8% asked several times a month. 2% were positively badgered, with requests to come aboard at least once a week by a head hunter or employer.

In 2014, 36% of Dutch workers were propositioned at least once by someone other than their present employer. In the year before that is was 32%. And in 2012 only 29% were asked to desert their present job. The number of workers who have had temptation put in their way has risen four years in a row. It’s a clear sign of an increasing labour market shortage.

LinkedIn off line

Those who are being approached on a weekly basis are the most relevant for the upward wage trend. Who are the ones that are being stalked most relentlessly? Exactly: it’s programmers.

Smart industry is up and coming and it’s not just ICT companies who are looking for programmers, it’s pretty much everyone else as well. 38% of programmers are approached with a job offer more than once a week. Some have taken their LinkedIn account off line because of it. Engineers and technical staff account for 32%. System developers come in third. In fourth place we find… economists, although I have a suspicion that we are talking econometricians rather than your run-of- the-mill macro-economists.

These are the shortages which will be pushing up the average wage, regardless of those employed in other sectors who may or may not want to work an extra couple of hours.

This article was published earlier in the Financieele Dagblad

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