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Old 03-08-2009, 04:13 PM
 
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For the past couple of years, various organizations, such as the Vermont Software Developers Alliance, the Vermont Department of Economic Development, and the City of Burlington Community and Economic Development Office, have been attempting to promote Vermont as a great career destination for software professionals. As a degreed software engineer who has lived in Vermont for the past 20 years, I am writing this post to tell others the truth about the software industry in Vermont. I am writing for other software engineers, partially to inform them and partially to organize my own thoughts and data in order to answer the inevitable question from employers outside of Vermont as to why I wish to relocate.

First, here is some of my background. When I came to Vermont from Massachusetts in 1989, I had about 12 years of experience as a senior electronics technician and developer of embedded code for the semiconductor industry. I came to pursue a relationship. By the time the relationship fizzled in 1990, the Massachusetts tech economy had crashed and I had started a new relationship, so I decided to make a go of it in the central Vermont area. I had my sights set on the DEC plant in Williston, but within six months, that facility closed. What followed were several years of doing odd jobs in Vermont and a little contract work for companies in Massachusetts. It wasn’t until February 1996 that I finally landed my first full-time Vermont software engineering job. The company was a successful ISV with about six developers. Despite the fact that I had years of experience, my starting salary was only $37,000. However, within two and a half years, I was the lead developer in the house and my salary had increased to $54,000 (whoopee!). However, by that time I had a young daughter to support and the dot-com craze was in full effect, so I left to start a consulting company. The company succeeded for two years by pulling-in work from out-of-state, mostly complex database work for web back-ends. However, during the dot-com bust, work decreased to zero and did not pick-up substantially again until 2006, two full years after the bust had ended elsewhere.

Since I am a consultant, I am very familiar with Vermont software companies. It's my business to be. The official line from state economic development and the vtSDA is that there 350 software companies in Vermont. Quite frankly, that statistic is laughable. The majority of these are just paper companies with no revenue and no employees. Trade name registration in Vermont is extremely simple, costs $50 and the lasts for five years. The bulk of the rest of these “companies” are just sole-proprietorships who dabble with PhP or Microsoft Access. The number of real companies who derive a substantial proportion of revenue from software and have actual W-2 employees is probably less than 40, and is certainly less than 60.
The federal Bureau of Labor Statistics (BLS) estimated in 2006 that there were no more than 830 software professionals in the entire state of Vermont. This figure includes the three BLS labor groupings of “Computer Programmers,” “Computer Scientists and Database Administrators” and “Computer Software Engineers.” It excludes the groupings “Computer Support Specialists and System Administrators” and “Computer Systems Analysts.” The latter groupings are not strictly software groupings, and are certainly not software engineering. Hence, taking the conservative estimate of 60 companies, we see that the average software company has about 13 to 14 software professionals.

The problem with this analysis is two companies employ the bulk of the software professionals in Vermont. These are the IBM Micro-electronics Division facility in Essex Junction and GE Healthcare (formerly IDX) in South Burlington. These two companies, along with the state of Vermont (which pays very low wages), employ probably three quarters of the software engineers. That leaves about 200 other engineers spread over 40 to 60 companies. So the average number of software professionals per software company, excluding GE Healthcare and IBM, is in the range of three to five.

You are beginning to the picture. Outside of IBM and GE Healthcare, a “large” software shop in Vermont employs no more than a dozen or so developers. If you assumed that those dozen would have completed formal training in computer science or software engineering, unfortunately, you would be wrong. Again, excluding GE Healthcare and IBM, it is generally only the principals in a software company that have a BS or higher in computer science. About half of the individuals who have the title software developer or software engineer have only on-the-job training. About a third have a two-year degree in a computer related field or a four-year “technology” degree. By technology degree, I am referring to a program that teaches a current industry skill set, but virtually no theoretical or mathematical underpinnings. One local graduate of such program I interviewed recently could not give an appropriate definition of “algorithm” and could not correctly add two binary numbers (though he made several attempts).

On the subject of wages, most people from outside of Vermont would be very surprised to learn how low software engineering wages in Vermont typically are. For example, salary.com reports that the median base wage for the BLS-defined Software Engineer IV occupational category in the Boston metro area is $114,200. (Software Engineer IV is about the minimum qualification level in most companies nationally for a “senior” software development engineer). This is a bit on the high side but probably pretty close. The site reports that the same job in Burlington, Vermont pays $100,900. If you saw this significant discount for working in Burlington you might assume that the figure, though disappointing, was probably pretty accurate. Again, you would be wrong. Virtually no one in Vermont, no matter how much education or experience he or she has, makes more than about $85,000 doing software (excluding, possibly, at IBM). In fact, the median wage for what is considered a “senior” software developer is closer to $72,000. Bonuses? Forget about them. You might get a gift basket for the holidays, but otherwise, what you see is what you get.

To a large degree, the low quality of the software engineering labor pool and low wages are mutually reinforcing conditions. Wages are low and living expenses are high, so quality engineers do not come here. On the other hand, because the quality of the labor pool is low, employers adjust their expectations of who they can hire. When a high quality candidate comes along, they don’t understand his or her value. They don’t understand how to use such a person or how to compensate them.

A related problem is that most Vermont software companies are woefully undercapitalized. This situation, along with the low quality of the labor pool, makes companies extremely risk adverse in their hiring practices. The way this problem unfolds is as follows: Because software teams have little formal training and are undercapitalized from the start, projects begin without a robust architectural design or formal development process. As products develop, new features are added using the stovepipe design pattern. Documentation is often minimal. Therefore, hiring managers know that their candidates will face an inordinately long ramp-up period. One development manager told me last year that he plans for an 18 month training period before he can assess the productively of new hires. Hence, hiring decisions are made more on the basis of perceived loyalty and narrow skill set rather than creativity, broad knowledge, and general analytical and problem solving ability. For those familiar with economic theory, from a labor market efficiency perspective, these conditions have the tendency to decrease labor market liquidity (churn), which further decreases productivity.

A third problem has to with lack of an intellectual center or anchor company in the Vermont software industry. The University of Vermont, of which I am an alumnus, has a promising, though relatively new, Computer Science PhD program. The university administration would like UVM to be an engine of economic growth for the state. However, the reality is that UVM is mostly disconnected from the economic life of Vermont. It is a state land-grant institution, but it derives the lowest proportion of its budget from state funding of any school in the country. Moreover, only about one third of its undergrad population comes from Vermont. The proportion is closer to half in the engineering college, but the majority of in-state CS students and virtually all out-of-state students, leave after graduation. The same is true of CS grad students: virtually all leave Vermont after graduation.

As for anchor companies, the IBM chip plant once served that function. However, since IBM decided in 2002 not to upgrade Burlington to a 300mm fab, the facility has been on a slow downward slide. Though it is still the state’s largest employer, lack of investment and brain drain are pushing the plant closer and closer toward “zombie” status. The other potential anchor candidate is GE Healthcare. Here again we have disappointment. Since UK-based GE Healthcare bought Vermont homegrown IDX in 2005 for $1.2 billion, it has turned inward and has shown little interest in serving as a hub for a Vermont software industry. GE Healthcare does not display any particular interest in recruiting in Vermont, and has no internship program with UVM (though it does sometimes allow a local .Net developer group to use its conference room).
Finally, the technology infrastructure in Vermont is abysmal. There is only one fiber backbone in the entire state and business grade broadband is extremely expensive. There is no 3G wireless capability. The iPhone was not even available here until two months ago.

In sum, if you are a typical degreed software engineer thinking of taking a job in Vermont, here is what you can expect. Your title may move up a notch or two but your pay grade will move down several notches, probably to around what you would consider to be entry level in Seattle or Boston. On the other hand, you will not be asked to work more than 40 hours per week. You will most likely be working with folks who have less training and discipline than you. The code base you inherit will look to you somewhere between messy and frightening. If the gig does not work out for any reason, you will be out of work for six months to a year, unless you’re willing to move somewhere else. You’ll find that housing is expensive and in extremely short supply. The housing downturn has not really hit Vermont, and especially not Burlington. On a positive note, commutes are generally short and traffic is virtually nonexistent.

To be fair, there are some great reasons to move to Vermont. Having roots here, obviously, is one. If you are a solo shop that can pay extra for broadband and has a steady telecommute salary or out-of-state revenue stream, Vermont is an awesome place is live, especially in the summer.


Last edited by jobhunterinvt; 03-08-2009 at 04:17 PM.. Reason: formatting
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Old 03-08-2009, 06:33 PM
 
894 posts, read 1,286,876 times
Reputation: 259
Nice post. Nobody wants to hear it though. VT is all about denial and happy thoughts, besides who needs money when you are making a lifestyle choice.
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Old 03-09-2009, 05:55 PM
 
6,764 posts, read 19,756,446 times
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Smartest thing to do is get a job, make your market and move to a bigger market...you know, like doctors and anchormen do?

Work in places like VT then go to the big city, NY or Boston and make real money.

Someday someone will wake up in Vermont...(hello lawmakers this means you!). They will also realize offering people $10 an hour and expecting them to work like mules isn't going to last forever. (not if we 'infiltrators and out of state upstarts stay here long enough, that is).
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Old 03-10-2009, 01:01 AM
 
1,083 posts, read 1,928,278 times
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I left Bellows Falls in 1994 and have yet to look back. I'm armed with nothing but a high school education and am doing quite well here in North Carolina. Yeah, the traffic sucks, but hey, you can't have it all. Beats working at McDonalds for $8 an hour.
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Old 03-10-2009, 04:13 AM
 
6,764 posts, read 19,756,446 times
Reputation: 4688
One of my neighbors moved up here from TX. She is an educated scientist...worked in VT for 2 years, traveled from Quechee to Royalton every day...just a long work day.

Moved back to TX in May. I guess she realized she was wasting her time up here (she has a PHD or whatever scientists have as "Doctorates"). Anyhow, I also know the weather was a factor. (She was worn out after 2 years with the snow and cold).

Nice lady...did her 2 years...left with some experience. I bet she's doing fine now and making good money.
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Old 03-10-2009, 09:31 AM
 
Location: Apex, NC
1,341 posts, read 5,640,929 times
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From 1997 to 2002 I was a reasonably successful self employed web / intranet development consultant in Vermont but - other than some pro bono projects - I had no Vermont clients. My clients were based in Virginia, New York, Illinois, North Carolina, Florida, California, Colorado, etc. Back then, I considered employment with marketing firms in Vermont but the salary offers were lower than my consulting income and it was obvious I'd never be on a partnership track. I.T. people in Vermont back then were not Executive potential, and were/are usually hidden away in tiny offices, despite the increased level of importance they represent to virtually every industry.

We moved to the Roanoke, Virginia area in 2004. By then, I had transitioned out of consulting and was focused on my own dotcom business venture, which was already dwarfing my prior consulting income. If Vermont was serious about building up its software development / I.T. industry then it would be creating "small business enterprise zones" and offering significant tax incentives to technology employers. It's a major showstopper for me. I'd never move my business to Vermont, the increased tax burden is simply not justifiable. I don't mind paying taxes, and I think Vermont offers a high quality of living, but if you can increase profit margin by 10-20% simply by moving operations to a different state, then leaving Vermont and taking your business with you is not a difficult decision to make.

Sean
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Old 03-10-2009, 09:43 AM
 
Location: hinesburg, vt
1,574 posts, read 4,420,673 times
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Interesting to read testimonials by folks experienced in a specific field. The saddest part is that the state refuses to create real incentives to promote and cultivate business opportunity as we are perpetually stuck in a mode of repetitive themes which to anyone who has been here awhile knows by heart.
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Old 03-10-2009, 10:13 AM
 
Location: Winter Springs, FL
1,789 posts, read 4,064,950 times
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Many Fields are experiencing the same issues. I work at FAHC and the pay in my department many would consider good for Vermont, but it's much lower than most of New England. We are now in a vicious cycle. The pay is not great so people leave which then creates bigger work loads that many can't handle(frustration) and they end up leaving. I believe at one point we had nineteen vacancies in a department of about fifty.
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Old 03-10-2009, 01:35 PM
 
894 posts, read 1,286,876 times
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Quote:
Originally Posted by flu189 View Post
Interesting to read testimonials by folks experienced in a specific field. The saddest part is that the state refuses to create real incentives to promote and cultivate business opportunity as we are perpetually stuck in a mode of repetitive themes which to anyone who has been here awhile knows by heart.
VT thinks they are creating incentives. There are dozens of state employees working in micro-business development offices and other similar titles. Plus VT spends lots of money telling the world how great it is. Silly. I don't believe that those in charge in VT want ANY economic activity. All ya gotta do is lower taxes and get the hell out of the way and someone, not the gov't it's never the gov't, will build it. Good luck on VT getting out of anyone's way.
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Old 03-10-2009, 03:58 PM
 
214 posts, read 921,426 times
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I used to work for IBM as a software engineer in Burlington for a year. Although I stayed at IBM, I packed up and moved to Fishkill mostly because it was a commuter train ride away from New York City. I have since left IBM and joined a small tech company in NYC.

I was a fresh graduate with a master's degree in Computer Science and the job at IBM was my first after graduate school. It paid pretty well for a first time job in VT, but certainly nothing compared to what a similarly positioned engineer would have earned with the same credentials in Silicon Valley or New York City. I was drawn to the laid-back lifestyle and cheaper cost of living compared to where my other friends went.

But I soon realized that as a technology professional, it was difficult to network in my field outside of people at IBM. You couldn't just go to an after hours conference or party of other tech people in the area simply because there weren't too many. I noticed also that a lot of the younger people never stayed for too long because of a lack of opportunities elsewhere in the state. Also as a place to live, I just felt so isolated in Burlington and found myself in NYC, Boston, or Philly every single weekend I could get away.

I don't believe that the solution lies with giving incentives to big businesses such as IBM or GE. I think the state should give more incentives for smaller technology companies to start up in the area. It's these small companies which create jobs and are generally more daring in trying new things. These smaller companies should also tie up with UVM, Middlebury, and all the other colleges in the state to give incentives to engineering and science graduates who commit to staying 2 or 3 years post-graduation at these companies.

I think it will be important to grow the community of professionals and not just have isolated islands of tech professionals. Not everyone can work for IBM and not everyone likes to work for IBM. Once people decide they want to explore other opportunities outside IBM or GE, there's really no choice but to leave for places with more opportunities in technology such as Silicon Valley, Boston or New York.
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