Tackling the IT Talent Crunch

By Eileen Colkin Cuneo  |  Posted 09-15-2008

Tackling the IT Talent Crunch

It's an increasingly common headache felt by executives in IT organizations nationwide: IT jobs need to be done, plenty of IT workers are looking for jobs, but the skills are not matching up.

Indeed, attracting and retaining skilled labor was the No. 1 concern of CIOs last year, according to an annual survey conducted by the Society for Information Management. In this year's soon-to-be-released survey, SIM split attracting from retaining employees into separate items, so both experienced slippage in the ranking of top IT management concerns. Still, both remained as top 10 concerns, with attracting to IT pros falling to No. 4 and retaining IT professionals dropping to No. 8. Yet, the survey's author contends the combination of the two might have challenged this year's No. 1 concern, IT and business alignment, if they would have remained as one item.

Strategies for managing the talent gap, however, are plentiful. While some organizations increase offshoring and outsourcing, others train and improve the quality of life for their existing employees to reduce turnover. Still, others resort to canceling or postponing projects until the talent can be found to execute the plan. In the end, most companies employ a hybrid version of all these strategies.

Whatever the means, the issue will remain a top priority as the hiring landscape for IT workers continues to leave employers with empty chairs: Baby boomers are expected to retire over the next 10 years, and young people are not pursuing careers in technology, leaving a talent gap that will undoubtedly cause CIOs problems for the next decade and beyond.

Yet there are lessons to be learned from industry leaders who are taking action now to address the challenges of finding the right hire today and a setting up a fully staffed IT department for the future.

The first step is getting the best applicants to come in for the job by offering the fundamentals in job postings. A competitive salary is a given, but equally attractive to talented workers is training, presenting opportunities to develop professionally and a good work-life balance.

Outsourcing eases the pain for most companies. Shops like Robert Half Technology provide skilled talent on an as-needed basis, and if a specific skill set is needed, the staffing firm will train its consultants to do the job for its client without charge, says Jenifer Mauney, a vice president with Robert Half. Businesses either use company consultants to develop a new project or to man the maintenance positions while the permanent staff works on the new project. Right now, demand is hot for skills like Web 2.0, business intelligence, data warehousing and virtualization, so Robert Half is continually training staff in those areas to meet the industry's needs.

Technical vs. Behavioral Skills

Whether from a staffing firm or straight out of college, there are some capabilities that workers will either have or will never learn. "Technical skills are important, but 80 percent of what our clients are looking for is behavioral," Mauney says.

Clients want staff that not only have experience in their specific vertical industry, but who can interact well with their team. To that end, Robert Half provides its consultants with business and technical training. Many clients hire the consultant permanently if the relationship is working, and Robert Half is happy to see the match cemented. Mauney encourages all her clients to continue training their staffs as part of an overall retention strategy.

With good reason. More than salary, soft benefits like training make workers stay in the job they have, according to a report issued in August by research firm Computer Economics Research. A CER survey of 71 U.S. IT organizations found that training and other non-economic factors such as flexible scheduling, paid time off and social environment have a stronger correlation with lower turnover than factors such as base salaries, retirement and savings programs and incentive pay. Though important, salaries aren't everything. "If they're just looking for the best pay, they'll go on to the next company that pays better when they get the opportunity," says CER Research Director John Longwell. Perks like a four-day work week or two days a week of telecommuting might be harder to give up.

Reducing the churn rate is imperative as businesses are about to lose a large portion of their workforce not to other companies, but to retirement. By 2016, 70 million people are expected to exit the workforce, while only 40 million will enter. Technology is expected to be one of the harder-hit sectors, as not only will the jobs be vacated, but many new jobs in areas like software development and networking will be created during the next 10 years, according to the U.S. Labor Department's Bureau of Labor Statistics.

It's not just the pending retirement exodus that has today's IT leaders nervous for the future of the systems they're investing in today. Since 1998, there's been nearly a 50 percent decline in the number of students choosing a major in computer science at Ph.D.-granting colleges and universities, according to the Computing Research Association, an association of computer science academic departments and related organizations. A painful combination--the dot-com bust in the late 1990s, the post-9/11 tightening of visas for foreign students (who often assimilated into the U.S. workforce after graduation) and the perception that domestic IT jobs are unreliable in an offshore-happy environment--has created an anti-technology sentiment among college students in the last decade. The trend is only beginning to show signs of reversing, but not by much. In 2007, only 75 more students chose a computer science major than in 2006.

Here's a look at how four IT managers are handling the talent crunch:

ACH Food Cos.

National Institutes of Health

Ingenuity Associates

Bank of New York Mellon  

ACH Food Cos.

John Oglesby is forever on the lookout for new talent. As director of IT strategy at ACH Food Cos.--the maker of Mazola corn oil, Karo corn syrup and Argo corn starch--Oglesby needs experts in SAP technicality and functionality to come on board permanently to help install, and later maintain, his company's new ERP system.

That shouldn't be too hard, given the down economy and the complaints from the field of IT workers that there aren't enough jobs. Yet Oglesby has struggled to fill spots on his team, even holding a position open for more than five months while he searched for the right person. Well into the implementation, Oglesby believes or hopes he may have finally found someone who fits the position.

Certainly, Oglesby fields dozens of resumes for every job he posts, but few applicants are even worth calling in for an interview. First, about 85 percent of the resumes are from foreigners, half of whom come with the added burden of needing sponsorship. Many struggle to speak English. Second, many of the resumes are fabricated to embellish experience. Applicants are often eager to tout others' accomplishments as their own--like the applicant who claimed experience in creating special user exits, when in fact he was only part of a team that had done so and was never personally involved in the task. "When we talk to the candidate, it's obvious they know nothing about it," Oglesby says.

When a candidate comes to the table with SAP experience, it's often siloed in a specific area, like order management, rather than the expertise Oglesby needs in areas such as invoicing or cash applications. ACH uses recruiters, but they often don't know much about SAP either and are poorly positioned to screen candidates. In the end, most of the hiring process is composed of time-consuming tasks like weeding out resumes and phone screening before he can finally bring a promising candidate in for an interview, and eventually make the hire.

Oglesby, as a leader of the Society of Information Management's effort to increase the future labor pool, launched a Teen Tech Camp in ACH's hometown of Memphis to recruit kids as young as high school age into the IT field before they choose their college or major. His biggest concern: The decline in technologists entering the workforce in the past decade means that somewhere down the line there will be a shortage of experienced technologists able to serve as leaders and executives.

What's more, businesses still rely on legacy technologies that are not yet obsolete, but are no longer being taught in schools. Baby boomers know the technical details inside of IT, but languages like Cobol and Fortran that are still in use are unknown by the younger workforce. "At some point, companies may face catastrophic system failures with little ability to deal with it, unless they wholesale replace their older systems with newer technology," Oglesby says.

While companies may do some replacements, the problem is too costly and has low visibility, so such projects are easily pushed to the back burner. "We don't pay any attention to the 10-cent ball bearing that keeps a wheel turning until it fails," Oglesby says. "Then, where do we find that ball bearing and the person who knows how to replace it?"

National Institutes of Health

Robert Rosen knows all too well the importance of the latter issues. As CIO of the National Institute for Arthritis and Musculoskeletal and Skin Diseases within the National Institute for Health, a branch of the U.S. Department of Health and Human Services, he isn't able to compete with private industry on salary. Instead, he has to sell other benefits of working for his government agency.

Chief among Rosen's recruiting bait is the innovative working environment. His employees work on the cutting edge of scientific research, so they will be exposed to new technology sooner than in private industry. And because the institute uses outside contractors for its development work, internal positions generally give to employees management-level responsibilities that they would not be able to get in the business world. Rosen also sees alternate work schedules and telecommuting as perks that attract applicants, yet don't cost a lot of money. Companies that can't offer cutting-edge assignments like Rosen's can compete for talent by emphasizing those extra benefits and paying more.

Time and again, Rosen sorts through stacks of resumes replete with misspellings and grammatical errors, and he often finds only unqualified applicants who lack the technical ability, project-management experience or the people skills he needs. However, Rosen admits that sometimes he's asking a lot of the labor pool. One position for a liaison between the lab research team and the IT team, which requires lab processing skills and IT capabilities, remains unfilled after more than two years. "In some sense," he says, "I think we're trying to hire someone who doesn't exist."

That's a big part of the problem created by the IT industry. To answer the demands of businesses trying to keep the bottom line in shareholder-friendly territory, CIOs have lost the ability to hire people with fundamental skills who can grow into a job if given the opportunity and a little time. "Let's look at how all our careers got started," Rosen says. "We didn't know .Net or Java, but we had the ability to learn and companies were willing to train us. Today, we're impatient, and we want hires to hit the ground running."

Ingenuity Associates

Brian Prentice, senior partner at Ingenuity Associates, a management consulting firm that provides strategic planning in areas like technology integration, risk and compliance, and enterprise application, says staffing firms sometimes add to the frustration. Far too often, he's seen staffing firms that don't understand the technology itself.

One of his clients seeking an information technology infrastructure library, or ITIL, process engineer turned to a staffing firm that struggled to understand what ITIL was. When they presented the "right person" for the job, it was a technician who had ITIL on his resume, not a process engineer. "It's pretty hard to fill a position when the staffing firm doesn't comprehend the client's need," Prentice says. Usually the manager ends up pushing his own people to work harder and longer hours to cover the void, with no extra pay.

Ingenuity Associates' Prentice believes mentoring programs and open lines of communication are critical to keeping quality workers connected to the organization. All employees must understand the overall business strategy and how their individual position fits into the picture. Tight, communicative relationships with management, meanwhile, allow management to act proactively when an employee is unhappy.

And Prentice practices what he preaches. One of his consultants--someone to whom he had served as a mentor--recently expressed frustration at being underutilized by his assigned client. Rather than pull him from the assignment, Prentice offered him the chance to develop an organization-assessment tool for the firm's information-security practice and technical-architecture practice as a side project. "These are things he is passionate about," Prentice says. "Now, he is excited that we've asked him to do something that gives him a leadership role in the organization."

Bank of New York Mellon

Christine O'Brien, senior vice president and IT chief administrative officer at Bank of New York Mellon, sees her IT organization of 4,500 employees aging and is not going to let them retire without a plan to replenish the workforce with employees well-trained on the traditional and reliable systems that keep it in business.

The firm this year launched an aggressive entry-level talent-acquisition program that will recruit 40 new college graduates with computer science and other related degrees--such as mathematics--to work in BNY Mellon's IT shop. For nine months, the recruits will shadow existing employees in an intensive study of the technologies created and managed by the departing baby-boomer workforce: computer operations and the IBM mainframe infrastructure. "Mainframes haven't gone away the way people thought they would," O'Brien says. "We anticipate that they're going to be a part of our organization for a while, and we need to develop the skills sets around that."

A handful of recruits, meanwhile, will be placed in a leadership-development program, a two-year training process that rotates the employee through different technical positions across the business lines, so at the end, BNY Mellon will have IT employees with close working knowledge of the technology and the business across the organization in functions as diverse as technology development, project management and business analysis.

Recruiting alone is not enough. Retention of existing employees will be imperative for weathering any future labor crunch. Recognition programs that reward daily accomplishments with gift cards and larger victories with paid time off and cash rewards are part of the plan. Internal networking events and a formal mentoring program that give employees opportunities to learn about career advancement within the organization have been overwhelmingly positive.

With such a large staff, O'Brien needs to be sure managers understand the intellectual capital available within the workforce, and the staff needs to see where they fit in the overall organization. She recently created a "job-slotting" process, which lays out for all staff members the exact requirements and responsibilities of their own job as well as all the other positions in the organization. Simultaneously, an internal certification program gives the employee and manager a tool to gauge their capabilities and skills. "If I'm a business analyst and I'd like to be a project manager, I can now see what skill requirements I need to meet and the path I need to take to get to the job I want," O'Brien says.

BNY Mellon has just started the recruitment and retention crusade aimed at warding off the seemingly inevitable labor shortage. In the near future, the firm will be looking at ways to retain retirees either in part-time or home-office positions to ensure there are knowledgeable employees available to protect and maintain existing IT systems.

Meanwhile, reaching out to new avenues of hiring will help fill the vacant slots in the workforce. These new avenues include inner-city career-development programs, hiring people with disabilities who are having trouble entering the work force, and further training existing employees and new graduates.

It's a developing process. "But if we don't start acting proactively before the shrinkage takes place," O'Brien says, "we're going to have a problem."

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