The Entry-Level Employees IT Departments Need

Now that the latest Department of Labor statistics show total IT employment inching back past its peak in 2000, the media is full of happy pronouncements–including CIO. If total employment is higher than it was during the technology boom and before offshore outsourcing really kicked in, all those naysayers that worried about the future of U.S. IT must be nattering nabobs of negativism, right?

In her column in CIO, Maria Klawe, dean of the School of Engineering and Applied Science at Princeton University, calls all the doomsaying “a trap of misperception.”

She couldn’t be more wrong.

A lot has changed since 2000. IT employment has undergone a major structural shift that seems to have eluded Klawe and just about anyone who looks only at the top line of the IT employment numbers. To see the structural shift, check out the category that the DOL calls “computer programmers.” In 2000, 530,730 computer programmers were employed in this country. In November, 2004 (the DOL’s latest data) that number was 396,100–a drop of 25 percent, or 134,630 jobs. “Computer support specialists” (help desk) jobs are down by nearly ten percent, or 30,890. Database analysts are ten percent fewer today, too.

These jobs are gone for good–or for at least as long as the wages in other countries continue to be a fraction of what they are here.

And the real numbers on the structural shift are probably much higher. The DOL does not count independent contractors–who can make up as much as 20 percent of the IT workforce in small and medium sized companies, according to a recent survey by the Society for Information Management.

There’s a pattern here. Some jobs–emphasis on the some–in these categories are what consulting company McKinsey calls transactional work that can be packaged up with a script or performed without much–if any–supervision. That makes the work (even if it quite complex and challenging, like programming) portable and subject to labor arbitrage and automation.

Of course, McKinsey’s categorization is a chilling generalization. Plenty of programming requires intense interaction, problem solving, analysis, innovation and independent decision making. And when entry level help desk workers run out of script to read, they pass the case up the chain to someone on location who is trained to think on his or her feet. These jobs aren’t going anywhere.

These more interactive roles track pretty closely to the categories where the DOL says IT employment has made the biggest gains since 2000: application engineers, systems engineers, and network analysts.

But these jobs are not the foundation of IT today in the U.S. It’s the entry level, rote programming jobs and scripted help desk work that gets kids started in IT. But increasingly, these are not the kinds of jobs that CIOs can justify keeping in-house. In a survey of 82 companies that began earlier this year and is continuing, the Society of Information Management’s team of academic researchers asked which skills IT leaders thought were most important to keep in house today. The top skills were all related to business process or project management. Only two technical skills, systems analysis and systems design, (both far removed from entry level programming) made the top 15. These IT leaders’ projections for their internal needs for 2008 were nearly identical–except business skills got even higher rankings (see the full breakout below).

There is a disturbing gap between the skills these leaders value–and thus are willing to pay to keep inside their organizations–and the expectations they have for entry level skills. When the SIM researchers asked them which skills would be most important in their entry level employees today and in 2008, the vast majority said the college background they wanted was computer science. Of course, the core of most computer science programs in this country is programming–precisely the skill that IT leaders told SIM they don’t value anymore. One of the SIM researchers, Kevin Gallagher, a professor of Management Information Systems at Florida State University’s College of Business, says IT leaders value programming skills because “it’s something they can put people to work on and have them be productive right away.” As the employee shows promise, they begin to learn more of the skills that will make them more valuable over the long term.

But the supply of those jobs is becoming constrained. SIM asked IT leaders which skills they felt might “disappear” by 2008 because they would become completely obsolete, be automated or be outsourced. Top ranked were programming (except for “new” programming skills like Java, .Net, Linux etc.), operations, desktop/help and mainframe/legacy skills.

We have a disconnect here.

Programming is becoming a prerequisite for a job in IT rather than a reliable path into the career. It is necessary, but no longer sufficient, for success. Kids are turning away from computer science not because the media is scaring them or because the IT industry isn’t doing enough marketing of the profession, as Klawe asserts, but because IT has undergone a structural shift and U.S. companies haven’t made structural shifts in their hiring and training practices and U.S. universities haven’t made structural shifts in their curriculums to adapt. America is a land of consumers and American kids don’t like the products being offered by American IT departments and universities today.

At the very least, American computer science departments are going to have to begin offering something else along with programming. The hard skill that is at the core of the university business curriculum–accounting–would be an easy way to start making computer science grads more marketable.

But going much beyond that is going to be difficult. Programming and accounting skills are relatively easy to teach and easy to evaluate in entry level employees. But look at the list of skills that SIM says IT leaders are seeking. Most are what economists call “tacit” skills, those that rely on experience and the ability to interact with others. These are not entry level skills and are difficult to train people for, especially at the college level. Worse, employers don’t have easy ways to evaluate potential employees for those skills, says another SIM researcher, Cynthia Beath, professor emeriti in the department of information, risk and operations management at the University of Texas at Austin’s McCombs School of business. “You can’t evaluate someone’s ability to run a project or manage conflict [in a job interview],” she says. Those skills reveal themselves–or don’t–over the course of months or years. But most importantly, they cannot grow without on-the-job training and experience.

For mid-career IT employees who have found themselves out of a job, the frustration is even greater. The training available to them on the job and in adult ed traditionally has been focused on technical skills. Going back to college–even if it offered the right curriculum–is difficult, if not impossible.

Companies are going to have to focus more on internal training in order to get the employees with the skills they say they want and retain the older employees who will be squeezed by dropping wage rates in the more portable, transaction-type jobs. Though I couldn’t find hard evidence for it, most of the experts I’ve been speaking to about this say the internal route is also cheaper than constantly bringing new people in from the outside and not just teaching about the business and the industry but honing their interaction skills to fit the ways the company operate.

Companies and universities are going to have to begin focusing on training that emphasizes experience rather than curriculum. The combination of business knowledge, communication skills and technical abilities that CIOs are looking for are going to become harder and harder to find unless they begin building them inside–inside their companies and inside the universities where they got their programming degrees.

Some CIOs, according to the SIM researchers are responding by continuing to hold at least some entry level programming jobs open despite the economic logic of moving them all outside, and cooperating with local universities to create internship programs so that college kids can get the necessary business, communication, analytical and problem-solving skills–as well as the industry knowledge–they need to move beyond entry level–before they leave school.

Top skills to keep in house today and the percentage of respondents who cited them, according to SIM’s survey:

Project Management–72 percent

Company Knowledge–70 percent

Functional Area Knowledge–70 percent

Industry Knowledge–67 percent

Project Leadership–66 percent

Systems Analysis–66 percent

BPR–64 percent

Systems Design–64 percent

Project Integration Management–63 percent

Project Risk Management–62 percent

User Relations Management–59 percent

Negotiation–59 percent

Change Management–59 percent

Communication–59 percent

Managing Expectations–57 percent

Managing Third-Party Providers–56 percent

IT Governance–55 percent

In 2008:

Project Management–72 percent

Company Knowledge–71 percent

Functional Area Knowledge–74 percent

Industry Knowledge–69 percent

Project Leadership–67 percent

Systems Analysis–67 (technology skill)

BPR–68 percent

Systems Design–67 percent

Project Integration Management–63 percent

Project Risk Management–62 percent

User Relations Management–60 percent

Negotiation–59 percent

Change Management–60 percent

Communication–59 percent

Managing Expectations–59 percent

Managing Third-Party Providers–57 percent

IT Governance–57 percent