Surveying the IT Staffing Crisis

Many people in the IT community have long said there?s no IT staffing ?crisis? at all?only skills and management issues that show no signs of going away, despite the recent glut of layoffs. Norman Matloff, a computer science professor at the University of California, Davis, who has been dubbed the ?Scourge of Silicon Valley,? insists there’s plenty of evidence that the crisis is nothing more than companies practicing widespread age discrimination and looking for cheap labor. And Peter Cappelli, a management professor at the University of Pennsylvania?s Wharton School, said in a paper published last autumn that if there is a staffing crisis it has more to do with management issues. But the Information Technology Association of America (ITAA) in April 2000 released a study that put the number of unfilled IT jobs at 850,000. [The ITAA cut that number in half in an updated study conducted after this roundtable met. However, the organization noted that this year employers will still attempt to fill more than 900,000 new IT jobs, and many CIOs report that finding IT talent is as difficult as it ever was.]

What gives? Is there a staffing crisis, a skills crisis or a management crisis? In fact, is there a crisis at all?

To try to make sense of this, we brought Matloff, Cappelli and ITAA President Harris Miller together with two CIOs: Rob Collins of the software company Cognos based in Ottawa and Justin Yaros of Sony Pictures Entertainment in Culver City, Calif. With the help of moderator David Foote from Foote Partners, a New Canaan, Conn.-based research and advisory company that tracks, analyzes and reports on IT and business workforce management practices, we gave the group the ambitious goal of defining the IT staffing crisis and offering suggestions on how to overcome it.

David Foote, moderator: Crisis is a strong word. It usually connotes a state of emergency. Where is the state of emergency that you?re feeling right now?

Rob Collins, CIO of Cognos: To me a crisis would be a situation whereby we could not deliver the services that our user community needs. We?re certainly not in that state. My biggest challenge is retaining expertise?keeping people who have been here in the 18-month to three-year range.

Justin Yaros, CIO of Sony Pictures Entertainment: The crisis, if you want to call it that, is that it?s perfectly OK to stay in a position for one or two years and then make your fortune somewhere else. With that perception as pervasive as it is, it?s very difficult to build stability within an organization.

[But have things] changed because of a shortage of real talent, or because of a perceived need to have the best resource you could find for a particular job? An unfortunate side effect is salary escalation. People are coming in with much greater expectations and are, in some ways, pricing themselves and others out of the market.

Foote: What I hear is that the missing skills are not so much the technical skills, they?re all the other skills: functional area skills, business skills, something as simple as communication skills.

Harris Miller, ITAA president: We did a survey in April [2000] of 700-plus hiring managers, and 62 percent said that a good knowledge base in relevant areas was the single most important high-level qualification. So clearly the hiring manager is saying that while they?re obviously looking for technical skills, they?re looking for a broader set of skills.

Collins: Getting people with the ability to appreciate the business aspects is one of the keys to helping retain people. What we?ve done here is try to get people more involved with the business goals and measuring themselves by the success of the business units. That not only has created a better relationship there, it?s helped those people understand why they?re doing what they?re doing and make it more likely that they stay.

Foote: What kind of training are you doing to help develop this new sort of broader-based IT employee?

Yaros: One of the things we did leading up to my exit [at Twentieth Century Fox Home Entertainment] was to decentralize the IT organizations as much as possible. I felt that the businesses would take greater responsibility over their charges, and the IT staff would feel much more a part of the business, if they had a clear reporting line into the business [first] and IT second.

Miller: Part of the answer, too, goes back to the educational system, which often has too neatly bifurcated engineers and computer scientists from liberal arts graduates. Part of the challenge in the business community is to communicate to the education and training communities that they need to make sure that these students are well-rounded, and also that when their older workers are going back for retraining, some of the retraining may also include filling in some of their gaps in business or communications or other skills.

Norman Matloff, computer science professor at the University of California, Davis: What Harris [Miller] is describing is going on in one sense, and that is the accreditation boards?for example, for engineering?put a huge stress now on being well-rounded. The problem is that a lot of students who go into engineering do so because they don?t want to be well-rounded. There also aren?t enough internships. I think it ought to be required for every engineering and computer science student to do an internship.

Peter Cappelli, management professor at the Wharton School, University of Pennsylvania: I read of [one major company] that has now decreed that half of all its hires are going to be people who have intern or co-op experience within the company. That?s a great example of companies that are moving in a big way. In the IT world, my gut feeling is that there is less interest in doing this than in other fields. People perhaps wrongly believe that the market is moving so quickly that it might not work as well.

Miller: Norman [Matloff], [in your writings] you seem to minimize the importance or significance of worker retraining, and I wanted to know whether other people agree that workers getting retrained is really that inconsequential.

Matloff: I regard this as a highly central issue. Let?s say you have a programmer who has 15 years? experience but doesn?t know Java, and they go out and take a job course or go into a training program or just learn Java on their own, and then they apply for a job that uses Java. Most employers are not going to accept that training. They want work experience in Java, and I regard that as shortsighted.

Yaros: It depends on what you?re retraining to. It?s certainly less of a jump to go from one object-oriented programming language to another. Frankly, if I knew somebody had object-oriented experience and learned Java but hadn?t used it on the job, I?d be fine with that if that person demonstrated some level of proficiency. It really depends on what the particular skill transition is, but I do find that if a person is good?if they were a good programmer, period?then they can be retrained. It?s often worth the effort.

Matloff: I agree with that. What I?m saying is, if you check with your HR people, you?ll find that that?s not the policy under which they?re operating?that they are rejecting people out of hand who have retrained but don?t have the work experience. This I find is very, very common?that at the CIO level, they?re not very aware of what HR is actually doing.

Collins: I certainly couldn?t agree with that. Because there is such a need to hire staff because of turnover, most people are pretty much in touch with HR. I agree completely with Justin [Yaros]?s assessment of the value of retraining.

Foote: I want to ask the group about HR being outsourced to the line managers. HR counters that the line managers don?t really have the qualifications to act as HR representatives when it comes to recruiting and retention. This is the crux of one of the allegations?that there really is a dearth of good management.

Collins: There has to be a partnership between the IT group and the HR department, just as I want my IT guys out there being partners of our business units. I sit down with our HR group on a quarterly basis and review not only hiring but retention.

Yaros: I agree, but would add that retention and minimizing turnover is a very multifaceted issue, and it goes much further than the partnership between IT and HR. In my experience the turnover is contained through many other factors such as the overall culture and vision of the company, the vision of the CIO, the leadership by managers, the growth opportunities and so forth.

Foote: There?s been a lot of debate about this retention issue, and there?s been a lot of finger pointing. What can companies be doing in terms of this balance of HR to line management to senior management in order to get a handle on retention? Why is there rarely ever a comprehensive staffing plan or comprehensive retention plan?

Cappelli: I think there is a boundary between human resources and particularly IT people, and I think the boundary in many organizations is that IT is in some ways different or special or unique or pejoratively weird. As a result, there?s a lot that good human resources people know about retaining people [that] doesn?t penetrate into the IT world quite as deeply as it ought to.

Foote: I?m sort of hearing an undercurrent of what might be discrimination. There?s such a thing as good turnover and bad turnover, and it?s a popular conversation right now off-the-record?that is, we?d like to have more of these kind of workers, and we?d actually like to get rid of half of these kinds of workers only labor laws constrain us from doing this. So they?re coming up with creative ways of transitioning the workforce. Can we talk about that issue of transitioning this workforce to this more business-oriented or multidisciplined individual?

Matloff: Most employers don?t like to fire anybody any more, but if they have people that are not working out, they accumulate a bunch of them and then do a layoff. So some of that layoff is to get rid of what is literally deadwood, but in a lot of other cases, a large part of that layoff is people who have become too expensive.

Yaros: I certainly agree with the first instance: The practice, at least in my experience, is fairly widespread that there are layoffs simply to remove the deadwood. I?ve never witnessed layoffs to relieve the higher salaries in the organization. That?s just something that we suck up. The main imperative that I face, and that I want my managers to deal with, is to recognize who is a talented person for the organization. That?s one of the more difficult things to be able to discern. Somebody who is a so-called A Player in a certain type of job may not be an A Player in a different kind of job, and there needs to be some time spent on identifying the strengths of that individual to determine whether or not they?re a solid individual in the wrong assignment.

Foote: Let me just take it back to this issue of management and retention. What kind of constraints do the two CIOs in this group feel? Are we talking about a finite number of workers? A finite number of dollars spent? Are we moving to a flatter, more flexible organizational model, and are there rules getting in the way?

Yaros: Does IT really need to be looked at and viewed any differently than anything else in the company? Whether it does or doesn?t need to, historically it has been. Only a greater degree of merging with the businesses will erase this separate culture. So I think that there aren?t so much organizational constraints as much as this is still a profession that is not yet mature. As we continue to progress further along that curve, we will find that some of these issues regarding separate cultures and how to retain an IT person versus somebody else will tend to diminish.

Collins: I certainly agree it?s evolving. I think some companies fall in love with their organizational structures and are reluctant to change them. We try to take the view that organizational structure is in place to do the job that we have in hand today, and just as the company will move and adapt to changes in the market, you can expect that the IT organization will move and adapt along with it.

Miller: If you look at companies who have been the most effective at contributing solutions to the problem, almost all of them have people in management positions whose responsibility it is to grow the IT workforce, as opposed to recruiting and retaining people. I think CEOs who believe there is an IT workforce shortage and want to do something about it need to put resources separate and apart from the traditional HR function into helping to grow that workforce.

Foote: If you look at the whole issue of managing out of the staffing crisis, the question is, is it a board-level issue and a CEO issue, or an HR and CIO issue?

Miller: When I first came to ITAA in 1995, I traveled around and talked to a lot of CEOs and asked what their top three or four issues were, and virtually none of them mentioned a workforce shortage. I did a similar tour about a year later. All of a sudden it was mentioned by many CEOs, more than a majority. It is an issue, which until the labor market comes more into balance?and I believe it will?has to remain at the top level.

Collins: The conversation [at Cognos] is between myself and the HR department, but to be honest, when you get to a level of salaries starting to revise the financial model, obviously that has to go up further. There has to be the support from the CEO and even the board level, but the management should be kept at CIO and HR level.

Foote: Let?s look out five years. Any predictions?

Collins: Five years is a little too far out to predict. But at some point the technology will improve around the ease of use, and that?s going to back off on the staffing requirements. I?m talking about unsophisticated users being able to self-service their needs rather than having large staff building customized components or customizing package software. I don?t see that, though, in the short term.

Yaros: One of the contributing factors is the pace with which technology has been changing, and the need to know how to use every single tool and package is partly what?s driving this focus on skills. I can?t answer whether or not in five year?s time we will find that this has slowed down. If it has, there will be far less pressure on staffing. If it continues to move along at this pace then I don?t see a reason for assuming that it will significantly abate.