WANTED: Experienced IT professionals with broad technical competency and working knowledge of both emerging technologies and legacy systems. Should have top-notch analytical and problem-solving prowess, excellent communication skills, and the ability to work well independently and as a member of a team. Must have experience in business process management, certification in project management and a solid understanding of enterprise architecture. Customer service attitude required. Vendor management background a plus.
It’s no longer a matter of debate: The nature of IT is evolving from technical support center to innovative business partner. And the mix of skills needed to staff the new IT department is changing as well. While technical proficiency is still important, CIOs are desperately seeking hires with project management expertise, enterprise and industry knowledge, and the business skills necessary for customer-facing roles. Forty-one percent of CIOs said they place greater emphasis today on a job candidate’s knowledge of business fundamentals than they did five years ago, according to a 2006 Robert Half Technology survey.
What is unclear is how CIOs will meet this demand. The supply of business-IT professionals is tight. Enrollment in U.S. computer science and engineering programs has plunged five straight years, down 50 percent from 2000 to 2005, according to the most recent study by the Computing Research Association. CIOs complain that students who do pursue traditional IT programs don’t get adequate exposure to soft skills. Seasoned professionals with that valuable combination of business and technology skills inch nearer to retirement. One-third of U.S. workers will be over the age of 50 by 2010; the first baby boomers reach retirement age in 2011. Skilled midcareer workers, who could fill the gap, risk being ignored or underutilized.
Yet successful IT staffing is more important than ever. “Talent is the differentiator between creating significant business advantage with IT and not,” says Alastair Behenna, CIO of global recruiter Harvey Nash Group.
Staffing pressures are affecting everyone, from smaller businesses to Fortune 500 companies, nonprofits to the public sector, industry to industry. In fact, IT leaders ranked finding, hiring and retaining workers with the needed skill sets among their top staffing concerns, according to CIO‘s “2006 Midyear Staffing Update.”
“We’re all going after the same talent pool,” says Diane Wallace, CIO for the state of Connecticut. “These issues are going to be with us for a while, and there’s no magic bullet coming. CIOs have to solve it for themselves.”
A talent war is brewing, and CIOs cannot wait for the cavalry to ride over the hill with the right recruits. “You’re going to be in trouble if you’re not working to interest kids in IT, to recruit them out of the university, to develop your own employees and retain them,” says GM CIO and group VP Ralph Szygenda.
To win, CIOs must arm themselves by taking significant steps to ease today’s staffing squeeze and lay the groundwork for tomorrow’s growth. Prepare your own battle plan by studying the tactics—some old, some new—employed by forward-looking CIOs.
5 THINGS TO DO TODAY
1) Rethink Hiring Practices
An alarming disconnect exists between what CIOs claim to want in entry-level candidates and the skill sets of those they actually hire. Business capabilities and project management expertise represented eight of the top 10 skills identified as critical to keep in-house, according to a recent survey by the Society for Information Management (SIM). However, the majority of respondents primarily sought technical skills in entry-level recruits.
Why the incongruity? CIOs who have spent years looking for technical proficiency may have trouble adjusting their hiring practices to net candidates with business and IT skills. “This is new territory. We know what to look for in pure IT roles that have comfortable certifications, job titles and descriptions to measure against,” says Harvey Nash’s Behenna. “[These new roles] are still in their infancy.”
Chris Stockley, CIO and VP of $4.2 billion building contractor Skanska, wants employees with a customer service mind-set who excel at communication and collaboration. “Technical proficiency is something we look for,” he says, “but it’s the last criteria we care about.”
Stockley uses various tactics to tease out business skills in candidates after their initial HR screening and interview. For instance, all potential hires must give a presentation about anything…except IT or the construction industry. “The content is irrelevant. I’ve seen presentations on everything from how to bake chocolate chip cookies to how to shoot pool,” says Stockley. “The issue is how they communicate and [how they] handle a stressful situation.”
A handful of IT employees, the hiring manager and one of a rotating group of senior executives sit in on the presentations. Candidates could find themselves explaining how to fold a napkin to the CEO. It’s not a pass-fail assignment; one of Stockley’s best directors of customer service bombed her first time out. She won the position by asking for another shot and turning her performance around.
“You may uncover some not-so-positive characteristics. It doesn’t mean you don’t hire someone, but you know the areas of potential concern. You’ve had a positive conversation about improving their skills before they’re even an employee,” he says.
Stockley then puts job candidates through a simulated customer service exercise. A potential member of the infrastructure team may have to communicate a technical issue to a businessperson face-to-face. “We look at how well they settle down the customer. Or how well they provide a nontechnical description of a technical issue,” says Stockley. “We put everyone through it.”
2) Collaborate with HR and Recruiters
CIOs tend to be do-it-yourselfers, says Katherine Spencer Lee, executive director of Robert Half Technology. That can be a problem when it comes to staffing. “They don’t take advantage of all the resources at their disposal,” says Lee. Human resources professionals and recruiters can be the CIO’s best friend, she says. But for that relationship to bear fruit, CIOs must make time to convey their staffing needs.
GM’s Szygenda recruits mostly midlevel and senior-level employees for project management, business liaison and vendor management positions. The hardest slots to fill are his “process information officer” roles, which require a solid IT background and strong business operations experience. “Finding those people is getting harder and harder,” says Szygenda. “And the recruiters bring us the same people over and over.”
His solution? Meeting with recruiters regularly. “They have a lot of clients. They go to whoever screams the loudest,” he says. “We set aside time to meet with them every week and put pressure on them to come back with someone outside their database.”
Skanska’s Stockley invites recruiters to IT’s annual vendor event, where he shares his group’s recent accomplishments and three-year plan. “We may not specifically say, ‘In three years, we’ll need this particular skill set,'” he explains. “But this way they not only understand our hiring processes but they also know what’s coming in the marketplace.”
At the most recent event, Skanska highlighted its new focus on application integration and its need for project managers with application integration experience and for business process analysts. “The recruiters started sending us viable candidates before we had even opened a rec for any positions,” says Stockley.
3) Bring Back Bonuses and Other Benefits
Retention wasn’t a problem during the economic downturn. “The job market was so bad that CIOs said, ‘Nobody’s going to go looking around,'” says Kate Kaiser, the Marquette University associate professor who led the SIM study. That’s no longer true. Bureau of Labor Statistics data shows tech employment above its 2001 hiring peak, with 3.5 million U.S. IT professionals employed today. A healthy job market is bad news for CIOs who aren’t working to retain their best and brightest.
“Incentives, special compensation programs and signing bonuses are more of a requirement today,” says Szygenda, who finds himself offering more money to attract and retain employees. “We didn’t have to do any of that a few years ago.”
GM declined to elaborate on its compensation tactics. However, average IT compensation will rise 4 percent this year, according to Forrester. But salary increases can vary wildly from job to job. Workers in roles vulnerable to automation or outsourcing, such as call center, applications maintenance and technical support, may actually see their pay decline, says Forrester. Those with skills in service-oriented architecture, business process reengineering and project management, where demand for workers outstrips supply, will see double-digit salary growth.
Not everyone has money to throw at the problem. Larry Bonfante, CIO of the U.S. Tennis Association, a $220 million nonprofit, vies for talent with Manhattan’s financial services firms. “J.P. Morgan is a half-hour train ride away, and they pay twice as much,” says Bonfante. To compete, he plays up the excitement surrounding the USTA and its collegial atmosphere. “We try to create a context that people find more attractive.”
His most valuable perk? Flexibility. “We don’t chew people up and spit them out like the financial services industry,” says Bonfante. “That’s compelling to a lot of people.” It’s how he attracted two of his best directors, both women with small children. “We allow people to work from home and provide flexible hours for many staff,” says Bonfante. “I’m not a clock watcher. I’m interested in results. If you have to leave early to go to a ballet recital, God bless.”
A third of IT workers said they value a flexible work schedule more than other nontraditional benefits, according to the “2006 Compensation and Benefits Report” by Hudson Highland Group. “Employees are more willing to forgo additional cash in order to have a more improved work-life balance,” says Peg Buchenroth, Hudson Highland Group’s managing director of compensation and benefits.
Flextime is also the most common benefit used to motivate or retain IT workers, according to CIO‘s staffing survey, with 61 percent of organizations employing it.
4) Get Creative About Training
Another benefit IT professionals value is job-related training, according to the Hudson report. But training budgets got slashed during the downturn, and bringing them back remains challenging. Some CIOs have coped by finding creative ways to fund training.
Connecticut CIO Wallace needed business-savvy staff with good communication and negotiation skills to market IT-business solutions to internal customers. To cultivate these talents in-house, she sacrificed an upgrade to her project management software and funneled that $11,000 into a customized four-day training program developed with a local college. “We can upgrade the application next year,” says Wallace. “What good is a software upgrade anyway, if you don’t have the right skills to pull it off?”
CIO Alan Boehme takes a different tack at Juniper Networks, a $2 million router manufacturer that competes with the likes of Cisco. Boehme tracks all the money IT generates or saves the business and reinvests a percentage in professional development, such as funding staff training at the Project Management Institute. “We make the case that a portion be used in IT for training and education in order for us to become more operationally proficient and able to deliver future benefits to the business faster,” he says.
Others take a do-it-yourself approach. Harrah’s CIO Tim Stanley came from companies that valued training and offered robust corporate programs. At the gaming giant, he developed his own program to cover business and technical subjects ranging from finance to data architecture. The program was developed by in-house staff who had subject area expertise and some background in training.
For advanced training, he’s called on his vendors to help by building into their contracts a number of prepaid training hours. Tibco, for example, offers training on everything from basic technology to advanced architecture training. But Stanley insists vendors do it onsite and within the context of Harrah’s systems. He also works with other third parties to offer online certifications for his staff.
5) Launch Business-IT Rotation Programs
Harrah’s Stanley knows the benefit of employee give-and-take with the business. He rotates about 20 percent of his IT staff annually into different roles in the department or the business, sometimes during a project. He also actively recruits IT-savvy business staffers from local properties and corporate business functions. The business doesn’t protest. “We’ve given more than our fair share,” says Stanley. “Marketing and operations pilfered from us for years because IT folks have functional knowledge and orientation in logic.”
Stanley attracts businesspeople to IT by selling them on driving change. “They think it’s pretty cool, and they know it won’t preclude them from going back out into the business,” he says. One employee from the strategic database marketing group who left to work as a property director for Harrah’s has returned to IT as director of enterprise business intelligence. That broader exposure makes it easier for employees to see how IT and the business fit together.
However, CIO‘s staffing survey found only 11 percent of respondents offer job rotation programs. That’s a missed opportunity.
“I believe in rotation programs,” says Wallace, who’s introducing them in Connecticut. She’s particularly high on short-term job swapping. As vice president of IT at CNA Financial, she had the IT and business manager on a project switch roles for three months. “It worked well. They were both job swapping temporarily, so they had an interest in the other being successful,” says Wallace. “It also helped us identify people from the business that we eventually sucked into IT.”
Wallace also fosters a business-centric environment to nurture such skills in her IT staff. “If there’s an application development effort, I don’t have them measure success by whether it came in on time, on budget and according to spec. I insist they take it a step further and add business metrics.”
Each member of her technical staff is devoted to a specific internal customer. As they learn more about the customer’s business objectives, Wallace encourages workers to share knowledge during monthly IT staff meetings.
5 THINGS TO DO FOR TOMORROW
1) Go Back to School
Kevin Gallagher cringes when CIOs complain that recent computer science grads aren’t exposed to business principles. “I have to say, ‘Ahem, I teach information systems in a business school,'” says Gallagher, assistant professor of Management of Information Systems at Florida State University’s College of Business. “We teach students about project management, communication and leadership.”
CIOs need to quit complaining about college IT programs and get involved in shaping their future workforce, says Stephen Pickett, SIM president and CIO and VP of trucking company Penske. “I encourage any CIO to work with their local university to make sure they’re developing the kind of individuals they need,” he says. Pickett himself helped introduce new business classes to the technical programs of two universities. He suggests CIOs get involved in undergraduate computer science as well as in master’s programs in information systems and IT divisions of business schools.
CIO support is the key to such efforts. For example, GM’s Szygenda sits on the board of Carnegie Mellon University. He also helped create an online master’s program there to offer technology training to business professionals including GM employees. “The model we’re trying to create everywhere is to turn out professionals who have both the technical and the business training,” he says.
In an international twist, Szygenda is jump-starting similar efforts with universities in countries where GM does business, such as China, India, Russia and Brazil. Technical programs in these countries are top-notch, says Szygenda, but business education within them is practically nonexistent. So he’s introduced GM IT’s Skills for Success business training in local languages.
2) Spread the Gospel of IT Careers
Connecticut’s Wallace values business savvy in her employees. However, “not everyone in IT has those skills,” she says. So she actively recruits from the business community. “I know IT can be a very attractive place for them if I market it correctly,” says Wallace. “I tell them that the great thing about IT is that it’s one of the few places in any organization—from state government to the private sector—that touches every important project going on in the business.”
Wallace pitches business recruits on the chance to get involved with large, strategic projects across all the state’s divisions instead of working on one initiative in a non-IT department. Her marketing mantra? “You don’t need to know how to code.”
Smart CIOs are also preaching to the next generation of workers. It’s not just a goodwill effort. Hands-on marketing by technology leaders is critical to counteract the bad rap IT jobs have gotten. “Students think all IT jobs are being offshored, and they make the mistake of thinking that outsourcing and offshoring are synonymous,” says Pickett. “You can clear that up, and it’s very exciting.”
Wallace also goes on campus in her efforts to get the word out. “I encourage students to take certain courses—project management, negotiating, communications—that will help them straddle the IT-business fence,” she says.
Spreading the good news of technology opportunities may have to start even younger. “There’s much more work to do in the K-12 environment to encourage math and science,” says Phil Zwieg, VP of IS of Northwestern Mutual. “The numbers there are depressing, particularly with girls.” (For more on K-12 IT education, see “Computer Education’s Failing Grade.”)
For some years now, Zwieg’s IT HR team has worked with a local high school to set up IT career days and help with class development. “HR organizations know there are challenges coming in the next five to 10 years,” he says. “It’s important to continue to reach out to high school communities.”
He worked on an initiative last month cosponsored by Marquette University, the Wisconsin chapter of SIM and the city of Milwaukee. Nearly 500 juniors and seniors from local public high schools who were summer interns for area firms and the city itself were treated to a day on campus, including lunch. More than 20 companies and colleges set up booths and interactive exhibits to encourage student interest in IT degrees and jobs. It’s a new effort, but Zwieg believes it will result in more enrollment in science, technology, engineering and math programs.
CIOs may be disinclined to spend their already limited time with young students because there’s no near-term ROI, says Marquette University’s Kaiser. But long-term benefits could be big. “You can get to some of these kids who would never even think about going to college, let alone go into IT, and open up their eyes to the possibilities,” says Kaiser.
3) Invest in Interns
Juniper’s Boehme is a big believer in internships. Interns are on the job at Juniper’s offices in Sunnyvale, Calif.; a similar program launches in Europe this fall. They’re not all the usual suspects: One is studying journalism and has taken charge of the IT newsletter. The program required investment in training and management oversight, but Boehme says it pays for itself. “It costs a lot less than bringing in contractors to do the same work,” he says. “At the same time, we are able to build a future pipeline of potential candidates for full-time positions.”
Boehme is in the minority. Internship programs seem like a win-win for CIOs—eager young minds for cheap—but an effective program that benefits both the intern and the organization takes significant investment with no guarantee of a good return. As a result, according to CIO‘s annual staffing survey, only 13 percent of IT leaders have an internship program in place today.
Harrah’s Stanley is a fan of graduate school recruiting but initially resisted investing in an undergraduate internship program. “I wrestled with it,” he says. “Young people flip-flop quite a bit before they figure out what they really want to do.”
Growing concern about the future supply of IT workers changed his mind. “Kids are coming out of school without the skills necessary to be productive,” he says. “They may be brilliant at code, but they’re not coming out fully experienced for customer-facing roles.”
Harrah’s IT internship program is now in its third year, with 15 undergraduate students and one graduate student on board. Each has an area of interest, from project management to security. Stanley seeks out students with a good academic track record and extracurricular projects related to their major. They intern for one or two years.
“The program has grown 25 percent year over year, and our retention rate is very high,” says Stanley. Between 20 percent and 50 percent of interns have gone on to accept jobs at Harrah’s. The program takes management energy and time but interns who are later hired are ready to hit the ground running. “There’s no telling whether or not they’ll get restless here at the five- or six-year point,” says Stanley. “But I’m encouraged.”
4) Blaze New Career Paths
A big concern for students and technology professionals alike is the shape career paths will take as IT’s staffing needs evolve. “Beyond starting out as a programmer and ending up as a CIO, they have no idea,” says FSU’s Gallagher.
In fact, most CIOs are struggling with this. “It’s not as clear as it once was when you went from programmer to analyst to systems analyst to project analyst to project manager to manager,” says Zwieg of Northwestern Mutual. “We haven’t quite figured it out.”
Even as CIOs sort it out, some are taking tangible steps to make career progression less of a mystery.
Wallace is hampered by the rigid career paths defined by the state of Connecticut—a developer must progress on the development path; it is difficult to move horizontally or upward into, say, an architecture role. Yet, creating new opportunities is key to retention, she says. “IT people are job hopping, and if you don’t provide them a way to move ahead they will leave.”
So Wallace asks every employee where she wants to be in two years and creates a development plan to help get her there. A supervisor reviews the plan quarterly with the employee as part of performance evaluations. Wallace says it is too soon to talk about outcomes but notes that this tactic made it easier promote more from within and reduced turnover when she used it at previous employers. It’s a smart move. IT workers are more likely to walk out because they see no opportunities for advancement than for any other reason, according to Hudson Highland Group’s “2005 Retention Initiatives Report.”
If you can’t offer prized employees a promotion or more interesting work, say some CIOs, you might help them find a larger role outside the organization. “The biggest issue I have is career progression at the senior level,” says the USTA’s Bonfante. “For some, the only thing they can aspire to is me getting hit by a bus in the parking lot.”
Bonfante naturally offers upwardly mobile employees more compensation and responsibility. But at a certain point, it’s up or out. So he sometimes uses his connections to help them find new jobs. It’s beneficial all around. The employee moves into a bigger role (albeit at a different company), an opportunity opens up within IT, and inevitably it leads to referrals from the worker you helped. “I’ve found that good karma comes around,” says Bonfante.
5) Get Serious About Knowledge Retention
For some CIOs, the solution to their staffing worries may be sitting just down the hallway. But few have truly thought ahead about how to keep veteran workers and their wealth of knowledge from walking out the door.
With the boomer generation fast approaching retirement, CIOs need to put such tactics in place to retain valued employees. “More of that is going to be needed,” says Northwestern Mutual’s Zwieg, who retires this year. “There are different ways to deal with the more mature worker: modified work schedules, different benefit packages, consulting opportunities.”
Retention of senior staff is top of mind for Wallace: Half of her IT department is eligible for retirement between 2008 and 2010. And she’s got a load of legacy technology work that was never fully documented. To keep those workers in the fold, Wallace makes sure they get the same training, recognition and reward opportunities as everyone else. Midcareer workers and those approaching retirement are sometimes overlooked by managers dazzled by younger hires with the latest skills. This lack of attention can lead to poor morale, a decline in productivity and an exodus of older workers.
“You want every employee to be motivated right up until the day they go,” says Wallace. “They may even defer their retirement and hang around a little longer.”
Mentoring programs can also be an effective tool to encourage knowledge sharing across generations. However, only 18 percent of organizations offer formal programs, according to CIO‘s staffing survey.
Creating an effective mentoring process isn’t easy. And it shouldn’t be a one-way street. A good program is not just about making sure older workers who understand Cobol pass on that knowledge. Older workers are often interested in learning from their mentees. “They get excited about learning about Java,” says Marquette’s Kaiser. “They like the challenge. And they want to learn new skills themselves.”
Stanley just conducted a two-year pilot mentoring program at Harrah’s. “We found that employees who had good experiences working with a team or supervisor were better employees overall,” says Stanley.
He says those who participated also came away from the program with a stronger sense of career growth. “We get the biggest juice out of it at the midlevel,” notes Stanley. These are workers who “may have thought they have to go into management to move up. Now they realize they can move up on another track.”
Retraining and redeployment can also help experienced workers gain new skills and rekindle their passion. Harvey Nash’s Behenna has successfully retrained midlevel employees in a host of new areas. “The best success stories have been where we moved people from operational roles into project management. We even took a member of the finance team and turned him into a senior IT manager with profoundly technical responsibility,” says Behenna. “Anything is possible. You just have to know your people, keep an open mind and develop their strengths. But it’s an investment.”
Behenna also offers a range of new work environments to keep people in IT longer, and it’s not just for those approaching their golden years. He’s made arrangements such as three-day workweeks with adjusted compensation and benefits to keep valuable employees who might otherwise have burned out and left his company—and the IT field—altogether.
“We have several variations of this issue for people on the cusp of leaving, and it’s not just age-related,” says Behenna. “It’s working out well.”
Senior Editor Stephanie Overby can be reached at email@example.com.