If we keep going the way we are now, this year we will outsource one in four IT jobs to India, Russia and other countries that supply low-cost labor, according to the Hackett Group, a trend that sends a message to young people contemplating technology careers: IT work is unstable. You can't count on climbing any career ladder.
College freshman get it. In 2000, 5.2 percent of incoming students intended to major in computer science. By 2008, according to the latest data from the National Science Foundation, that number had plummeted to 1.5 percent.
The need for technology staff who work locally hasn't gone away, however. Although some economists now warn of a near-jobless recovery, the number of U.S. professional and business services jobs, including those in IT, will grow 1 percent to 2 percent per year, according to Moody's Economy.com.
Yet CIOs are faced with a dry pipeline of entry-level staff. At the same time, tens of thousands of young people between the ages of 18 and 25 live in poverty in the major cities that are home to most of the available IT jobs. They're too old for government social services programs that may have provided food and financial support when they were children. Now they seek work, but lack the training to land most jobs beyond serving food or cleaning offices. A college education usually isn't an option because they haven't taken the right high school classes or have dropped out. And, of course, they don't have the money.
Matching the most promising of these young people with an IT opportunity solves two problems: It meets the urgent need for new technology workers and the crying need for pathways out of poverty. And so CIOs have been working with a handful of nonprofits to recruit candidates from the toughest neighborhoods in the nation to train for technology careers. Graduates of these youth training programs--the most notable of which are Year Up and NPower--get internships and often jobs at top firms. For the CIOs involved with these groups, it's not just a feel-good way to give back. They're tapping what had been an invisible talent pool and diversifying their staffs. They also like the ROI they get from investing in recruits who are hungry to learn by doing.
To read more on this topic, see: Where the IT Jobs Are: 10 American Cities and Smallest Number of Students in a Decade Graduate with Computer Science Degrees in 2007.
"Doing something for the community but at the same time getting access to young, ambitious talent helps to energize the organization," says John Galante, CIO of the Private Client Workstation program at JPMorgan Chase, which has sponsored the New York chapters of Year Up and NPower for several years. The $100 billion financial services firm currently employs interns in hardware support and software quality testing, among other areas.
But none of this is as simple as it sounds. The programs are succeeding in several cities but aren't available nationally. As nonprofits, they rely largely on corporate funding, and thus depend on corporate fortunes. The 11 to 26 weeks of training typically offered is, by design, tightly focused on specific technologies or concepts; graduates still have much to learn about both IT and corporate life. Skeptical CIOs have to be convinced that taking on these young people as interns, never mind hiring them full time, is worth the hand-holding and the risk. Not everyone makes it.
"There's a certain a degree of training and mentoring that goes with it," Galante says. "But the kids we've had are very quick and very ambitious and very hardworking."
A Fresh Start
Solenny Herrera finished an NPower internship with Philadelphia's Reed Technology and Information Services in January. Her managers, including CIO and COO David Ballai, an NPower board member, were so impressed with her aptitude that they quickly expanded her duties. She started out supporting Windows 7, but she also configured network printers, wiped data from hard drives and servers, diagnosed problems with Microsoft Outlook e-mail and learned about the tape backup and security protocols required for handling data for the federal government.
"This exposure has changed my life and my future," Herrera says.
Her future looked bleak only a few months ago. Last summer, Herrera, 24, and her husband, José, were looking for work. She had been laid off from a job as a machine operator at a soap company and he had quit his job on the assembly line at a manufacturer of doors and windows to take another job that didn't work out. Nothing the Herreras applied for was panning out, and Solenny was spending many hours volunteering at her church, comforting and encouraging other jobless faithful.
In August, as the national unemployment rate reached 9.7 percent, her sister-in-law showed her a flyer about a new program offering free technology training to high school graduates. Herrera thought, "Why not?" She had taken some college courses and had worked briefly as a collections agent. She and José each applied and were both accepted.
NPower had run a successful youth training program, called the Technology Service Corps, in New York since 2002. In 2009, the Pennsylvania chapter was starting its own version, called ITWorks. About $54,000 in one-time grants came in from the United Way and the Philadelphia Workforce Development Corp., an agency that connects workers with jobs. ING Direct and Reed Elsevier (the parent company of Reed Technology and Information Services) together donated $15,000, and Drexel University provided about $10,000 worth of classroom time and resources, says Patrick Callihan, NPower Pennsylvania executive director.
Within a week of distributing flyers at youth centers around Philadelphia, which is among the 10 poorest cities in the United States, 150 people had applied for 15 slots. Callihan chose applicants for in-person interviews. He offered the spots to the people who were financially neediest--based on information they provided about income, hours worked recently (if any) and living arrangements--and who also showed enthusiasm, aptitude and commitment.
Students pay nothing to take NPower's training course, but neither do they get a stipend to cover living expenses--despite the fact that the program is full time, five days a week for 11 weeks. Students also get a 5-week internship at a local company, which helps them get a foot in the door. Still, many promising candidates can't afford to attend, Callihan says.
In the Herreras' case, José's mother agreed to cover what she could of Solenny and José's living expenses during the program. In September, they and the other students began rethinking what they knew and learning what they didn't.
A big lesson for Solenny Herrera was learning how to work in a team, be dependable and depend upon other people. "I wasn't exposed to meeting people before or letting people reach you when they need you," she says. It wasn't as if she didn't want to work this way; she just never had.
Teaching potential IT employees these basic skills so that they can do largely unglamorous entry-level jobs is part of the appeal nonprofit training programs have for CIOs, says Diane Schueneman, a board member of Year Up. As senior vice president and head of global infrastructure solutions at Merrill Lynch (she retired in 2008), Schueneman helped start Year Up's New York chapter in 2002. When she heard from Year Up founder Gerald Chertavian what the organization was doing in Boston and Providence, she says, she knew she'd found a way to advance her campaign to bring more women into IT. About half of Year Up participants are women.
The one-year program, now operating in six cities, consists of training for six months and then a six-month internship. Unlike in NPower's shorter program, Year Up students receive a stipend of between $150 and $240 a week. In turn, they agree to strict rules about behavior and attendance that mirror common workplace norms. Many of these students come from environments without role models for corporate workplace behavior, Schueneman says. Students start with a pool of points and lose some for each infraction. Errant students can, she says, "fire themselves out of the program" by violating rules.
Interns are generally a good source of entry-level labor for companies because they usually come cheap; they get paid mostly in experience and contacts. But Schueneman found that where college interns sometimes didn't work out, Year Up interns did. "There was a me, me, me' attitude out of the better colleges, an entitlement attitude," she says. "None of that is in these [Year Up] adults. They show up. They're on time. They want to do more. They're begging for another assignment." Sourcing talent through nonprofits also costs less than traditional recruiting efforts, she adds.
There are also some harder-to-quantify benefits for IT departments. Back in 2002, employee morale was low in Merrill's infrastructure group. The unit handled a lot of back room hardware chores. "On Wall Street, if you're on the infrastructure side, you're on the low end of the food chain, furthest away from the actual business," she says.
But then Schueneman started bringing Year Up participants on board. After several groups of interns had passed through, something unexpected happened. Job satisfaction in the infrastructure group soared from 43 percent into the 60s, then into the 80s, she says. Mentoring interns, Schueneman found, renewed her staff's sense of purpose. One intern had been homeless since he was 13, she recalls. Another had two children by the time he was 17. "These kids have a thirst they've been denied for many, many, many years--for most, it's been all their lives. They don't have opportunity. We can give them that," she says. "People are so inspired by that."
Year Up says 87 percent of participants land full- or part-time jobs, paying an average of $15 an hour, within four months of graduating. Graduates have gone on to IT careers at such companies as JPMorgan Chase, Partners HealthCare, Perot Systems and Merrill. Others go to college. Year Up students in New York, for example, can earn 15 to 18 credits at Pace University through the program; in Providence, Year Up partners with Johnson & Wales.
President Obama visited Year Up in Washington last June, then lauded the organization during a press conference about the economy a few days later. "If there are ways we can potentially duplicate some of those programs, then we're going to do so. Part of what we want to do is to find tools that will give people more opportunity."
At NPower in Philadelphia, Callihan has the Herreras and the rest of the first ITWorks class focused on meeting a current business need: learning Microsoft's new Windows 7 operating system. Windows 7 was released in October, just after ITWorks launched. "We think demand will be there, so these kids can stand out," Callihan says.
A Foot on the Corporate Ladder
Solenny Herrera says she always liked technology, but she hadn't imagined she could make it her vocation. Her family is from the Dominican Republic, and her father, now deceased, held traditional views that women shouldn't advance their education, work or even drive cars, she says. "That was hard for me. I debated with him a lot," she says. "This wasn't my father's fault. He learned one way and I learned another."
As she progressed at ITWorks, learning not only Windows 7 but also how to configure and troubleshoot PCs generally, Herrera gained confidence. Students spend four days each week on technology skills. But every Friday is given over to guest speakers, visiting from firms such as PricewaterhouseCoopers, who teach corporate survival: presenting yourself effectively, being accountable for what you say and do, managing time, handling conflict, working in teams. "Having this support," she says, "made me think I can do anything."
Randy Gaboriault, CIO at Christiana Care, a large nonprofit healthcare organization, attended an NPower luncheon for local business leaders and the ITWorks class. He talked to them about networking and building a personal brand. "They just drink it all in."
Two years ago, Gaboriault joined NPower's Philadelphia board and helped create the ITWorks curriculum--he finds it energizing to have the potential to change the life trajectories of people now at an economic disadvantage. Since beginning his IT career, one of his aspirations, he says, was to fund learning centers for underprivileged communities. Through ITWorks, "we're doing something that rewires them so materially that it's a way to break the poverty cycle."
The students feel it. When a city transit union went on strike for six days in November, buses, subways and trolleys stopped running. Some students had to walk several miles to get to and from class. One man drove his wheelchair 40 blocks across Philadelphia each morning and 40 blocks home at night.
Lila Santos, a 24-year-old single parent to a son in kindergarten, chokes up when she talks about how ITWorks has changed her life. "It's not easy to get out of the minimum-wage world. I didn't have any skills and college wasn't available to me," she says. "I felt that I was just going to be this lower-class person working at a pizzeria for the rest of my life. I felt there was no more hope."
She's thankful NPower gave her a chance. Callihan says Santos has excelled, receiving an internship at PricewaterhouseCoopers. She hopes to get a full-time job there. "I see PWC as a big fish and I'm a little guppie," she says. "They gave me the opportunity to learn something and opened up a big door."
The ROI for Business
Programs like Year Up and NPower can help build an IT bench from new sources, an advantage that CIOs should make use of, Gaboriault says. "They don't normally get into our headlights the way our system currently works. They're not going to go to college and graduate and get recruited."
Schueneman herself started out skeptical. "I expected nothing. I thought that it's for a good cause: If I give a few kids some experience, fine; there's no obligation to me." What she found, however, was that the students were productive and had great attitudes. Merrill continues to support the program eight years later--not least because corporate sponsors get to influence the training, producing future employees with exactly the skills the firm is looking for. "This program gives you what is needed by a company. Companies themselves help create it."
For CIOs who still aren't convinced, Galante at JPMorgan Chase points to strong ROI. He declines to cite specific figures, but says measuring the salary paid to a given intern against variables such as the number of tech support calls he handles or the number of QA test scripts she writes and executes shows that the investment in internships and donations to the organizations are worth it. About one intern, Galante observes, "When you look at the cost of his productivity and the quality, it's a very good case."
JPMorgan Chase gave one recent Year Up intern a part-time job as a Microsoft SharePoint administrator. The intern is also working on getting certified in SharePoint, Galante says, and may be admitted into the company's college internship program. "He has really blossomed."
Not every student does, however; some with strong potential still slip away. Three ITWorks students had to drop out because of financial difficulties. One young man's mother lost her job, so he quit the program to earn money for his family. The Herreras nearly had to leave, too. "Many times we found ourselves not knowing with what money we were going to pay for the train ride the next day to go to the ITWorks class," Solenny Herrera says. "Sometimes we didn't even have money to have a decent meal."
Lila Santos held on, despite having to miss several classes when her son's asthma flared up and she had no one else to care for him. Instructors sent work home so she could stay current. "They were very understanding. They're like a second family," she says.
Some Year Up students at JPMorgan Chase weren't offered jobs when their internships ended, Galante says. Sometimes they discovered they weren't interested in financial services or the kind of technology work they were doing, he says. In other cases, the intern didn't perform to expectations. "We had given them that feedback, and when the internship came to a close, it was lessons learned for that individual before they were to pursue the next job."
None of this has soured JPMorgan Chase on the program. "It's not that different from our experience with college interns," he says. "We've had more of a positive experience than anything else."
Sustaining the Training
The Obama administration has promised to increase funding for specialized training and retraining programs of all sorts. For example, Obama's Educate to Innovate initiative aims, among other things, to get schools, universities, the government and companies to develop targeted training classes that will put the United States ahead of other countries in math and science education.
But mostly what keeps programs such as Year Up and NPower afloat is corporate donations and participation; businesses open their doors to interns and spend time in the classrooms with students. Companies are careful with philanthropic dollars. Increasingly, they want to see sustainable impact from their giving, according to the Committee Encouraging Corporate Philanthropy (CECP), a group of international CEOs dedicated to corporate giving. Among 47 CEOs surveyed recently by CECP, more than half said they are refocusing donations on causes central to business strategy. That bodes well for groups like Year Up and NPower that address a corporate need, Callihan says.
When companies don't, as Ballai puts it, "have the capacity" to donate money, CIOs still can volunteer their time to teach and mentor. "You still are needed and you can seed the future," he says.
Whether ITWorks will get funding in time to hold a spring semester is unclear. Callihan says he and his team are applying for grants and talking up ITWorks to potential corporate sponsors. He may have to suspend classes for a few months to raise money. "You don't want to have a gap like that, but it might be necessary."
Solenny Herrera, meanwhile, is now working full-time in Reed's data production operation "She is very talented and dedicated to learning," Ballai says. "I think she's going to be a great success story."
Senior Editor Kim S. Nash can be reached at email@example.com.
This story, "For IT Jobs, an Untapped Vein of Talent" was originally published by CIO.