IT staff shortage looming

Outsourcing. Automation. Downsizing. The industry has been awash in unemployed IT pros. But experts are now predicting an IT staffing crunch is just around the corner, and the implications for U.S. technology innovation are sobering.

Last year Phil Zweig needed to fill two critical roles in his IT organization at Northwestern Mutual - one in identity management and one in mainframe system support. Zweig, vice president of IT for the Milwaukee firm, began to get antsy when those slots had not been filled in the usual timeframe of two to three months. "It was taking us about five to six-plus months, double what I would like to see," he says.

In itself, that might not seem like a big deal, but Zweig has his eye on the bigger picture. As vice president of advocacy and communities of interest for the Society for Information Management (SIM), he heads up a research project that is examining the combined effects of radically dropping enrollment in IT programs at the undergraduate level and the first wave of baby boomer retirements. "Between the retirements that are coming and the reduction in computer science students, we're in a very difficult position," he says.

Zweig is part of a growing number of IT leaders who are concerned it will be increasingly difficult to find people with hot skills such as project management. Without enough future IT professionals in the pipeline - and with thousands of older employees leaving the workforce - the U.S. could be left high and dry when it comes to technology innovation. And that could sap economic growth.

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Gartner estimates six out of 10 corporate IT professionals will assume business-facing roles by 2010. By that same year, IT organizations at midsize and large companies will be at least one-third smaller than they were in 2000, according to Gartner. In five years, 10% to 15% of IT professionals will drop out of the field altogether, the firm forecasts. These predictions portend a clouded future for an important sector of the U.S. economy.

"Where will the next wave of technology creation come from? Will the U.S. be able to sustain its leadership? What will happen if there's no one left to hire here?" says Nancy Markle, past president of SIM and a current board member. Markle was previously a CIO at Arthur Anderson.

Declining enrollment

With the pain of the recession's widespread layoffs barely in the past, it is hard to believe an IT worker shortage could again be just around the corner. Five years ago, the business and technical press were full of stories about the lack of skilled IT professionals. The topic was a perennial favorite, right up until the economy tanked.

But the signposts to a coming IT worker shortage are rooted in fact. The fact, for example, that undergraduate enrollment in computer science programs has dropped 7% for each of the last two years, according to the Taulbee Survey of the Computing Research Association (CRA ). Further up the pipeline, the number of students who declared their major in computer science has declined for the past four years and is now 39% lower than in the fall of 2000.

Kate Kaiser, associate professor at Milwaukee's Marquette University, teaches a basic computer science course, among others. "In 2001, this class had two sections and 48 students. This fall I had one section and 12 students," says Kaiser, who is conducting interviews with IT managers as part of the SIM research project. "It's too bad - I think everyone should love this field," she says.

The steep decline in IT students is at least partly attributable to a largely unseen but persuasive factor: parents. Just a few years ago, technology was a glamorous destination, but thanks to its role in the dot-com boom, many now see it as a dead letter. The perception is that all the good IT jobs are in India and China, and they're not coming back any time soon. "Parents influence the field their kids go into. Right now, they view IT as too unstable," says Diane Berry, managing vice president for Gartner's human capital management practice.

"The adults in these kids' lives are perpetrating the wrong information. That is only making things worse," says Joey George, professor in the MIS department at the College of Business, Florida State University, in Tallahassee. "These jobs are starting to come back."

No cause for concern?

In fairness, some people believe the alarms about a looming IT worker shortage are akin to Chicken Little's warnings about the sky falling. John Glaser, vice president and CIO for Partners HealthCare System in Boston, is not currently experiencing a crunch, and he's not overly concerned about the dropping rates of computer science students, either.

"It is not clear to me how much of an impact [the declining IT student enrollment] will have. Many of our technical people received their education at community colleges, vocational schools or through on-the-job training as they shift careers. I don't know how many of our recent hires have followed a computer science path through college," Glaser says. Recently, however, he has seen IT staff turnover rates increase from 3% to 7% to 8%.

Dwindling IT pipelineThough CRA research indicates a sharply reduced supply of computer science students in the U.S., Jay Vegso, manager of membership and information services, stops short of declaring an IT worker crunch. "Predicting demand [for IT workers] is very difficult and has been botched before," Vegso says.

There are other countervailing factors. The U.S. government might soon elect to increase again the number of H-1B visas, allowing additional foreign workers to take IT jobs here. Companies might do a better job of developing non-technical professionals to join the IT ranks. Outsourcing and automation will almost certainly consume an increasing number of IT jobs going forward.

No one knows for sure what effect these forces will have in a year or two. Large companies are not reporting huge gaps in their available IT skills today, but tomorrow could be another matter.

Where the gaps are

It is impossible to precisely know in advance whether the coming shortage will be severe, but there are some best practices IT managers should implement now if they haven't already, experts advise.

Topping the list is an IT skills inventory. This is exactly what it sounds like - evaluating what skills are currently in-house, what skills might be needed in the next five years and putting together a plan to bridge that gap. "Companies need to come up with a workforce plan that details how they can continue to meet their own changing needs," says Andy Walker, research director for Gartner.

The skills inventory will immediately spotlight the most pressing skills now and for the near term. Networks are still a hot area, and for most organizations finding someone who combines technical savvy with soft skills is an ongoing challenge. People with project management experience and the ability to thrive working in virtual global teams are in desperately short supply. "Companies need both business and technical skills but the business skills are harder to find," Berry says.

Many companies have instinctively dealt with a potential worker shortage by extending the working life of people who found they couldn't retire when they wanted because of the economy. "We got an extra few years out of them," Walker says. That is a good way to keep legacy systems going until they need to be replaced, he adds, but is a temporary fix.

Creative solutions needed

On a macro level, Zweig believes the long-term solution to an IT worker shortage is to reach out not just to university students but also high school and middle schools. "We have to get students enthused about entering IT. This is not a dying profession," Zweig says. SIM is working on school outreach efforts with its more than 30 nationwide chapters.

As for CIOs who are concerned about how to fill their spots in the coming years, it might take a mixed, creative approach. "You might outsource some folks and bring some up through the in-house ranks, use contractors for other roles," Walker says. He admits this makes managing the IT organization more complex.

But these efforts will be worth it in the long run if they help preserve IT jobs in the U.S. economy. "Other countries are pushing for technical education in their countries. If we don't do that here, companies will have no choice but to send the jobs offshore. That's not good for the U.S.," Markle says.

Harris Miller, president of the Information Technology Association of America (ITAA), heartily concurs. The combination of fewer students and the coming wave of baby boomer retirements threatens American competitiveness, he says. "It's a myth that the smart people only live in the U.S. The advantages that we had in the field of technology were never going to last forever," Miller says.

Miller believes turning the situation around requires a "major wake-up call" on the part of government and private industry. Everyone needs to support the next generation in seeing IT as a vibrant, growing occupation, or else the tradition of technology innovation will perish. "We're like the frog sitting in the slowly boiling pot. It is happening so slowly no one notices but pretty soon we're going to be dinner," he says.

Not enough jobs or not enough talent?

Growth occupationsFastest growing IT job titles in the U.S. economy, 2002-2012
Computer-related job titles* Employment 2002 Employment 2012 % growth
Network systems and data communications analyst186,000 292,000 57%
Computer software engineers, applications394,000573,00046%
Computer software engineers, systems software281,000409,00045%
Database administrators110,000159,00044%
Computer systems analysts468,000653,00039%
Network and computer systems administrators251,000345,00037%
Computer and information systems managers284,000387,00036%
* In descending order from highest to lowest growth Source: U.S. Department of Labor Bureau of Labor Statistics, Feb. 2004

Paul is a freelance writer in Waban, Mass. She can be reached at lauren.paul@comcast.net.

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