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Remember the IT skills shortage crisis? It was only a couple of years ago that IT managers counted finding enough experienced technology professionals as one of their biggest concerns. Experts predicted a chronic shortage of IT skills for years to come.
Fast forward to today. With many dot-coms in ruins and IT spending and hiring still in the slow lane, the job market for technical professionals is a completely different story. Many experienced IT professionals are unemployed or underemployed. Consultants and contractors are reducing their rates to get jobs. And opportunities for people with entry-level skills are vastly reduced.
Recently, in conjunction with the Society for Information Managements annual Interchange conference in Salt Lake City, eWeek Executive Managing Editor Jeff Moad and IT Careers Managing Editor Lisa Vaas sat down with a select group of CIOs, educators and IT work force experts to explore the root causes of the IT job market downturn, when it might end, and what employers and IT professionals should do in the meantime.
eWeek: Hiring managers tell us they see this as a golden opportunity to upgrade the IT work force. You can get a much higher skill level in the people coming in the door. You can actually work with fewer people and get the same amount of work done, and salaries are actually dropping, so labor costs are going down. How are you attempting to take advantage of the situation?
Divinere: There are more candidates available today for IT organizations as far as hiring. I see more talent available today. What a lot of organizations have done is theyve brought in their own IT/ [human resources] recruiter types, and theyre spending more time finding the talent out there. With that, I assume that in many cases salaries have come down. … I think some of the people whove been around for a long time—who started their careers with mainframes, eventually client/server, now with the Web-based technology—some of those people have a lot of good business talent, a lot of good technology skills, and where they used to command big dollars several years ago, some are still seeking employment. …
Barrett: Yes … there are people available for probably less money than they were making during the dot-com days, but Im not sure Im seeing companies taking advantage of that to consciously retool the organization. The companies Im involved with are downsizing and shrinking so much, were cutting the low-level people, keeping the people as best as we can. Theyre not replacing the good people we have, hoping to get somebody a little bit better.
D. Brown: I think theres a danger in trying to bring on a higher-skilled individual at a lower price because, once the economy does bounce back, if the individual perceives he or she is not being used in a way they need to be, [that is,] theres no growth or no career path for them … I dont think theyll stay. I think the danger is theyll be off somewhere else, and youll be out recruiting all over again.
Divinere: Thats true, but it doesnt mean theyre not bringing in some of these people today. Ive seen many companies bring in some of these people that they were looking for a couple years ago that they couldnt get, they couldnt find.
Luftman: Isnt it different at different levels? More senior-level folks might be having a much more difficult time finding a position quickly, where your lower-level, more technical people … [are] still finding jobs. I can speak to that from folks I work with, on the senior end … senior-level managers or even CIOs whove lost their jobs, and theyre out of work for a year, maybe more. … [On the other hand,] I see the kids … graduating as undergraduates, they used to get jobs a little bit faster. But theyre all getting jobs, and very good jobs. On the salary thing, the more senior people dont care as much about their salaries as the younger kids. The kids want to make that little extra money, but the senior people, theyve got some money, its not quite as important to them, and theyre more interested in maintaining their niche in the business world.
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eWeek: Ron, you touched on something earlier: Youve seen a lot of companies bring in IT HR people to sift through this mountain of résumés. We hear a lot from our readers, people who are unemployed or underemployed, who are very frustrated at this new level of interface they have to go through. They say these people dont really know much about IT or technology.
Divinere: Many times, I think, theyre overwhelmed because, with the job boards that are out there today, theres so many résumés to go through. [In addition,] businesses are very specific on their hiring. A couple of years ago, they wanted somebody with skills A, B, C, D. And [if] the person had A, B, C, theyd hire them. Today, they want A, B, C, D, [and] you have to have A, B, C, D and X, Y, Z. …
When hiring managers want to hire for those specific skills, its more difficult. And then you have to go through an awful lot of résumés because theres a lot of people available.
D. Brown: The other thing is, we talk about IT resources. The ability to rent higher-level resources at lower prices, I think, is certainly a lot different than it was a few years ago. You can go out and hire good contractors. You can bring in consultants. Given the uncertainty in the market … if you really need to bring in people now, theres an opportunity to bring in a higher-level individual at a lower price via the contractor route. The risk there is if the project goes away, the person goes away. … I guess what Im saying is, if Im looking right now to upgrade, theres an opportunity to do that without a lot of risk, using contractors.
eWeek: What were hearing now is that, because you can get all these skills on the marketplace, its almost like age discrimination has turned around: Organizations can get people with lots of experience for relatively little money. Are you seeing that?
D. Brown: Bringing [in someone with] more [experience] than you actually need … can be a positive. It can also be a negative. They can be destructive forces, if theyre politically astute, if they decide they maybe want to get inside and zero in [on a particular job]. It happens. There are potential negatives that need to be managed as well.
C. Brown: Theres another positive spin you might put on it. A lot of firms from the late 90s were also putting in ERP [enterprise resource planning] systems, packaged systems. And they need to change the skill set for that. A lot of the client firms that I talk to need business analysts, the consultant-type skills. … There is another golden opportunity for them to bring in some of those people who have that experience.
Barrett: There are less people investing in the $10 [million], $20 million ERP and CRM [customer relationship management] systems. … But youre right, you will need to hire the type of business analysis skills involved in such projects when management decides that they do need data from such systems—hopefully, soon—and you do need those projects.
Luftman: In most studies, the No. 1 requirement during the boom years was just leadership. Not even with IT in front of it, just general leadership, was No. 1.
Barrett: Ive seen a lot of people now whore thinking of becoming a [Certified Project Manager] going to the Project Management Institute training to get certified on how to do projects. IT people, the ones being hired, are for specific projects. Not just the IT people, but anybody needs to almost prove that they know how to manage a project.
Luftman: Most of those are again the younger people, or the first-level managers. If youre a middle-level manager or above, its assumed you already know that.
Barrett: I question that sometimes.
eWeek: Relating to enterprise systems, its not just that companies arent deploying ambitious new systems. Many firms—such as in the retail industry—cant even fully implement the enterprise systems theyve already put in because they dont have the staff to do it. Theyre collecting data from data warehousing, and they cant even do anything with it. Are you seeing that?
Luftman: You take a look at the consultants who were involved in working with the firms and doing some of the newer initiatives, and theyre hurting, too, because companies dont want to invest in those things. Those consultants were smart to take advantage of 9/11. They all hung up shingles that they were all the experts in catastrophic planning … security, too. Those two areas are really going on. … If you cant sell catastrophic planning and security to your business partners now, youre never going to sell it. And thats the kind of thing that people do, rather than the strategic initiatives we were talking about.
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eWeek: Do you see hiring picking up any time soon? A lot of the correspondence we get from readers indicates theyre very frustrated, theyre very angry. And theres a sense that the downturn were seeing now may be more permanent. Do you think thats the case, and if so, whats really changing at the base level?
D. Brown: I think whats changing fundamentally is were all coming off the Y2K hangover. We hired and hired and hired and pushed and did everything we could, and now things are falling off so quickly that a number of people are just catching their breath, [recuperating from] spending associated with Y2K and the dot-coms.
Divinere: Plus a lot of money was spent on Y2K to redo the systems, put in ERP packaged software. They spent a lot of money on hardware, software, development costs, maintenance costs. Y2K was a big part of it, but the economys hurting, [and] labor costs have definitely gone up there. But theres a couple of trends. One is that some work has gone offshore. Thats taken jobs away, without a doubt.
Luftman: When I want to hire those technical skills, youre right: I dont need to find somebody here to do it. I want to find somebody whos a project leader with contacts. That goes back to the contracting issue.
Divinere: So from an expense management standpoint, going offshore makes sense. [And theres another aspect.] It no longer takes two years to build application systems. When we were building systems years ago, we went through the system development life cycle, and we did our requirements definition, and by the time we built our system, it took us two, three years to build a major application. Today, the data is there in many legacy systems. What they do [is develop] extracts. They build a little interim database, and they use new technology. They have an application running in months.
Luftman: So people who build data warehousing and middleware stuff should be better off because they have those skills.
Divinere: I see a lot of activity happening in data management and data warehousing. I think thats a big area.
C. Brown: [Is the mail youre getting from] some of the newer folks whove entered the profession?
eWeek: I think both. We get mail; we hear it both from unemployed technical people and from management people. Theres a sense that “Ive been in IT 20 years, I have these skills I invested in, and up until a couple of years ago, I felt I was secure. I thought I did all the right things, but now the rules have changed.”
D. Brown: I know folks who are counseling professionals. Theyve mentioned the younger folks who are coming in and are having trouble with the idea that they cant get on with their lives and their careers. They came out of the chute, they came into the Y2K draft and it just carried them along. And, all of a sudden, it just went away, and theyve never known anything but success, and they are frustrated and disillusioned.
C. Brown: Thats what Im hearing from the younger ones, too, and thats why Im curious. When they first took their jobs, everything was there: all the special bonuses. And, all of a sudden, some of thats been taken away. I think theres disillusionment among some of the newer recruits.
Luftman: I sense some of the biggest pain is with the older folks, though. Theyre the ones with the gray hair, theyre senior, theyre now out of work. Theyre used to a higher standard of living. Theyre seeing age discrimination … again. …
Think about the folks who were in IT for, say, 10, maybe 15 years. They only experienced the limelight, the positive, the opportunity to quit your job for a higher salary, more challenging work. And then, all of a sudden, within a year or two, its a totally different environment. Thats a transformation thats not good [even] for people whove been in IT 20 or 25 years. But [people with less experience] never experienced a downside.
Barrett: Ive still seen predictions that the number of IT employees is going to grow 50 percent in the next couple of years. Where are those numbers coming from?
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eWeek: Which gets back to the original question: Is this a temporary thing? Do those numbers make sense?
Luftman: Its not that its not going to come back. The question is, when is it going to come back? We thought maybe the spring. Well, maybe the summer. Maybe the fall. A lot of people have basically given up. Theyre saying, “I dont know when its going to come back.” Its going to come back, but Im not going to predict it.
Weve not experienced the kind of things weve experienced in the last couple of years. You have the threat of terrorism, war, Enron-itis. One thing after another. Any one of those things would cause a big dip in the economy.
Barrett: As we come up from the bottom, were not going to go through that dot-com boom where were buying and throwing money at high-risk stuff as fast as we can. It will be a slower, gradual climb out of this one.
Luftman: Some of the more senior folks who were going to retire cant anymore. … Thats a whole [different] problem.
D. Brown: What Im seeing is people in their 40s and 50s seriously thinking of moving out of IT, where you never saw that years before.
eWeek: From the sound of it, IT cant promise what it once did: It doesnt have the security or jobs. Where are we getting the leadership from if we cant promise that? Three years ago, there was a lot of discussion about upgrading the image of IT to attract the best people to IT. Is whats going on now setting that back?
Luftman: I teach graduate programs. I have seen nothing but continued growth.
Divinere: I still think IT is the best profession to go into. It doesnt mean that its terrific. But I dont know if anything right now is terrific or guarantees lifetime employment.
I think there are a lot of opportunities there. Its certainly one of the most dynamic environments.
D. Brown: Its challenging. You can come in every day and look at problems and have issues that youve got to deal with and youre not going to run into anywhere else.
Barrett: Thats whats different in the IT industry compared to operations or even HR or finance. A lot of them do the same thing every day. In IT, most people do something different every day. Even at the help desk, you always hear, “Oh, boy, you wouldnt believe what happened to me today.” Youre not bored.
IT, to the people inside it, is a tough job. We put in long hours, we have to work weekends, we get long, big projects. Were always under fire, under the gun. And yet people in the other parts of the organization say, “Gee, I wish I could work in IT.” For some reason, it still looks like its fun. … The problem is, those people cant get into the IT business.
Page Five
D. Brown: If you start looking at the globalization of IT and the skills available around the world … if you go around to different parts of the world, the cost is staggeringly low for the caliber of resource youre able to get. There are command and control issues, but these can be managed.
I have to question, if some young individual came to me and said, “I want a career in IT,” Id probably say, “Well, OK, you can go out and code, but thats probably not something you can look at forever.” If you want to get into IT, [the key is] understanding IT but cultivating business skills. Project management skills are also important.
The systems we install today are much more sophisticated and frequently do not have to be modified by changing the code. These more flexible systems also allow us to use more resources in other parts of the organization to do things once done by the IT department.
eWeek: What should IT people be doing now to be ready for when things improve and there are more opportunities?
D. Brown: I tell my folks to come in and talk to me. Im not always going to tell you what you want to hear, but once people know youre willing to have that kind of conversation, it gives you a degree of latitude in what you can talk about.
C. Brown: The other thing is that this is a great time for people to develop themselves. Its a great time to invest in you.
D. Brown: Thats very true. Every individual can look at themselves and say, “I can take a class. I can upgrade my programming skills to stay current with todays languages and techniques. I can get my MBA.”
A key point: Its up to you to manage your career, rather than saying its up to the company to do it for me.
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