IT Staffing Concerns Persist
Is the shortage of IT workers – a major U.S. staffing problem during the 1990s – a thing of the past? You'd think so in light of the dot-com failures, the slowdown in the economy, and sluggish product demand in the IT industry. But there are signs that the shortages may emerge again soon and that companies are already having a hard time hiring and keeping workers with the right mix of IT skills.
In the U.S., layoffs in the IT field have relieved labor shortages in the last couple of years. The Information Technology Association of America (ITAA) reports, for example, there are 9.9 million people in the IT workforce, down from 10.4 million a year ago.
Most (80%) IT jobs lost in 2001 were due to mergers and restructurings, according to Computerworld magazine. Then there are the tens of thousands of IT professionals who worked as consultants and contractors, typically the first to go when IT budgets are cut. Overall, IT departments undergoing layoffs reduced their staff by an average of 18% in both July 2001 and January 2002.
But such cuts don't necessarily mean there's going to be a glut of IT workers in the foreseeable future. According to the ITAA study, hiring managers estimate that they will attempt to fill 1.1 million IT positions in the next 12 months, up 27% over the level measured last year. In another sign, 89% of the CEOs at North America's fastest-growing technology companies plan on adding to their staff in the coming year, according to a Deloitte & Touche LLP's annual survey released in May 2002.
Moreover, even if there's no lack of IT job applicants at the moment, there's already a shortage of workers with the right set of skills. A January 2002 CIO magazine survey of IT professionals – most with hiring responsibility – found that nearly two thirds agreed that they are experiencing an IT skills crisis, with the biggest shortfalls in the areas of application development, project management and networking. The other staffing challenges faced by these professionals are salary freezes, shrinking training budgets, and lowered staff morale.
Other surveys find that, despite job cuts, quit rates remain a headache. The Meta Group reports in its "2002 IT Staffing Compensation Guide" that voluntary turnover among IT professionals was 11% in 2001, dropping only to 10% in 2002. The industry sectors hardest hit by the recession were also hardest hit by turnover – including distribution and transportation, media and publishing, and medical and healthcare – with turnover reaching as high as 20%.
In response, according to the Meta researchers, there's been a marked increase in the use of retention bonuses, with 44% of surveyed firms using them in 2002, compared with 12% in 2001. Not all sources agree about this trend, however. The CIO magazine survey found that retention and recruitment monetary incentives have become less common, with hiring bonuses and retention bonuses dropping 50% and 42%, respectively, from November 2000 to January 2002.
One alternative to bonuses is training. Among the CIO magazine survey respondents, training was the favored recruitment and retention benefit, and IT training was up 10% compared with 2000. Still, many employers are reluctant to provide a lot IT employee training, perhaps believing that the investment will walk out the door when another company offers its workers higher salaries. But some experts say that training is one of the best ways to retain valued employees because it demonstrates commitment to their development. Savvy companies are adopting innovative and cost-effective strategies to boost IT training, such as taking advantage of in-house expertise to train other employees or asking vendors to provide online or videoconference sessions.
Another way to build morale is to show employees that they are appreciated. It costs little and may well have enormous returns for the organization. Assign IT staffers to solve a problem or redesign a process, with the only parameters being that their solution must save time or money (or both) – then stand back and allow them to innovate. Having allowed them to participate in this manner should generate the kind of employee engagement and loyalty that boost IT worker retention rates once the labor market grows tight again.
For more highlights of CIO magazine's IT staffing survey results, visit
http://www2.cio.com/research/surveyreport.cfm?id=68
Discussion of the Meta Group research can be found in the Darwin Executive's Guide article by Jon Surmacz, at
http://64.28.79.73/learn/numbers/number_detail.cfm?ID=all&METRIC=376
For more information on the ITAA study, please see
http://www.itaa.org/news/pr/PressRelease.cfm?ReleaseID=1020695700
For more suggestions about encouraging innovation among IT workers, see James Gaskin's article "Building an Innovative IT Staff" at
http://www.itworld.com/nl/it_professional/03042002/.
To read about Deloitte & Touche LLP's "Fast 500" survey, see Brian Sullivan's article in Computerworld magazine:
http://www.computerworld.com/managementtopics/management/itspending/story/0,10801,71323,00.html
or visit the Deloitte & Touche Web site at
http://www.public.deloitte.com/fast500/media_center/press-releases/2002survey.shtm.
In the U.S., layoffs in the IT field have relieved labor shortages in the last couple of years. The Information Technology Association of America (ITAA) reports, for example, there are 9.9 million people in the IT workforce, down from 10.4 million a year ago.
Most (80%) IT jobs lost in 2001 were due to mergers and restructurings, according to Computerworld magazine. Then there are the tens of thousands of IT professionals who worked as consultants and contractors, typically the first to go when IT budgets are cut. Overall, IT departments undergoing layoffs reduced their staff by an average of 18% in both July 2001 and January 2002.
But such cuts don't necessarily mean there's going to be a glut of IT workers in the foreseeable future. According to the ITAA study, hiring managers estimate that they will attempt to fill 1.1 million IT positions in the next 12 months, up 27% over the level measured last year. In another sign, 89% of the CEOs at North America's fastest-growing technology companies plan on adding to their staff in the coming year, according to a Deloitte & Touche LLP's annual survey released in May 2002.
Moreover, even if there's no lack of IT job applicants at the moment, there's already a shortage of workers with the right set of skills. A January 2002 CIO magazine survey of IT professionals – most with hiring responsibility – found that nearly two thirds agreed that they are experiencing an IT skills crisis, with the biggest shortfalls in the areas of application development, project management and networking. The other staffing challenges faced by these professionals are salary freezes, shrinking training budgets, and lowered staff morale.
Other surveys find that, despite job cuts, quit rates remain a headache. The Meta Group reports in its "2002 IT Staffing Compensation Guide" that voluntary turnover among IT professionals was 11% in 2001, dropping only to 10% in 2002. The industry sectors hardest hit by the recession were also hardest hit by turnover – including distribution and transportation, media and publishing, and medical and healthcare – with turnover reaching as high as 20%.
In response, according to the Meta researchers, there's been a marked increase in the use of retention bonuses, with 44% of surveyed firms using them in 2002, compared with 12% in 2001. Not all sources agree about this trend, however. The CIO magazine survey found that retention and recruitment monetary incentives have become less common, with hiring bonuses and retention bonuses dropping 50% and 42%, respectively, from November 2000 to January 2002.
One alternative to bonuses is training. Among the CIO magazine survey respondents, training was the favored recruitment and retention benefit, and IT training was up 10% compared with 2000. Still, many employers are reluctant to provide a lot IT employee training, perhaps believing that the investment will walk out the door when another company offers its workers higher salaries. But some experts say that training is one of the best ways to retain valued employees because it demonstrates commitment to their development. Savvy companies are adopting innovative and cost-effective strategies to boost IT training, such as taking advantage of in-house expertise to train other employees or asking vendors to provide online or videoconference sessions.
Another way to build morale is to show employees that they are appreciated. It costs little and may well have enormous returns for the organization. Assign IT staffers to solve a problem or redesign a process, with the only parameters being that their solution must save time or money (or both) – then stand back and allow them to innovate. Having allowed them to participate in this manner should generate the kind of employee engagement and loyalty that boost IT worker retention rates once the labor market grows tight again.
For more highlights of CIO magazine's IT staffing survey results, visit
http://www2.cio.com/research/surveyreport.cfm?id=68
Discussion of the Meta Group research can be found in the Darwin Executive's Guide article by Jon Surmacz, at
http://64.28.79.73/learn/numbers/number_detail.cfm?ID=all&METRIC=376
For more information on the ITAA study, please see
http://www.itaa.org/news/pr/PressRelease.cfm?ReleaseID=1020695700
For more suggestions about encouraging innovation among IT workers, see James Gaskin's article "Building an Innovative IT Staff" at
http://www.itworld.com/nl/it_professional/03042002/.
To read about Deloitte & Touche LLP's "Fast 500" survey, see Brian Sullivan's article in Computerworld magazine:
http://www.computerworld.com/managementtopics/management/itspending/story/0,10801,71323,00.html
or visit the Deloitte & Touche Web site at
http://www.public.deloitte.com/fast500/media_center/press-releases/2002survey.shtm.