"Where Have All the Techies Gone?" The IT labor shortage has companies scrambling for talent, but there are still ways to ease the crunch aside from loosening the purse strings. By Samuel Greengard The IT labor shortage has companies scrambling for talent, but there are still ways to ease the crunch aside from loosening the purse strings.
				Over the last few years, an increasingly tight labor market has taken its toll on companies of all sizes. Thanks to a booming economy and a shortage of workers with specific skills, filling positions has become nothing less than an exercise in frustration. But nowhere has the labor shortage hit harder than in the world of information technology (IT). The general unemployment rate now hovers near a 30-year low of 4.6 percent (September 1998), but
				unemployment in the IT arena has dipped into negative territory. According to the Information Association of America, about 350,000 IT jobs remain unfilled. It’s difficult for companies to find people knowledgeable in everything from network design and integration to implementing enterprise resource planning (ERP) software. "At some point, the IT labor shortage threatens the viability and profitability of companies," says Diane Tunick Morello, a research director at Gartner Group Inc. in Stamford, Conn. What’s more, many departments, including finance, have unique demands that often require a separate IT department, or, at the very least, highly specialized personnel that can focus on the department’s unique needs. Without systems that run at an optimum level, productivity can go right out the window. The bottom line, says Morello, is that in a business world increasingly ruled by IT issues, it’s a bad idea to make high-level policy decisions without paying attention to today’s market dynamics. "Increasingly, a company’s success hinges on the technology that it uses and the people it has to run the systems" she says. Morello isn’t the only one to voice genuine concern. "As we have moved to a high-tech economy, it has become apparent that there’s a severe shortage of people with computer and technology skills," states John A. Challenger, executive vice president of Challenger, Gray & Christmas, a Chicago outplacement firm. "It’s up to companies to act rather than react. It’s absolutely essential to have a clearly defined strategy."
				Here are seven ways to ensure that your company survives, even thrives, in the face of the IT labor shortage.
				1. Identify crucial skills and ensure that job descriptions are broad enough to net applicants. It’s one thing to have a wish list, another to deal with the reality of today’s labor market, insists Morello. Many companies or departments that cannot fill a position for a year or longer simply aren’t realistic about who they are likely to pluck in today’s labor market. "They say there’s a labor shortage, but if you take a close look, you find that their minimum requirements for a job are too high. It’s unlikely that they will ever fill the position because they have created an artificial barrier." One of the biggest mistakes employers make, says James A. Essey, president of The TemPositions Group of Companies in New York, is screening out qualified applicants by describing positions too narrowly. "It’s possible to filter out highly qualified people because of poorly written job descriptions," he says. And the problem isn’t always the fault of human resources (HR). Departments in need of IT staff, including finance, must accurately assess their requirements and differentiate between their wish list and their basic needs. Only then can they ensure that they’re casting a broad enough net to snag qualified applicants while also defining positions tightly enough to slot the right people into
				the right jobs.
				2. Develop a clear-cut hiring and sourcing strategy. According to Essey, whose firm CompuForce (a division of The TemPositions Group of Cos.) provides temporary IT staffing, many organizations lack a cohesive plan for finding IT professionals. They simply wait for resumes to stream in or use scattershot recruiting methods. He believes that it’s a good idea to develop a specific plan of action and then use methods to make the strategy pay off. For example, community colleges, vocational schools and training institutes might all provide qualified entry-level candidates. Forging a link with such institutions and sponsoring a career day can pay huge dividends, providing the opportunity to train bright, young employees to fill needed functions. "A sourcing strategy is essential," says Morello. "Although the current labor shortage is causing some companies to use independent contractors and temp firms irrationally, it is a long-term part of the IT labor market. The voracious appetite for IT, the complexity of technology and the rapid change in business conditions all point to companies using just-in-time staffing." She says that outsourcing is particularly suited to jobs requiring redundant work or non-core competencies. According to Gartner Group, externally sourced IT workers will be used heavily by 60 percent of all
				companies by 2003.
				3. Understand an employee’s real value. "Many companies do not use surveys to determine appropriate pay," says Morello. Others wind up using surveys that are a year or two old. "What some companies describe as a labor shortage is nothing more than their inability to understand what competitive compensation is." She suggests using a current wage survey from a recognized HR consulting firm to get a handle on appropriate compensation. However, she stresses that an IT hiring manager or HR department shouldn’t rely solely on a wage survey. Industry numbers are less and less relevant to the IT world, she states. "Being competitive in your own industry whether it’s chemical products or pharmaceuticals, is not very relevant for a profession where skills are notoriously transferable." She believes that it is more important to measure the value of IT professionals by their internal value to the organization. "Redefining compensation based on internal market values vs. external
				values can radically change the situation," she notes.
				4. Classify employees correctly. When John McElroy, senior vice president of human resources for Yasuda Fire & Marine Insurance Co. of New York, began to examine why his company was hemorrhaging IT workers at a rate of 10 percent each month, he came to an astounding realization. "We had completely misclassified people in the IT department," he says. Not only were some employees underpaid relative to industry standards, they weren’t engaged in activities that tapped into their full potential. By rewriting job descriptions, hiking pay and reevaluating job responsibilities, McElroy was able to slash turnover to a trickle. An added bonus: He now uses 50 percent fewer external consultants, which has
				further reduced expenses.
				5. Ensure an open channel of communication with HR. At many firms, human resources handles hiring for IT, and that can present more than a few headaches for department managers. "An HR person might not have the technical knowledge to understand the nuances of the position and who might be appropriate," admits McElroy. "It’s essential for IT managers and HR to work together closely to understand each department’s needs as well as the realities of today’s labor market." Adds Morello, "The best results occur when a department has a connection or liaison with the HR organization. The fact is, when you have the HR department doing the recruiting for everyone, somebody is going to get the short end of the stick if there aren’t enough qualified applicants to go around. The better you can express your needs, the more likely you are to have your needs met." Companies that allow departments such as finance to do their own IT hiring often face a different set of problems. Most notably, they lack the broader human resources knowledge necessary to make good decisions. Since applications usually flow into the human resources department, it can often identify and pass along leads that might otherwise be overlooked. It can also provide advice and expertise that an individual
				department might not have.
				6. Emphasize career development for current employees. "The biggest constraint on our IT department is the lack of human resources," states David Holvey, director of Marketing Information Services for Wells Fargo Bank. "We simply cannot hire enough people with the skills we need to get everything done." That might sound like a hopeless scenario. But Wells Fargo has learned that the best candidates often come from within the company. As a result, it offers an array of programs to develop and retain IT talent. The list includes lunchtime learning programs, symposiums with guest speakers, and a continuing education program that lets employees take courses on everything from middleware to cutting-edge Internet technology through the University of Phoenix. Any IT employee who has experience in a systems environment or prior education in computer science can apply to the Wells Fargo Information Technology College Program. Nearly 50 employees are participating in classes that are held one full business day a week in San Francisco and Tempe, Ariz. "The idea is to invest in our own IT professionals and help them develop new skills. The program helps build loyalty to the company," says Patricia Delich, who heads the program for the San Francisco-based firm. And, so far, the approach seems to be working. The annual turnover rate in the IT department is
				about half that of other firms in the region.
				7. Create a stimulating work environment. Companies that provide classes, workshops and seminars certainly will create a more stimulating environment for employees, but it doesn’t have to stop there. According to Essey, it’s wise to let workers enjoy the type of lifestyle they crave. "Take a page out of the manual of Silicon Valley companies, which offer flexible hours, casual dress, telecommuting, and an array of other perks. Companies that come up with innovative ways to engage IT workers are more likely to keep the people they have and attract the people they are looking for," he insists. In fact, he points out that current employees often serve as the best recruiters. Of course, it might take more than late-night pizza parties and wildly decorated cubicles to keep IT staff hanging around for the long haul. "People like to work in an environment that is interesting. Providing meaningful and exciting projects is one of the best ways to keep them engaged," says Morello. She suggests including IT managers in the planning process for key business initiatives. A person who is involved with enterprise planning, sophisticated financial analysis, business intelligence and other projects is likely to be far more content than a counterpart overseeing an endless stream of batch queries on a mainframe. Experts say that a shortage of skilled IT professionals isn’t going away anytime soon. In fact, Gartner Group predicts that the demand for IT skills and knowledge will continue to outstrip supply until at least 2003. "We have infused so much technology into the workplace that companies are desperately trying to catch up," says Challenger. "Ultimately, the organizations that create the best working conditions and attract the workers they need are likely to succeed. Those that don’t are likely to see their profits and business
				plans threatened."
				Samuel Greengard is a Southern California based business writer. He can be reached at sam@greengard.com. © 2002 The TemPositions Group of Companies