Between 2010 and 2025, an estimated 77 million baby boomers will exit the U.S. workforce, as those Americans born between the years 1946 and 1965 will begin to retire in droves.
“There is a fear, widespread amongst IT management, that there will not be enough skilled workers available to replace the boomers,” said Edward Gordon, author of 2010 Meltdown: Solving the Impending Jobs Crisis.
What is behind this fear? The fact is that the mass numbers of retiring IT professionals represent only half of the supply problem. Recent data suggests there is simply not enough young skilled IT talent available to fill the gap. According to Cisco, the number of students seeking computer science or IT degrees has dropped by roughly 40 percent during the past three years.
Gordon estimates this combination of massive numbers of IT workers leaving and fewer young people trained to enter the field will result in between 500,000 and 1 million IT jobs becoming vacant between 2010 and 2020.
Why are young people not considering careers in technology as much as they did before the dot-com bust in 2001? Because, according to Gordon, “their parents are telling them, ‘Don’t get into this.’ They are telling their kids to seek more professional degrees like law and medicine.”
Parents are steering their kids clear of technical education because of the outdated notion that IT jobs are all being sent overseas, despite the most recent data suggesting otherwise: According to a September 2006 study by the Society for Information Management, only 3.3 percent of 2007 corporate IT budgets were allocated to offshore outsourcing programs. Years of bad press about layoffs and outsourcing have created the perception among the general public that there are no jobs in IT. In reality, five of the top six fastest growing occupations in the U.S. are IT jobs, according to the latest data from the Bureau of Labor Statistics, and companies like Cisco have declared the IT worker shortage to be its number one prohibitor of future growth.
Is the IT Community Prepared for the Labor Shortage?
Despite the sobering statistics pointing to an IT skills crisis during the next 20 years, the IT community does not appear overly concerned. A recent survey conducted jointly between Buck Consultants, WorldatWork and Corporate Voices for Working Families suggests the technology industry is much less likely than other industries to see the loss of skilled workers as a significant challenge. Only 23 percent of respondents from the technology industry see the aging workforce issue as significant, compared with 66 percent from the health-care sector and 65 percent from the oil and gas industry. Even more alarming, according to the survey, is that more than 80 percent of respondents have not even surveyed workers approaching retirement age to determine their intentions, and 42 percent have not identified who within their company would be responsible for the transfer of knowledge from retiring employees to potential replacements.
The feeling among many CIOs, as reported in CIO, is that the aging workforce issue is merely hype and the potential skills shortage problem is still many years away. Steve Kraus, CIO of Chattanooga, Tenn.-based Olan Mills, said, “Our nearest retirements are 10-plus years away at this point.” Kraus is more concerned about losing skills to forced layoffs than retirements.
Even many baby boomers themselves are not so sure the issue is as severe as IT analysts claim. They feel there are many boomers out there who wish to keep working after retirement, but complain that CIOs don’t want them because their skills are not fresh.
The prevailing view of IT executives is that technical skills can be learned relatively quickly by a new hire or simply can be outsourced. But can today’s complex IT skills really be learned that fast, and is sending work offshore to fill the looming skills gap really an option?
While entry-level skills such as desktop support, end-user application skills and hardware repair can be found in abundance, more intermediate and high-level skilled workers are becoming rare as the baby boomers retire. As a result, there is already a major shortage of high-end engineers, developers and project managers. As Richard Cole, founder and CEO of Geeks On Call America, put it, “The infrastructure and complexity are growing faster than the technician base, especially in the mid level and at the high end.”
High-level IT skills cannot be trained overnight. As technology becomes more complex, it often requires years of experience and in-depth, on-the-job training.
Is Global Outsourcing the Answer?
According to Gordon, simply filling the gap by outsourcing jobs overseas or increasing the number of H-1B visas to help fill the shortage of skilled workers will not be the quick fix it once was. The reason? “As wages and demand for technical talent grows in developing economies like China and India, more of these immigrants are returning to their countries of origin,” he said. These workers will not necessarily be inclined to work here anymore. “Thus, raising the number of H-1B visas is not necessarily the answer to the labor shortage issue,” he said.
As wages rise in emerging economies, many developing countries are beginning to experience their own shortage of skilled workers. “Though China graduates 400,000 engineers a year from its institutions of higher learning, only 100,000 of them are educated at world-class standards,” Gordon said. “And in India, investment firm Goldman Sachs predicts a shortage of 500,000 qualified IT workers by 2010.”
There is a silver lining to this problem, though. According to Gordon, companies in developed countries, due to a shortage of workers in their own countries, are looking to relocate to the U.S. He warns, however, “American workers must be retrained to produce their product or service.”
Need for Business Skills Is Most Pressing
While the debate rages about the severity of the coming IT skills gap, most experts are in agreement that there is one area within the IT industry that will be hard hit by boomer retirements: business skills. Most in the IT community agree that technical skills can be learned, whereas business skills are already in short supply and require years of real-world experience to acquire — a unique skill set that IT veterans in the boomer generation are more likely to possess than their younger counterparts.
“IT managers, project managers and business analysts typically have between 10 and 15 years of experience, and thus have developed an intimate knowledge not only of a company’s systems, but also of their organization and how things get done,” said Andrew Hazen, founder and president of Kansas City-based business skills consulting firm Knowledge 4. “This is the type of knowledge that comes only through years of ‘down in the dirt’ experience, and these are the skills that the younger generation of techies simply do not posses. These are not the type of skills that can be trained in a short time frame or learned in college. Companies will need to train younger, mid-level managers these skills over the course of years in order to prevent a looming disaster as the more experienced boomers retire.”
Hope for Those New to the IT Industry
With massive numbers of IT professionals retiring and a dwindling numbers of college grads and skilled foreign workers available to fill the shortage, the coming decade will no doubt present unique opportunities for those new to the IT industry, as well as for existing entry-level IT professionals wishing to move up within their companies.
Many big name, Fortune 500 companies have already put strategies in place to help attract young people to the IT industry. Best Buy, for example, offers weekend internships to high school students. The program allows them to earn foundational certifications like A+, Network+ and Server+. By offering flexible summer and weekend work hours, the hope is that Best Buy will be able to retain the technicians even after they start college.
Cisco is offering similar internships for its existing technicians, allowing them to intern for Cisco Partners after one year of attending their Networking Academy. This unique program teaches the intern not only technical skills, but business and other soft skills as well. Microsoft has created programs to develop skilled workers in high risk populations.
How to Fill the Looming Skills Gap
While the statistics certainly present a bleak forecast of the future IT workforce, there is still hope that the crisis can be prevented. Companies can help head off the crisis by adopting some of these succession planning strategies:
- Train and promote from within: By far the most important thing employers can do to prevent the coming IT skills crisis is continue to educate their workforces. Companies need to identify who within the organization is going to be retiring within the next several years and train someone within the organization to replace that employee. This involves mentoring, coaching and real-world testing (e.g., when the future retiree goes on vacation, the potential replacement employee fills in for the week). Kansas City-based Truman Medical Centers recently launched a program to identify people who are ready to be promoted into roles with greater responsibilities. Eleven people were paired with executive mentors and were required to complete a strategic real-world project.
- Retain older workers: According to the Buck study, 93 percent of aging workers want to remain in the workforce, either full time, part time or through consulting (mostly for financial reasons). According to Gordon, “companies need to retrain older workers in new technical skills sets.”
- Find and train new talent from depressed industries: Many sectors of the economy are currently experiencing a slump: the mortgage, pharmaceutical and automotive industries, just to name a few. Companies from fields such as these are filled with qualified individuals, who, with a little technical training, can be huge assets in the IT arena.
- Offer recruitment bonuses: Nothing talks like money. Offer existing employees a bonus for landing a new recruit. Companies that offer $4,000 or more in referral money have had tremendous success in filling badly needed positions.
- Look beyond the IT industry for new recruits: According to WorldNetDaily, the coming labor shortage “will be so severe that employers will be offering IT training to non-IT personnel in order to fill the critical jobs they cannot fill with experienced tech workers. In fact, this trend has started already in some of the Fortune 500 companies, where administrative assistants are being sent to computer training to handle some of the systems administration tasks that would normally be handled by the IT department.”
- Attend college career fairs: While tech giants like Microsoft, Cisco and HP are recruiting talent at college and other career fairs, the presence of smaller- and medium-size companies is virtually nonexistent. If young people are told the true story about opportunities in IT, they may begin entering the field again in numbers reminiscent of the ’90s.
- Find partners: There are plenty of online forums that provide marketplaces for locating contract IT workers. Massachusetts-based OnForce.com allows companies to find qualified IT professionals throughout the U.S. Since starting in 2004, the company has already completed more than 500,000 work orders.
There is no denying the next two decades will present challenges to firms seeking continued growth during an expected IT worker shortage. These challenges, however, will present unprecedented opportunities for those IT professionals wishing to move up within the IT ranks, as well as those wishing to enter the field for the first time. If companies begin their succession planning now and utilize new techniques for finding fresh IT talent, the looming crisis can be avoided, or at least result in a soft landing.
Matt McGrath is senior education consultant and certification specialist at Kansas City, Mo.- based Centriq Training. He can be reached at editor (at) certmag (dot) com.