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http://www.networkworld.com/research/2006/100206-hiring-struggle.html

IT worker shortage

CIOs struggle to staff their departments with the right mix of technical expertise and business skills.

Feature By Lauren Gibbons Paul, Network World, 10/02/06

For Ed Albrigo, vice president of enterprise programs at Freddie Mac, the talk of a coming shortage in IT workers is more than idle chitchat. It's already here. In fact, Albrigo's IT staffing challenges date back three years.

Most of the $36.5 billion mortgage financing provider's operations are in McLean, Va., an offshoot of being chartered by the federal government 35 years ago. "Here in the Washington metropolitan area, we see a real squeeze for talent given that the federal government is here, as are a lot of telecom companies and Internet companies," says Albrigo, who now spends half his working hours on hiring issues.

To cope with the tight labor market, Freddie Mac decided this year to hire from other locations for its 300 to 400 open IT positions. About 1,600 staff in IT operations and development, or one-third of the company, will stay in the Washington, D.C., area, where they have always lived and worked. But Freddie Mac's new IT hires are likely to come from - and operate out of - Chicago, Dallas and Atlanta, where the company also has offices.

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This major change in Freddie Mac's IT hiring strategy reflects how hard it has gotten to find the right people with skills such as network infrastructure and application development, Albrigo says. "We've decided to look to these other markets to tap critical IT skills and do more of a distributed IT development," he says.

Click to see: Job growth

Freddie Mac piloted the strategy in Chicago by hiring a vice president to create the application-development arm for the loan prospecting group. With six new hires in Chicago, Albrigo expects to end the year with 150 developers situated there.

The pendulum has swung again. IT professionals who just recently began to breathe easy in their jobs after the bruising downturn at the beginning of the century are waking up today to find themselves hotly pursued once more. Salaries are up. Signing bonuses and competitive offers are back.

"IT workers are very bullish on their lots in life right now," says Bennett Ockrim, vice president at Spherion Professional Services, a provider of contract IT labor in Fort Lauderdale, Fla. "There is a renewed optimism."

Click to see: Ed Albrigo, vice president of enterprise programs at Freddie Mac

Ed Albrigo, vice president of enterprise programs at Freddie Mac.

Spherion's clients use the firm to pick up the slack for their long-term job openings, Ockrim says. The balance of power has shifted back to the employee rather than the employer, as had been the case for the past few years. "I've seen a rising wave of demand for the past six to 12 months. Without a doubt, it is an employee market right now," he says.

The heat is on

Across the country, companies are being squeezed by a tight IT labor market. Many CIOs say the shortage Network World foretold last summer has arrived. "Everyone in the industry is faced with that right now," says Gerald Shields, CIO at $14.4 billion American Family Life Assurance Co. (Aflac) of Columbus, Ga.

"I go to conferences with other CIOs, and it's pretty unanimous that we're all experiencing labor shortages," he says. With roughly 40 open jobs now, Shields is finding it difficult to fill roles such as senior database analysts, multiplatform systems programmers and network administrators who have real-world, enterprise experience. When the job slot remains open for longer than 60 days - he gets nervous, and he's often nervous these days.

Shields follows a no-holds-barred approach to hiring. "We use recruiters, we go to college campuses, we use the online services, we advertise, we do internal referrals, we have co-op efforts with colleges and universities," he says. Any avenue can turn up a potential winner, and he doesn't feel comfortable leaving any stone unturned.

Click to see: IT optimism upswing

With the talent pool getting tighter, it is natural to focus more on retention. Shields recently lost a valuable IT staffer when she received an unexpected offer she couldn't refuse. "When she explained the offer to me, I'm thinking, 'Golly, I wonder if she needs an assistant.'"

Nonetheless, Shields does his best to keep good employees. "Retention is always important because of the investment you make in people," he says. Like many other Fortune 1000 companies, Aflac offers its IT staff education and training, which are often cited as powerful means of keeping people. The key is to offer the one that matters to that particular individual, and that can be difficult and expensive to do. In this climate, that might be the price of retaining your best workers.

Coming down the line

When the talent pool gets tight, companies start putting more emphasis on shoring up the IT pipeline, says Laurie Orlov, vice president at Forrester Research. Orlov recently finished a study called "Is there a career future in enterprise IT?" based on a survey of 55 high-ranking IT executives. Most said IT was a viable career in the United States and would continue to be despite the offshoring of non-value-added technology tasks.

But even though senior IT executives like to give lip service to getting the word out to high school and university students that IT is a vibrant career, few actually get involved, Orlov says. "We asked if they promote IT as a career at high schools or colleges. Most didn't. They were a little rueful about it."

Shields is an exception. Although Aflac is in rural Columbus, he makes frequent trips to Atlanta and often stops by the local universities and colleges. "I go talk at the campuses, I send my [vice presidents] to do that. If there's a top student we're interested in, I'll take that person out to dinner," he says. "I try to increase interest in computer science programs. I'm investing in someone who I may not get as an employee five years from now, if ever. They may go to my competitor." But that is the cost of being part of this industry, he believes.

The technology-worker pipeline is always at the top of the Society for Information Management's (SIM) agenda - good times or bad. With Microsoft, SIM is sponsoring a program called "The Future Potential of IT." SIM and Microsoft executives present a four-hour program on campus to freshmen and sophomores who have not yet declared majors.

Click to see: Employment outlook

"The mission is to increase student awareness of enrolling in IT curricula and what to expect when you graduate," says Stephen Pickett, president of SIM and vice president and CIO at Penske in Detroit. The joint team has visited six universities this year; seven more are lined up for the fall.

There are some things you can do now to do your part to improve the U.S. IT worker pipeline, Orlov says. First, hire at the entry level. Many CIOs don't, because they feel they get more bang for the buck by hiring veteran professionals. That's a mistake, Orlov says. "Help make the case for the future of the IT career."

Companies that do hire entry-level people tend to leave them at the help desk - if they leave after 18 months because of burnout, so be it. This is another case of short-sightedness, Orlov says. "Develop a career path for your help-desk people. Integrate skill development into strategic IT planning," she says. Help your people get the negotiating, writing, communication, process analysis, project management skills they need to make a difference for the business.

"Programming is a commodity. You can get that from outsourcers," Orlov says. "We want people who can take IT out of the back room, work more closely with the business and help innovate the business based on their knowledge of business processes." Anyone who can step up to this heightened role need not worry about his job moving to India.

Orlov says other positive actions are: formalize an IT-business rotation; bring people from the business into IT and vice versa; create an IT-business co-mentoring program for potential leaders. "The ladder approach to the IT career, where you move up one step at a time, is over. The IT career is now more of a zigzag," she says.

In his multidecade career, Phil Zwieg, vice president for advocacy and communities of interest at SIM, has seen the cycle of not-enough/too-many IT people come and go many times. Zwieg retired last summer from his post as vice president of IT at Northwestern Mutual in Milwaukee. As he looks forward to taking some time off, the opportunities keep rolling in. "Folks keep calling and asking if I would be willing to do this or that," he says. For Zwieg, IT continues to be a viable and rewarding career, even postretirement.

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