IT workforce development: Losing the numbers game

Editor's note: The following article is Part I of a three-part series on information technology workforce development. Subsequent parts of the series will address what business organizations and educational institutions are doing to address the continuing IT worker shortage.

Milwaukee, Wis. - John Psuik isn't sure whether expanding into new markets will significantly impact the growth of his company, Developer One Software, but if exposure in European and Asian markets results in a surge in the sale of its mobile software products, a surge that necessitates expanding his seven-person staff, he wonders if he could find enough people with software design expertise in southeastern Wisconsin.

“My biggest challenge would be finding people in the region with experience,” he said.

Part of that is the result of Wisconsin lacking the critical software mass of Silicon Valley, but a large part also is due to the declining number of people pursuing information technology careers.

IT workforce

Psuik isn't alone in worrying about how the shrinking IT workforce inhibits business growth.

Shirley Ann Jackson, president of Rensselaer Polytechnic Institute, is among those who have called it “The Quiet Crisis.” Jim Rice, former president and CEO of the Information Technology Association of Wisconsin (ITAWi), calls it “the 800-pound gorilla in the room.”

Fundamentally, there simply are not enough students in the pipeline to replace the technologists that soon will be retiring in droves, and with computer science enrollment dropping precipitously, IT jobs are either being unfilled or are taking long periods of time to fill.

As a result, businesses are having difficulty finding creative problem solvers in an era where “IT genes” exist in just about every job, even those that seemingly are irrelevant to technology.

Robin Pickering, a recruiting manager for Manpower Professional in Milwaukee, said the talent shortage started several years ago when colleges and universities experienced a dip in the number of students going into computer science and engineering.

“I'm going to bring up engineering in some sense because most universities, within their departments of engineering, include computer science,” Pickering said. “Computer science is where the application-development side, the embedded side of development, is. There are simply fewer students who are migrating to the IT field.”

Several culprits have been cited. Certain segments of the media are blamed for the way they covered the dotcom bust, which coincided with the start of declining enrollments in the STEM (science, technology, engineering, and math) disciplines, and their inability (or unwillingness) to cover issues like offshoring in their full context. The coverage has played a role in creating the myths that IT salaries are low and all the jobs have been moved overseas.

Meanwhile, K-12 education is blamed for gradually eroding the creative imaginations that children are born with, making it less likely they will pursue IT careers or contribute to a culture of innovation within companies.

Wherever the finger of blame is pointed, the responsibility for addressing it is shared.

“It's an awesome problem that we have to deal with,” said David Cagigal, chief information technology officer for Alliant Energy Corp. “We all own this issue, business, government, all of us.”

Double whammy

The IT workforce shortage, which is global in scope and part of an overall labor shortage, already is hitting employers on the young end, but it could soon create problems on the mature end.

Regarding the younger generation, the numbers are hardly encouraging. According to ITAWi, which was formed to help develop the state's IT workforce, college-educated (skilled) workers in all fields will decrease nationwide over the next 13 years. An estimated 46 million Baby Boomers with a college education will retire by 2020, and will be replaced by 49 million college graduates who will enter the workforce. However, about 12 million new skilled positions will be added overall by 2020, leaving a gap of nine million between the number of skilled positions available and the number of college graduates available to fill them.

This makes it even more imperative to reverse declining enrollment in the STEM disciplines. Although employers find IT workers in a variety of disciplines, it's worth noting that the Higher Education Research Institute at the University of California at Los Angeles has tracked the decline in the percentage of incoming freshman students who list computer science as a probable major. That percentage dropped from 3.5 percent in 1999 and 2000 to about 1.1 percent in 2004, including declines of 6.5 percent to 2.5 percent among men, and about 1.1 percent to about 0.3 percent among women.

On the other side of the generation gap, the trend is more troubling due to the potential loss of skills. As mature workers in IT and other categoes retire, several CIOs have noted that companies will be scrambling to replace a lifetime of experience and business knowledge. Unless they find ways to adapt, including some form of post-retirement retention or the mentoring of would-be successors, their pending retirements will leave gaping skills gaps.

Of the workforce trends that Manpower has tracked in recent years, the pending retirement of Baby Boomers is the one that should get the most attention of employers, according to Rick Davidson, senior vice president of global information services for the Milwaukee-based employment services firm. And the impact could be right around the corner. "Some are estimating that 10 million in the U.S., and those aren't necessarily all IT people, but by 2010 we'll have 10 million positions that we can't fill," Davidson said.

Perception problem

This shortage will come as the complexity of technology threatens to overwhelm business organizations. Yet according to ITAWi, the perception among youth, parents, and counselors is that demand for IT will decline in much the same way manufacturing has. This misperception exists even though IT costs are more closely linked to human intellectual capital, which will be in ever-increasing demand.

Even as the offshoring of mostly low-paying IT jobs continues, other opportunities have developed on the high end. A 2005 University of California-Berkeley study on offshoring and outsourcing found that while more than 70,000 computer programmers have lost their jobs since 1999, more than 115,000 higher-paid computer software engineers have landed jobs in that same period. While the figures don't represent overall IT job losses or gains, they do indicate that new opportunities are emerging.

In Wisconsin, six technology-related occupations will rank among the 15 fastest-growing occupations from 2004 to 2014, and five of the six will pay more than $50,000 annually, according to projections from the Wisconsin Department of Workforce Development's Office of Economic Advisors. The job categories, number of new jobs by 2014, and projected average salary, with a bachelor's degree, include:

• Network systems and data communications analysts, 2,020 new jobs, $56,789.

• Computer, software engineers, applications, 3,650 new jobs, $70,386.

• Computer software engineers, system software, 1,150 new jobs, $76,324.

• Network and computer systems administration, 1,890 new jobs, $56,246.

• Database administration, 540 new jobs, $61,299.

• Medical records and health information technicians, 1,230 new jobs, $28,976.

To spread the word about emerging growth opportunities, and combat the lingering media template that off shoring spells doom for IT careers, ITAWi is preparing a public awareness campaign to dispel the myths. Rice said the campaign will be targeted to a youthful audience and will be delivered with frequency and consistency.

Owning the gap

Tom Koulopoulos, founder and CEO of the Delphi Group, a Boston-based business and technology thought-leadership company, said work associated with laying the IT infrastructure is what's going offshore as American companies attempt to reduce their cost base, but he added that U.S employers now have greater demand for IT systems people.

“Once you pour the infrastructure, the real development will begin,” Koulopoulos predicted. “I'm worried that we won't be equipped to take advantage of it because we won't have the skilled people to compete. I see that as a real threat.”

Koulopoulos estimates the IT development boom will be at the world's doorstep in about 10 years, if not sooner, and some forward-thinking society will own that “IT skills gap.”

Whether that society will exist within the United States will depend on actions taken in the private sector and in education. In Part II of our IT workforce development series, we will examine what Wisconsin companies are doing to bridge the gap.

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• Merge offshoring jobs to "more cost-effective" workforce

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