Easing the
^labor crunch

"I turned down a 70-percent pay increase because my department and my manager inspire loyalty among their workers says a senior analyst at an East Coast Fortune 500 company.

At a time when the Information Technology Association of America (ITAA) estimates that there are 346,000 IT jobs unfilled in the United States, what wouldn't an IT manager do to hear those words?

Any effort IT managers can make, from bigger work spaces to a good training program, counts a lot.

"It's the intangibles the analyst says. For example, his department allows workers to telecommute some of the time and has flexible work hours and comp time. He also gets to work with leading-edge technology.

If you are worried that you may not be this lucky next time one of your employees gets a job offer, you have plenty of company.

"I have yet to walk into a large IT shop this year and not have them mention that the labor shortage is a critical issue for them" says Malcolm Slovin, a service director at the Meta Group, in Reston, Va. No area of IT is spared: The list of skills in demand ranges from programming to business expertise to network management. (See the chart.)

Options for dealing with the labor shortage fall into two basic categories: Recruit and retain more workers, or change the way you work so you don't need as large a staff.

Your first priority should be to keep the employees you have, experts say.

"There's so much opportunity out there that people are very comfortable about looking somewhere else, and once people start thinking about it and looking, it happens," says Gale Fitzgerald, chairman and CEO of CTG, an IT services company in Buffalo, N.Y. >>

"We've got a fun work environment that's focused toward getting the job done but enjoying yourself while you do it," says John White, manager of enterprise computing for Cluett-Peabody. "Two-hour lunches are not unusual, but neither are I 0-hour days. We're going to the best steak house in Atlanta in two weeks and taking the whole department. That's cheaper than paying one headhunter once."

TRAINING INSIDE AND OUT.
Giving employees an opportunity to learn is another way to retain - not to mention improve a good staff. In a CIO Institute Poll of system administrators and network specialists, training was the most frequently mentioned way that respondents said their employers could make them want to stay. (For more on training, see box, right.) "if their bosses won't get them the education they need, they're going to look for someone who will," says Alan PaBer, director of education and research at the CIO Institute, in Bethesda, Md.

When employees do leave, or when you need to expand your staff, you can redouble your recruiting efforts. But although this may help fill certain positions, it won't solve the industry-wide problem of too few workers for too many jobs.

"The recruiting side is a zero-sum game," Fitzgerald says.

Because of this, some companies are expanding their searches to include workers who previously might have been considered unqualified.

"We've been able to find people," says an IT manager at a Midwest insurance company. "Are they exactly what we want? No, not 100 percent." indeed, critics say the labor shortage would not be as acute if companies were willing to hire people whose IT skills aren't up to date. But training workers in IT isn't always as easy as sending them to a Windows 95 administration class and putting them to work.

Therefore, managers need to spend their training budgets wisely. >>

Stfll, training new recruits or current employees to fill key positions, especially those involving new technologies, may be easier than finding someone with the skills you need.

"In today's world, no one's going to have the precise skills," says Paul Kostek, president-elect of the IEEE-USA, in Washington. "Things are changing so quickly. A few years ago HTML was the hottest thing in the software world, and now you've got that automated."

EXPANDING THE POOL.
Consulting company Lante (whose president is InfoWorld columnist Mark Tebbe) has tried this tactic.

"We've taken the approach that we really hire for character and train for skiu," says John Hack, consulting manager at Lante, in New York. "We've found that that really works."

Expanding your definition of qualified applicants may yield some unexpected benefits.

"I think there's a very large untapped well of business people who have decent IT skills who can not only bridge the labor gap but help companies by bringing in some much needed business skills," the Meta Group's Slovin says.

Hiring interns from a local university can further expand your pool of potential employees. (See "Interns can bring relief to IT labor shortage," Dec. 15, 1997, page 87.)

Looking overseas continues to be an option. Some companies do this by opening satellite offices where workers are available; others hire contractors.

"Companies need to understand what the labor pools are around the world and how they can move work around the world," says Howard Rubin, chairman of the computer science department at Hunter College, in New York, and head of the ITAA's task force on quality and productivity issues. "That's probably going to be a model for the future because we have a global economy."

But most market watchers agree that this is not a complete solution to the labor crunch. The United States isn't the only country with a shortage of skilled workers right now - European countries, for example, need workers to handle both the year2000 problem and the euro conversion - and the supply of overseas workers isn't inexhaustible. >>

Outsourcing some IT functions is one way to do this. If you outsource mundane tasks and keep the interesting development work in-house, you can keep your current employees more interested in their jobs. However, it's important to realize that the decision to outsource has implications beyond simply solving a staffing problem.

"You could be walking from one problem, which is the labor shortage, into another, which is not being able to get the service and quality you need to meet your business goals," Slovin says. (For more on outsourcing, see "Outsourcing options expand," Oct. 13, 1997, page 1 0 1.)

SHOPPING FOR SKILLS.
Some IT departments are turning to off-the-shelf software packages instead of developing their own software. But like outsourcing, using packaged software can cause problems as well as solve them.

"You're trading one set of skills, custom development, for another, systems integration, which is just as hard to find," Slovin says.

Managers also need to increase both the amount and the quality of their IT staff's work. A focus on measurement, project management, and quality assurance is the first step toward increasing productivity.

Once you figure out exactly how your department spends its time - for example, if you discover that a lot of it is spent fixing mistakes - you can find ways to spend the time more wisely. Well-targeted training can also help improve the productivity of your staff.

"[The United States] maybe one of the top two or three quality producers in the world, but we're actually one of the lowest in productivity," Rubin says. "Most companies don't have any quantitative information about their performance, so they have no way to get control over it."

For most IT shops, the ultimate solution to the labor shortage will probably be a combination of these tactics - and a few more.

"What we're doing as an industry is trying to deploy the limited talent we have in the most effective way possible," CGI's Fitzgerald says. "Companies have to do that too. We have to be a little more creative. People get very boxed into what they think they can do and should do." <<