Rethinking the IT career
Ian Stobie, Research Editor, Computing
Over the last six months more than 1,700 Computing readers have participated in a series of surveys, email polls and face-to-face discussions to find out what the future holds for people working in IT. Led by Kit Grindley, PricewaterhouseCoopers professor of Information Systems at the LSE, Computing's National Resources Survey has been the largest study of its kind ever conducted into the UK's perennially overheated IT labour market.
We have canvassed the opinions of both management and the technical professionals themselves about how they see skills requirements being met and their own careers developing. And we've also talked to those not directly involved in IT but whose organisations depend on it - from Chief Executives, Finance Directors and Human Resources Directors to specialist recruitment consultants.
The results are now in, and here's a summary of the main findings. In what follows we play down the statistical side of the study, which was partly covered in the interim report in Computing's 15 October 98 issue. Instead we concentrate on what readers' themselves have to say based on their own first hand experiences. One of the most welcome aspects of the study was how articulate IT people have turned out to be, and how ready to tell their stories.
The problem
All types of respondent that the skillsshortage is not likely to go away. While the end of some Year 2000 and EMU work may ease the labour shortage in some categories, the overall problem of there being too few skilled IT staff to go round is expected to remain even five years from now.
'No supply could keep up with the requirements surge, which is fuelled by the pace of change', one respondent told us. 'Plus we have to drag the old stuff along with us, a tail which grows and grows; we never dreamt of such longevity when we wrote those programs.'
'The demand for IT will not slow down', another agreed. 'But since it is fuelled by technology improvements it will always be concentrated in areas needing the skill sets in shortest supply.'
The possibility of a world recession, and of budget cutbacks, are not considered likely to reduce the demand - IT spending is seen as having 'a life of its own', irrespective of economic conditions.
So where are all the people to carry out all this work going to come from? As another respondent told us 'User expectations continue to diverge from any practical reality, given the staff shortage and poor training across the industry.'
The NRS study concludes that it won't be enough for firms to simply chase the same pool of people with increasing intensity or desperation. But there is a way forward if organisations understand the different types of skills needed for different IT jobs and tailor their recruitment and retention strategies accordingly.
The report argues that the IT staff shortage should not be considered a single problem. The NRS model categorises staff into four distinct groups, each with its own aptitudes, motivations and career goals. The basis of a solution for the IT industry's endemic staffing shortages is most likely to be found in developing separate recruitment and retention strategies for each category.
Traditional career structure dying
The main shortage was identified as being in the skilled programmer group. Here the report argues that the main problem is not the supply of new entrants - a good supply is available as long as arbitrary requirements of age and academic qualification are dropped in favour of straight aptitude tests.
The real problem comes later, in the lack of a proper career path for skilled programmers inside most user organisations. This isn't necessary the organisations' fault - it's simply a matter of where the bulk of IT jobs now are. There was widespread agreement among respondents that the era of large programming teams inside user organisations is coming to an end.
The conclusion has to be that skilled programmers are now most likely to find proper career progression, job satisfaction and high salaries if they move to a specialist software development company or 'outsourcer', or by becoming self-employed contractors.
However, not everyone wants to become a contractor, or work for the large outsourcing organisations where they might be hired out to anyone - and have to be prepared to work anywhere. 'They don't like working for the suppliers', one manager told us. 'It's tougher. But more and more are realising that's where they have to go'.
Morale under threat
Talking to skilled IT professionals, it was clear that many were not optimistic about their career prospects, despite the overall high demand for IT skills.
'Companies cannot provide a technical career path, only a management one. The only way to progress in-house is via management. But many excellent technical people are just not good people managers.'
This was backed up by a manager, who told us: 'I have no career opportunity or sense of belonging to offer these guys, and their salaries are an embarrassment'. He reluctantly uses outside contractors.
'Retraining is out', another skilled programmer told us. 'They think we'll leave to become contractors'.
This suggests that professionals may well accept that the demand for IT will be sustained, but that many think that they personally will be excluded from benefiting because of companies' unwillingness to retrain them to acquire the latest skills, or because of a general unwillingness to give older staff access to opportunities.
There was indeed a strong correlation between those expecting their career prospects to worsen, and those commenting adversely about ageism . 'I couldn't believe I was too old at 37' was one poignant comment.
A number of other factors seem to be sapping the morale of in-house programmers. The top threats cited were outsourcing, the greater use of packages, and of users developing systems for themselves.
Not paranoia
These fears seemed to be borne out in the responses we got from managers. 'Despite the acute shortage, it seems to me that increasingly strenuous attempts to recruit skilled staff will continue to outweigh training beginners, or retraining experienced staff,' one told us.
Indeed, the majority solution put forward by IT managers was simply to redouble efforts to recruit skilled staff - the very strategy that has led to the present situation. More than half those intending to fight for the available skilled staff plan to do it by increasing salaries, and about a third intend to use agencies. Again, the remedy is a repeat dose of the medicine that has failed in the past.
From the viewpoint of an individual company this strategy might work, but even among people pursuing it there are doubts. 'Chasing skilled staff is the preferred option - but it results in the newcomer's salary being considerably higher than those of the IT people already in the company, which means their resentment. They then leave for better jobs and the circle becomes vicious and unsustainable. Unhappy employees opt for the contract market, agencies prosper, traditional software houses die.'
Outsourcing
The next most popular strategy cited by IT managers was outsourcing to specialist companies or using contractors. Again, there was plenty of cynicism about whether this strategy makes much sense when adopted on a large scale. 'Outsourcing won't work of course, since the outsourcing companies can only increase their staff at the expense of clients decreasing theirs.'
What's more, the smaller the programming department becomes through outsourcing, the harder it is to attract permanent staff. 'Once you lose critical mass, they see there's no future. They're better off working for contracting firms, or software developers.'
The strongest criticism of outsourcing was that companies could not manage it unless they still had good IT skills themselves. The 'edict to outsource' can mean you lose control, according to one respondent. You can 'get to the point where you don't know what's going on in your huge life support system'.
Employing contractors on an individual basis also came in for much criticism. 'Contractors are more difficult to manage. They have hidden agendas and are careful not to live with the problems they create', one manager told us. 'I hate outside contractors with a passion', said another, who nonetheless found himself forced to use them.
Retraining
Retraining was not felt to be a likely solution for dealing with the skills shortage. Few managers cited it as their main their main strategy, and only 4% of skilled IT professionals thought it was likely to be offered. A third of HR Directors thought that technology simply moves too fast for re-training to be a viable option.
Nonetheless, IT professionals want retraining, and frequently complained about not getting it. One told us: 'What needs to be encouraged is recruiting experienced people and retraining them in the specific skills required. There is an highly experienced workforce trying to get back to work.'
But professionals seem resigned to the idea that management will not adopt this course. 'Companies don't invest in training. They recruit specific skills.'
The problem is not the cost, according to another respondent, but the time involved 'You can retrain an experienced programmer in a new language for less than the overall cost of training a novice. But business is driven by short term profits. Retraining means an investment with too slow a return'.
Paradoxically, technology change creates the need for retraining, but can prevent it happening. The fear is that 'any training investment would be wasted, because it's soon obsolete. And if it isn't, they're immediately poached by other companies'.
Increased use of packages
The third most popular strategy cited by managers, and the number one solution predicted by skilled IT professionals themselves, was the increased use of packages.
From an industry point of view, the package strategy puts more of the burden of recruiting and training programmers onto IT suppliers, who are probably better able to cope, on the presumption that they have bigger permanent programming teams and bigger staff budgets.
But comments from the people going the package route showed that it was often a reluctant choice, with even its advocates aware of the problems.
'Packages are the only answer, due to the climate of wanting answers yesterday. But it's a shame, as packages create more problems than they solve', said one. Another respondent pointed out the hidden costs of 'integrating packages with the business, and with other packages, and modifying them because their functionality is too little or too much'. And yet another warned of business risks along the package route: 'It's a great idea until the world suddenly changes. And a guy with a green-field site knocks the hell out of you.
All the same, many large companies stated they had already embarked on a programme of strict software standardisation. 'We do things once for the world.' 'We've standardised to the nth degree', said another.
Exploiting the shortage
A minority of companies had an entirely different approach. For them none of the compromises and second-best measures adopted by others. These companies, all financially well-endowed and blessed with a large IT war chest, welcomed the shortage of IT staff as an opportunity to make use of their resources to beat the competition.
'We plunder the opposition with gay abandon', reported one respondent. 'Fighting over scarce resources is a traditional way of competition. Our primary source is from our competition. This leaves then short, and gives us skilled IT staff with a knowledge of the business.'
The same companies often also rejected the package strategy, preferring instead to develop novel IT systems that gave them some competitive advantage.
Interestingly, a respondent in the less-well-off government sector was also aware of this possibility. 'We will see a polarisation between organisations prepared to compete to recruit competent staff, and those who are forced to adjust their ambitions by using personnel with no more than customer support skills, settling for standard solutions. It doesn't require a crystal ball to see that the public sector are likely to be amongst the hardest hit.'
This respondent went on to predict: 'In true civil service style, they will imagine they can cope by offering attractive retraining packages to non-IT staff - who then, of course, can't be seen for dust'.
Finger of blame
The most depressing finding of the survey was that, whatever strategy they expect to use to deal with the staffing shortage, over two-thirds of managers believe the problem will either remain the same or actually get worse.
According to some respondents, this situation is mainly the fault of the speed of technology change imposed on the market by the suppliers. 'The skills shortage is manufactured by the big software suppliers, who make things different, when all we want is for them to be better.' Another: 'I don't expect the IT staffing problem to be overcome while suppliers rather than businesses drive change.'
Is programming a long-term career?
Although IT people have a reputation for job hopping, a very considerable number in the skilled IT professionals category settle for long-term stays with one employer. Among NRS respondents in-house staff had an average length of stay of 4.4 years, compared to just under 11 months for staff in the contract category.
What's more, nearly half of all the IT professionals want to stay in the profession for the whole of their careers. A further third want to stay for 10 years and more. The scope for re-training, if it is practical, is clearly enormous.
The aspirations of so many IT staff to make a career in the profession appear to be best satisfied by joining software houses, systems development organisations or by working as self-employed contractors. Less than half the Human Resources managers believe satisfactory career opportunities can be offered to Programmers or Systems designers in user companies.
The problem can be merely one of integrating programmers into the corporate salary and promotion structure. But although this might seem simple to fix given the will, many organisations seem unable to do this. 'Once they're trained, they're worth ten grand more,' according to one IT manager. But getting his HR department to accept such a wage sudden wage hike was impossible, so once trained, his people left.
Another senior IT manager related this sad story: 'Terry was our best man. In his fifties, he knew it all - been there 20 years. When contractors came in at twice his pay he asked for a raise. "Afraid not", they said. "Upset the pay structure". He left. The agency put in three staff to replace him. But the result is we can't play around with the legacy system anymore'.
It does seem genuinely hard for some HR and general managers to grasp the contribution a skilled programmer can make. Some respondents hoped that the Year 2000 problem might have brought home to top management how vital IT is to the organisation. But there's no doubt that many in the skilled programming group still feel unappreciated.
'There's no future for programming in-house, because there's no esteem in it. The only place you'll get esteem is Microsoft. It's also where you'll get the money'. And again, 'A career in a user organisation is dying. Its time has gone'.
IT management, particularly the new breed of more business-oriented IT management, were also criticised for their lack of understanding of how to lead skilled technicians. 'Management don't know what to do with techies. If I went, all my techies would go too. I've programmed all my life - I'm the only one there who can run them'.
The good life now
While it's true that the NRS survey turned up overwhelming evidence of pessimism among skilled programmers about their long -term career prospects, it would be wrong to give an overly bleak picture about their lifestyle now. After all, these people are in a much-in-demand group and are generally very well paid by the standards of most other professionals.
And it appears that many have been able to find jobs where they are happy. Some have negotiated very flexible terms and conditions - and some report they've even won the esteem of management.
In reply to the question 'What, apart from money, keeps you in your present job?', 49% mentioned career development, 37% corporate appreciation of IT and 28% quality of life
Many defined career development as getting new experience rather than formal training or promotion. 'The golden rule is stay as long as you're learning new stuff', said one. 'I'll stay while I keep learning', said another.
Among the quality of life issues, low stress and freedom from having to participate in company politics were most mentioned. 'They don't harass me at work. The bosses leave me alone to do what they pay me for. When I start getting involved in too many meetings it's time to move on'.
For some the ability to fit work in with domestic arrangements is what matters. 'For the last 20 years I have worked for the same organisation five miles from home. I've seen my children every day'. Another said: 'I work mainly from home. It's the freedom of working as and when I chose I appreciate.'
Time off is also an important factor. 'The money earned by a programmer on contract is enough to allow a lot of time off' points out one respondent. Another values 'plenty of holidays, and not being pressured into taking pay in lieu'. One lucky punter reports: 'I have managed to get an eight-week sabbatical to go snowboarding in Canada this winter'.
Given the question asked, these benefits clearly work. According to the programmers themselves they succeeded in making them stay.
However, to give the full picture, it must be related that in our discussions with managers very similar stories were told in scandalised tones. 'He wanted eight weeks off to travel the world', 'two days off each week to take a history degree', 'three days working at home' said a third.
Clearly management does need to decide in advance how much it values hard-to-get IT staff so it can respond in a well-thought-out way to such demands. Individually-tailored non-monetary rewards may be hard for the organisation to swallow, but if the person really is worth retaining they may ultimately be more cost-effective than simply offering money.
The big fear of HR departments is that special treatment sets bad precedents. Yet people already accept massive salary differentials in most companies with hardly a murmur.
Agenda for Action
The NRS study identifies four categories of IT staff, and goes into their different character attributes in some detail. The idea is that by understanding their motivations and career ambitions it is possible to work out how best to recruit and retain them.
1. Skilled programmers
Those in the Skilled Programmer category are driven mainly by interest in their work and the respect of their technical peers. The opportunity to develop their careers through exposure to new technology is also important. They have professional rather than political ambitions.
Skilled IT staff are in a strong bargaining position, and so will expect a competitive remuneration package. But it's important not to overlook non-monetary motivations. The NRS study identifies two sub-groups, possibly based on age or domestic circumstances. One group - the 'hedonistic travellers', value their freedom and ability to move on. If they don't become contractors they may press their employers to provide longer holidays, lengthy sabbaticals or job transfers.
The second group, the 'domesticated stayers', greatly value conditions of employment that fit in well with their private lives. Convenient hours, short travel times or flexibility over time off to deal with family commitments will keep these people loyal more than money.
2. Customer support
Customer support staff are driven by job opportunity. Interesting work, with some opportunity to learn, plus an attractive work location are important. Many of this group also fall into the 'hedonistic traveller' category. Departmental and job rotation may enable these staff to exercise their people skills and maintain job interest without leaving the company.
They are generally much less well paid than the first group, so extra money is still likely to still be a powerful incentive. However, it's not difficult to train up new people, even school-leavers, for most support roles, so their bargaining power is limited.
3. Business analyst
The Business Analysts category will be staffed by people whose motivations most resemble those of those in non-IT management. Though expecting good pay, they are the easiest category to manage using strategies familiar to the HR department.
4. Project management
Two types of staff are particularly important in IT Project Management - the technical team leader, and the more political, people-oriented mover and shaker. Finding a individuals who can combine both roles is likely to be difficult, so organisations may be better off recognising this and making sure they have two compatible people working in tandem at the head of major IT projects.
Both types are mainly driven by the achievement of project objectives. In IT projects these are often much clearer and more challenging than those provided in general management, and thus much more motivating. However, once they are achieved motivation can collapse. The key is avoid the team breaking up too early once the primary objectives seem to have been achieved.
Other options
The only alternatives to finding the staff is the rationing of IT provision or some kind of outsourcing. Rationing - or demand management, can be a viable strategy in some circumstances. The key thing is to correctly identify when cutting your ambitions to fit the available resources makes sense, and when on the contrary the correct strategy is to spend what it takes to achieve the best.
This distinction between 'cut to fit' and 'spend to win' strategies is as important as the much more widely recognised 'core' and 'non-core' distinction used to justify outsourcing decisions.
Copyright 1999 VNU Business Publications, 32-34 Broadwick Street, London W1A 2HG
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