Madison, Wis. – Ed Gordon believes the labor pool is out of whack with the labor marketplace, and he has written what he hopes will become a wake up call for American employers and workers.
In the view of Gordon, author of The 2020 Meltdown: Solving the Impending Jobs Crisis, the forthcoming IT workforce shortage is a legitimate worry. Millions of Americans who are unemployed do not have the right talent for the jobs that need to be filled, with many people earning college degrees that are not translating into decent employment. There now are four million jobs empty, Gordon said, and half of them are highly skilled positions that require specialized technology training and education.
“The issue is that the labor market is out of sync with the realities of the global marketplace with the jobs we are creating and the jobs that are disappearing,” Gordon said. “This is a problem all over the U.S. and most of the developed world.”
Gordon is not the only one sounding the alarm. Melanie Holmes, vice president of World of Work Solutions for Manpower, said in early 2007, 41 percent of the American companies Manpower surveyed said they were having trouble filling positions – not just in science and technology, but also across the board
“That is a historically large number,” she said.
Convergence of forces
Gordon said the situation is being exacerbated by specific social and economic forces converging at the same time. The most prominent is that technology is becoming more pervasive in every facet of life, and since technology is complex, people use it in ways that support or create new products and services.
If there is one mitigating circumstance regarding the IT worker shortage, it’s that companies are loading up on technology and they want fewer workers to do more. The trend is offset somewhat by the increased efficiency enabled by technology, but that requires talented people. They must be highly literate, and they need specialized technology training.
“Only 25 percent of the workforce comfortably fits into that category, but 75 percent of the jobs we’re creating demand it,” Gordon said.
Those other 75 percent, many of whom are high school dropouts, don’t have the right talent mix. Some were trained in old technologies that now are obsolete and have gone away. Some have college degrees, but they are degrees in communication, finance, and marketing, where there already are far too many people for the number of available jobs.
At the same time, we have too many “techno peasants,” who Gordon characterized as people with low levels of literacy, plus no specialized career preparation, who are confined to low-wage jobs for the rest of their lives. Until last 20 years, there were fairly good-paying jobs, mostly in industrial settings, that did not require high levels of literacy. Those jobs since have gone by the wayside, and new technology requires higher levels of literacy, specialized skills, and career preparation.
With that in mind, Gordon believes society is divided into three groups.
• Smart people with right talent who keep their skills up to date through networking, seminars, and simply reading books. These workers keep shifting. Most mature workers are not doing the exact same things they did when they were young, and so they had to update their knowledge and apply it in new ways. Given the increasing complexity of technology, this trend will continue to accelerate because people will need more education, not less.
• Younger people who have been steered away from technology fields. In 2010, a tsunami of 79 million Baby Boomers will start to leave the workforce, and about 60 percent of the jobs that must be filled now are occupied by Baby Boomers that will need to be replaced. Many Boomers have the technical skills to keep the economy running, and they represent a larger cadre of people with more technical skills than the generations behind them, who were told that tech jobs weren’t cool and don’t pay enough. “They love technology – they eat it and breath it,” Gordon said, “but they don’t want to design it, make it, repair it, or manage it. The sad part is we need a certain proportionality of these generations to become involved.
• Imported models. American companies used globalization to get rid of low-pay, low-skill jobs that could be done elsewhere, especially India. In addition, U.S. companies have hired high-wage, high skill people they have not found in the United States, and they have imported foreign workers with H-1B visas to fill positions in STEM (Science, Technology, Engineering, and Math) careers. The challenge will be that the countries America is importing from are becoming richer as their own economies develop. These imported workers are being called home, especially as wages rise, where they can earn more money and be with their families.
Still more labor competition will come, Gordon said, when Europeans move production facilities to the United States because they can’t find enough workers.
Communities will need to retain older workers in the STEM areas and rebuild the pipeline of young people, Gordon said. The challenge is the generational disconnect between the older Baby Boomers and the younger generations X and Y. Boomers, who are more likely to be workaholics, have a very different outlook on the quality of work life. The younger generations are more family oriented and crave more work-life balance.
Manpower’s Melanie Holmes said businesses should focus on the aging worker as part of the problem and the solution.
An alarming 78 percent of employers that Manpower talks to are not worried about the impact of aging workforce on their place of business. In addition, only 18 percent of employers that Manpower talks to have a strategy to recruit older workers, and only 28 percent have a strategy to retain them.
“They are not going to start worrying about it until they start feeling the pain, but by then it will be a little late,” Holmes said.
Companies should have strategies in place to recruit and retain mature workers, especially given that life expectancy will encroach well into 80s, and the average retirement age now is 62.
“What will they do for the next 30 years?” Holmes asked. “The AARP (American Association of Retired Persons) research says people plan to work past retirement age, so companies should have strategies in place to recruit and retain their mature workers.”
Specifically, they should recruit mature or retired workers from the outside, and make sure their employment practices are age-friendly or age-neutral to help retain older workers. For first time in history, four generations are working together, so all companies need to be careful about age bias and make sure all generations get along in the workplace. Diversity programs should include generational diversity issues so people learn how to work with different generations.
To encourage workers not to go “cold turkey” at 65, flexible work options can give them the incentive to continue working by either telecommuting, working part-time, or job sharing. Another carrot is to leverage their expertise nine months out of the year, and allow them to take summers off.
Holmes said employers should pay attention to the demographics of their workforce so they have a sense of how many workers will be eligible for retirement and when, and plan to transfer the lifetime of knowledge that otherwise would walk out the door to younger generations of workers. This can be done through formal training programs, job shadowing, mentoring, or other programs where mature workers are charged with imparting what they know to younger generations.
Employers also should be using their “alumni,” but that requires keeping in touch with them after they leave. Like those who retire directly from the company, alumni can be used for training and mentoring, project work, and consulting engagements.
Passing the torch isn’t the only business consideration, Holmes noted. “Many IT organizations, especially those with lots of legacy applications, really are going to be in trouble when mature workers leave,” Holmes sated. “None of the young employees will want to learn old systems, and they will have to replace them.”
Marilyn Nagel, director of diversity and inclusion for Cisco Systems, said getting more women into the STEM disciplines is a matter of providing job flexibility options. She said Cisco has been interviewing women, finding a number of reasons why they leave the workforce, and learning what would lure them back. Some of the lures would be flexible work options, so the ability to flex their hours, work from home, or work part time is paramount.
“We’re looking at bringing in a couple of high-level IT women who want to work but are not willing to commit to the 80-hour type weeks that we tend to have in IT,” Nagel said. “So we’re giving them options to say, ‘You want to work 30 hours, you want to work 20 hours, balancing some work-life issues, what could we do to make it more palatable to you?’”
Nagel, who spoke before the December 2007 meeting of Accelerate Madison, said Cisco also is looking to let women “off ramp” for two years, and come back after their children have grown so they don’t have to start over. “We know when women off ramp and they come back into the work force, they often can’t get jobs near the level or pay where they were,” she said.
“I think it absolutely takes creativity [to lure them back].”
That creativity has removed the nation’s overall lack of broadband deployment as a barrier to work flexibility. At Cisco, everyone is given company-financed broadband access in the home. An employee with a scheduled call in India at 9 p.m. is not expected to remain in the office, and the same goes for a 6 a.m. call with Europe or a 7 p.m. call with Asia.
“We need to make sure you have high-speed broadband access at home, so we do provide it to every employee,” Nagel said.
Given the relatively low numbers of young women pursuing careers in the STEM disciplines – even with historically high numbers of women in the collegiate ranks – recruiting from colleges is still a challenge for Cisco and other technology companies. Cisco, which has established a women’s action network to support women as they enter the workforce, may have a special advantage in recruiting women to IT because it has a female CIO, Rebecca Jacoby, which in itself conveys sensitivity to the issue of diversity. It also lends credibility to Cisco’s Networking Academy and mentoring and intern programs.
“She [Jacoby] is extremely sensitive to the issue and she’s a great spokesperson,” Nagel said. “When you see that the CIO, which is the top technology person, is a woman, you know that there are growth opportunities for you.”
Cisco believes that diversifying its workforce in terms of gender, race, and other factors contribute to its business goals. “We believe that employees from different backgrounds bring different thinking and innovation with them to Cisco,” she said.
Youth is served
Guri Sohi, chairman of the Computer Science Department at the University of Wisconsin-Madison, has talked candidly about the declining numbers of his department since the height of the dotcom era in 2000. At that point, the UW Computer Science Department granted about 170 bachelor’s degrees annually, and now is down below 80 per year. It also once granted 100 master’s degrees annually, but that has declined to about 50 per year.
Meanwhile, PhDs have remained stable at roughly 20 per year, but there are some ominous national trends. Roughly 75 percent of all doctorate degrees granted nationally in electrical engineering are going to non-U.S. citizens.
UW-Madison’s experience mirrors the national trends, and several efforts are underway to reverse it. One Wisconsin effort is Powered Up, a consortium of businesses and schools in Dane County working to increase awareness in information technology careers. The group was formed in 1999, and is now engaged in talks with the Information Technology Association of Wisconsin to expand statewide.
Internships, job shadowing, and links to organizations participating in programs like UW-Madison’s Information Technology Academy are among the ways Powered Up is trying to reach its target audience. The message is simple: don’t buy into the geeky image that has been hung on young techies. That starts with pointing out that, according to the state Department of Workforce Development, that Wisconsin IT-related jobs with the most job openings between 2004 and 2014 are not programming occupations, but jobs like computer application software engineers, computer systems analysts, and network and computer support administrators.
Teresa Drabenstadt, senior manager of internal audit and IT for CUNA Mutual Group and a spokesperson for Powered Up, said students often have a misguided perception of IT and are unaware of the amount of variety involved in the technology industry.
“Everybody thinks of the geek in the corner, programming and not talking to anybody, and being very introverted, uncool and all that,” Drabenstadt said. “We’re trying to change that perception.”