Workforce crisis: Preparing for the coming IT crunch

Ready or not, a shortage of IT talent is coming. Here's how to prepare.

Like global warming, the reality of the looming talent shortage is pretty well established, but that hasn't induced many IT managers to prepare for it. Now there are no more excuses. Workforce Crisis: How to Beat the Coming Shortage of Skills and Talent (Harvard Business School Press, 2006) lays out a comprehensive plan to ensure that your IT organization -- or any organization -- continues to recruit and retain workers with the skills and commitment to move forward. Robert Morison, who wrote the book with Ken Dychtwald and Tamara J. Erickson, spoke with Kathleen Melymuka about the challenges for the coming decade.

The talent shortage is hard to get too worried about when you're not feeling the pain. When will this problem really become apparent? Any business that is already in an industry that relies on occupations in short supply knows about this. That's not computer science yet, but engineering disciplines, oil and gas, health care -- especially nursing -- public utilities, and government -- especially the federal government. I bet their IT workforce has an old profile. And to any organization that dares to take a close look at its workforce demographics and plan ahead, this will resonate.

When will it start to hit? The oldest boomers are 60, and the average retirement age is 63, so I'd say you'll be feeling pressure by 2010 and very much pressure by 2015. We may be a couple million workers shy in 2010 and 10 million shy around 2015. But you're right: In most organizations, this is still seen as an indefinitely postponable issue.

You call older workers the untapped resource. Why? Workers over 55 are the fastest-growing segment of the workforce. Workers over 55 used to be 17% or 18% of the workforce in the '50s and '60s. That segment bottomed out in the '90s at under 11%, but now it's inching up, and by 2015, it will be close to 20%. The average employer will have to rely more on workers over 55.

And there are two additional things going on with IT. One is the rather disturbing trend of the declining number of computer science undergraduate majors and graduate enrollment between 2000 and 2005. The other is that a lot of IT organizations have a generation gap. There's a group of really mature workers in leadership and a group of very young workers who have really different experience and attitudes toward the technology itself, having grown up digital.

But how will employers be able to rely more on workers over 55? Won't they be retiring? The good news is that the boomers should play a role in the brain-drain solution as well as in the problem. Seventy-five percent are on record -- repeatedly, in many surveys, including ours -- as saying that they intend to keep working at least part time in retirement. One-third of these cite financial reasons -- they haven't accumulated enough wealth and pension to retire completely. The other two-thirds say [it's] because they want to remain active.

The trick is that they generally don't want the same responsibilities or intensity, and many don't want to work for their old employers. Most want very flexible schedules. The most popular pattern is not reduced hours or regular part-time, but rather larger chunks -- even six months -- of time on and off. So employers can keep a lot of experience and brain power available if they meet working retirees on their own terms. Few employers are ready to handle such flexibility, but they should start practicing soon. IT has an advantage in that much of its work is already structured as projects of specific duration, so a person can sign on for a project at a time.

Can you suggest any strategies for using mature workers to best advantage? If you haven't done so already, start a "retiree return" program with specific procedures for how retirees remain in affiliation -- and available for part-time work -- with the company.

Hire other companies' retirees for similar part-time work. They do not know your organization, so you lose continuity and institutional knowledge, but they may bring valuable skills and experience. And if their health care is already covered through their retiree benefits, they can be very cost-effective.

Remember that the mature employees whom you really want to retain are engaged by the same factors now as earlier in their careers: interesting and meaningful work, a congenial workplace, opportunities to learn new things and grow personally, and the chance to work with a variety of colleagues, including much younger ones. Don't use them as filler or in repetitive roles that don't leverage all that they have to offer. If you do, they'll be lessening the brain drain for your competitors.

At the midcareer level, you talk about "the boomer bottleneck." What's that, and how does it affect productivity? Our research included a nationwide worker survey conducted by Harris [Interactive]. It found that midcareer people -- from ages 35 to 54 -- work the most hours and are the least satisfied on the job. According to a Conference Board study, overall job satisfaction declined from 1995 to 2005, and it declined most among those in midcareer. They are most likely to say they feel dead-ended -- more than 35%.

What happens is that there are changing family patterns: Parents are living longer and families are being formed later, so a lot of midcareer workers have young children at home and are responsible for caring for elderly parents. A lot find their responsibilities at home, in the community and on the job are at all-time highs -- all at the same time.

Meanwhile, a lot of them have had careers interrupted through mergers and acquisitions, restructuring and downsizing. Others feel they're bottlenecked without as many promotion slots as there used to be, or they feel they haven't accomplished what they had hoped to at this point. And survivors of downsizing are worn out and burned out.

So mix that all together, and it's like the work version of the midlife crisis. That group has the highest correlation of low employee engagement. The effects on productivity are sure to be profound. A lot of people are overdue for a career rekindling -- for opportunities to get recharged on the job, for lateral moves and fresh training. If you have just a job-posting system, maybe you need to look beyond that and actively encourage people to move around and spread their wealth of knowledge. Without that, just think how much energy and productivity is left on the table.

Then there's younger worker churn. Is that just the new normal, or is there a way to engage their loyalty? Statistically, people today job-hop more than their parents did at that age. We all know people who have had seven or eight jobs by age 30. Corporations changed the game, and there is no longer a promise of loyalty for security. We've been saying for years that employees own their own careers; young people behave accordingly. They see what happened to their parents' careers and to their health care and pension plans. So they know they're free agents.

So, how do you engage them on their own terms? First, give them the opportunity to have a quick start. Don't ask them to bide their time, earn their stripes. Enable them to feel that work is exciting and meaningful from Day One. If you succeed, you increase the odds of keeping people longer. The second thing is to give them opportunities to learn a lot. Finally, keep in touch with those who leave, and invite them back.

Flexible work arrangements are a big part of your recommendations, but you also talk about flexible compensation and benefits. Why are they important, and how do they work? Most organizations don't have that much flexibility in compensation and benefits. We've heard of a few where people can trade off between total comp and time off, for example, but deals like that are usually one-offs. Benefits tend to be cafeteria plans: You take one from here and one from there. We find what's needed is more combinations: a flexible schedule and child care support, for example. Most companies say, "Here's the list," not, "What are the combinations that will make the greatest difference to our employees?"

Also, a lot of people are overwhelmed by the complexity of their health care coverage. We recommend that you give people the benefit of accessible benefits. Make them easy to understand.

These ideas are all interesting, but if my workforce seems satisfied, why rock the boat? People may say they're satisfied, but are they really engaged? Satisfaction is, "I could be doing worse." Engagement is to go the extra mile to help this organization. You need to make that distinction between satisfaction and engagement. Are you tapping into their strengths and all they have to offer?

Barely on the RadarDo you have any plans in place to retain baby boomers beyond normal retirement?
Part-time opportunities


Consulting opportunities


Mentoring opportunities


All of the above


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Base: 110 attendees at Computerworlds Premier 100 IT Leaders Conference, March 2006

Copyright © 2006 IDG Communications, Inc.

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