A May 2004 conference on the information technology (IT) workforce, sponsored by the Information Technology Association of America, showed that the job prospects for the industry look good in the long term, if it can only make it through the next few years. But the industry will have to do this largely by itself, as neither the Bush Administration nor Congress seems prepared to give the task of rejuvenating the IT industry much more than lip service.
Why Is This Recession Different From All Other Recessions?
Understanding the bleak IT job outlook begins with understanding the peculiar nature of this recession. Erica L. Groshen, assistant vice president for domestic research at the New York Federal Reserve, showed how this recession is different from preceding economic downturns, and how this different kind of recession hits the IT industry particularly hard. Groshen described two types of unemployment that can happen when economies slow down: cyclical and structural. In previous recessions, many workers may have received layoff notices, but many of them could expect recall notices a few months later. This cycle became a fact of life among auto workers or airline employees, for example.
In this recession, however, job changes are structural rather than cyclical. Structural unemployment means the jobs go away and don?t come back. In the case of this recession, Groshen attributed the structural nature of unemployment to overinvestment during the 1990s (e.g., Y2K-related acquisitions), monetary or fiscal policies (e.g., low interest rates or tax rebates) that provide consumers with temporary cash infusions, and the success of many companies in hunkering down and weathering the storm. This last factor, said Groshen, is why job growth has remained weak during a period of moderate economic growth.
Corporate mergers, global competition, and executive incentives tied to stock performance have encouraged companies to close inefficient plants, reorganize production, and reduce payrolls. Many companies have turned to temporary workers or outsourced their IT, often overseas. The IT industries, Groshen said, have been hit particularly hard by structural changes. Internet publishing, Internet service providers, Web portals, data processing, and telecommunications companies suffered through job losses not only during the recent recession but also during the recovery that followed.
Groshen found, however, that since March 2003, payroll rates in IT and related fields have leveled off or turned positive, which means that job losses have eased, but job openings in IT have still not yet picked up. Nonetheless, the longer term prognosis looks good for IT. According to projections from the U.S. Bureau of Labor Statistics, of the top 20 fastest growing occupations through the year 2012, five are from IT: network systems and data communications analysts, applications software engineers, systems software engineers, database administrators, and systems analysts.
Hiring? Yes, But ...
Jeffrey Shuman, vice president of human resources and administration at Northrop Grumman Information Technology, said his company expects to hire some 4500 IT workers this year. Northrop Grumman is a defense contractor and provider of government IT systems. But Shuman gave a host of reasons why employers now are in no hurry to hire large numbers of workers.
Shuman said that Northrop Grumman engages in the practice of ?talent management,? which he defined as getting the ?right people with the right skills in the right place at the right time.? Achieving that goal quickly will mean working with an increasingly older and thus more expensive workforce in the United States. Offsetting the higher costs of an aging workforce will mean using more contingent and part-time workers.
Dan Ward, vice president of human resources at EDS, a computer services company and also a large government contractor, extended Shuman?s definition of talent management (Ward called it strategic workforce planning) as still getting the right people, but now with the need to be accessible, and delivered just-in-time with the right competencies. Accessible, in this case, means within reach of electronic connections to enable the use of virtual teams. And delivered just-in-time with the right competencies means that companies want to engage these skills quickly.
Ward said he finds more IT workers are accommodating their careers to this new kind of relationship. He called it the ?cowboy economy,? in which workers move from one job to the next as cowboys used to roam from spread to spread.
Building the Nation?s Intellectual Base, the (Murky) View From Washington
Susan Sclafani, the Bush Administration?s assistant secretary of education for adult and vocational education, displayed the Bush Administration?s priorities in education and detailed several new initiatives in the vocational training arena, including greater involvement by the private sector. Despite her enthusiasm, Sclafani offered only a few funded programs, all with (by Washington standards) meager funding. Moreover, Sclafani?s recommendation for more involvement by the private sector in the nation?s high schools drew an unexpected reaction from a career education specialist (see sidebar).
Congress as well came in for criticism from a breakout panel focusing on Workforce Investment Boards, local committees of government and industry representatives established to help train unemployed workers, especially those displaced by the structural changes outlined by Groshen. Ray Uhalde of the National Center on Education and the Economy said a reauthorization of the Workforce Investment Act, which funds the work of these boards, is hung up in the current session of Congress. The House and Senate have passed bills reauthorizing the act, but each bill is different, which requires a conference committee to resolve the differences. Uhalde said that because of the deep partisanship in Congress, the leadership cannot even name a conference committee, much less resolve the differences.
Strength in Diversity
Deborah L. Crawford, deputy assistant director for computer and information science and engineering at the National Science Foundation, pointed out the importance of broadening participation in the IT workforce, a necessity, she said, if the U.S. is to maintain its technological edge. While acknowledging that the science and technology workforce is more diverse than 30 years ago, Crawford insisted that ?years of dialog and effort have not produced the surge forward in momentum that is necessary--and increasingly urgent--to reach our objectives.? The key to building momentum, suggested Crawford, is to focus on developing the underutilized aspects of America?s domestic talent: women, underrepresented minorities, and persons with disabilities.
Broadening participation, said Crawford, is not about keeping business from going abroad (which one could not really stop) but about developing an IT workforce with a more competitive edge. She noted, ?To be on the frontier of discovery and in the vanguard of innovation requires new capabilities and skills that are qualitatively different from production-line education that turns students into commodities in the global marketplace at the cheapest price.?
Crawford emphasized the importance of broad training, calling a narrow focus on a single specialty a recipe for disaster. Instead, students should have a broad education that enables them ?to work across boundaries, to handle ambiguity, to integrate, to innovate, to communicate, and to cooperate.? These kinds of skills, she noted, are increased by a more diverse workforce.
Crawford?s message offered some hope, not only for the longer term industry outlook but also for career-changing scientists with an interest in IT, who are likely to have just the sort of broader education that Crawford thinks the IT industry needs. Along with a few other hopeful sessions, Crawford?s message helped cheer the conference participants, who still need to get through the current rough times.