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Filling the Tech-Talent Pipeline

Posted on 18. Nov, 2005 by Bill in Employment News

Filling the Tech-Talent Pipeline

The future of information technology in the United States will be determined not just in computer labs, but at kitchen tables and on long car rides. Or anywhere else that grown-ups and teenagers get together to talk. It’s those powerful conversations that just might tip a kid toward or away from a technology career - conversations like the one Melody Huang is having with her 19-year-old daughter.

Huang’s IT education has led her on a 20-year global business career - as developer, consultant, business owner and, now, a lead IT architect with Valley Forge, Pa.-based Vanguard Group, the mutual fund company. Encouraged by Huang’s example, her daughter, Katherine, a college sophomore with an undeclared major, took advanced placement computer courses in high school. But these days, she’s uncertain when her mother pitches IT as a great career. “She’s hearing that the jobs aren’t really out there, and you’re going to be pressed down the corporate ladder,” Huang relates. “That perception is definitely out there.”

It’s not just the kids. After bottoming out following the dot-com bust, IT employment is back to 2001 levels, at about 3.4 million people. Yet, ask a group of IT pros whether they’d recommend the career to their kids and many won’t be as positive as Huang. “If your interest is motivated by the desire to innovate, to come up with new and better ideas, computer science continues to be one of the most viable fields for people good in math, science and human behavior,” Huang asserts.

Dead wrong, say others. “I would never advocate a career in IT for anyone,” writes David Leitl, a systems administrator, in response to a blog posted by InformationWeek, a CMP Media property. “If you enjoy working very hard and long hours for less money, I guess it’s OK. Personally, I am considering getting my MBA and getting out of IT.” No wonder IT-related enrollments are down 50 percent or more at most colleges and universities.

Still, many believe IT offers a promising career path - despite outsourcing, globalization and automation. But, IT-dependent companies have taken the tech-talent pipeline for granted, and more people and companies need to stand up as advocates to attract the brightest minds to technology careers. The future of the tech industry in America will be determined in part by how many Melody Huangs make a passionate argument for the future of the IT career.

As a senior lecturer at MIT, Jack Rockart has seen IT’s popularity ebb and flow in the past. He has the long view - in the field since 1957, Rockart laid eyes on the second computer ever made. But this current downturn in IT interest feels different to him, he relates.

The factors pile up. The dot-com bust caused major displacement, and the computer industry’s maturity means it has lost some cool, as many kids take technology for granted. But what’s most damaging is the specter created by offshore competition and outsourcing, according to Rockart. “It’s not the amount of outsourcing taking place,” he says. “It’s the impact on people of, ‘Hey, the jobs are going away.’ It’s the expectation of what might happen.”

At least one Wall Street firm, however, reports that it is not having trouble finding talent. Despite a desire for recruits with more in-depth database experience and a greater knowledge of application integration, Perry Metviner, a managing director with New York-based Merrill Lynch, says there is no troubling lack of IT skills among U.S. graduates. Still, he acknowledges that outsourcing has some students questioning the wisdom of embarking on a Wall Street-focused tech career.

At a New York University IT career event, Metviner recalls, students were very concerned that offshoring would hurt their career prospects. “Our response to that is that we are not offshoring as much as you might think,” he says. “The stuff that we are offshoring is some of the low-value, commoditized stuff. The really close-to-business stuff is staying very close to where the business actually is.”

Yet, the share of incoming undergrads indicating they’d major in computer science dropped 60 percent from fall 2000 to 2004, according to the Computing Research Association’s analysis of data from the Higher Education Research Institute at UCLA. Even at Stanford, one of the world’s top universities for IT, the number of computer science majors last year was down 35 percent since its peak during the 2000 dot-com heyday. But that does not necessarily worry Stanford computer science chairman Bill Dally; he saw a “bimodal” student body during the dot-com boom - those who loved IT and science, and those looking for a dot-com windfall. What worries Dally is the waning overall interest in engineering and science.

MIT’s Rockart agrees. “This is not just a problem with regard to information technology,” he says. “This is a U.S. problem with regard to all technology.”

In a survey of 251 CIOs and CTOs by McKinsey & Co. conducted earlier this year, “finding talent” was cited more often than any other managerial challenge as having the most-significant effect on executing strategy over the next five years. U.S. IT leaders describe a death-spiral scenario: Global competition drives kids from the field; declining enrollments mean fewer classes and opportunities on campus, which discourages even more potential candidates; companies won’t pay high salaries for increasingly rare U.S. talent, so they push more work abroad; and other countries fill in the talent gap and increase their leadership in technology.

“It’s not like the U.S. has any lock on innovation and creativity - we don’t,” says Nancy Markle, former CIO of Arthur Andersen and a past president of the Society of Information Management. With smaller IT enrollments and a pending wave of baby boomer retirements, the pinch is coming, she points out. “Five years from now, when we see the hole we’ve created, we’re going to go the other way and start increasing opportunities and attracting students,” she predicts. “But it’s going to be too late.”

For now, MIT’s Rockart doesn’t hesitate to recommend a career in technology. “I tell people to go into the field,” he says. “The need for people who can do the job of being a business manager and technical manager is greater than it ever has been before.”

But taking a stand for the IT career path may be based on shaky ground. The entire economy is moving into uncharted global competition. Globalization has brought dramatic change to what IT people do in the United States, and it isn’t done reshaping the profession. The goal for young pros should be to find a good foundation from which to grow, rather than hoping for safe ground. “In which industry are you going to go where you aren’t going to have to compete?” asks Phil Zwieg, a VP of IS at Northwestern Mutual Life Insurance Co. “You’ve got to stay on your game to be able to compete.”

Changing IT Landscape

That’s not to diminish the changes hitting the IT industry. At its low in 2004, there were 25 percent fewer U.S. programming jobs than in 2000 - that represents more than 190,000 people who left the field or had to learn a new role, according to analysis of Bureau of Labor statistics by InformationWeek’s Eric Chabrow. Employment of IT managers, meanwhile, has risen 75 percent in the past four years, though they still represent just 10 percent of the IT workforce. Total IT employment is approximately 3.35 million, after bottoming out last year at about 3.15 million. Though the totals hide the turmoil that individuals face when forced to change roles, they do suggest a strong sector overall.

The threat of global competition and a changing IT landscape didn’t scare Diane Zhang away from an IT career. She graduated from Penn State last year with a degree in information sciences and technologies, and now she’s a colleague of Huang’s at Vanguard, where she is participating in a technology leadership program. Zhang is involved in Web-user interface development, using a component development approach that allows a consistent brand image and architecture across all Vanguard sites. She predicts lots of opportunity in IT, as long as she takes a broad view of what an “IT person” is and keeps her work tied to business units and customers.

“I see myself as an IT professional, but it’s all about solving problems of the business,” says Zhang, who started a master’s in IS in the spring and later plans to get an MBA. “IT is really exciting and unpredictable and always changing. I think it’s growing, and there’s always something new to learn.”

Meanwhile, demand for IT-educated graduates appears strong. The Bureau of Labor Statistics predicts computer scientists, computer system analysts and database administrators will be among the fastest-growing occupations through 2012.

Tapping the Pipeline

On Wall Street, the demand for the best and brightest graduates has not waned. In fact, a number of Wall Street firms, many of which have large and active recruitment departments, consider their recruiting programs to be so closely linked to their competitive advantages that they declined to be interviewed for this article.

At Merrill Lynch, the firm’s in-house training program - similar to Vanguard’s technology leadership program - is the biggest source of talent for its workforce, according to Connie Thanasoulis, COO of U.S. campus recruiting for the firm.

Merrill’s primary “feeder” - the means by which most recruits are ushered into the firm - is its summer analysts program, she explains. The program entails 10 weeks of mostly hands-on training. “You really could not successfully recruit any college graduate this day and age without a very robust summer program,” says Thanasoulis, who adds that 75 percent to 85 percent of Merrill Lynch’s new hires come from the program.

The program starts with two months of classes, according to Kristin Freas, a tech recruiter with Merrill Lynch. Last year, she says, the firm specifically taught both .NET and Java, and touched upon database issues as well. “Then [participants] are placed out into the business, they get hands-on learning, hands-on mentoring from their managers and other analysts from their group,” Freas explains.

After initial training through the first two years of employment, analysts can get additional training, if necessary. For training, Merrill works with a number of different vendors - and offers classes at its Merrill Lynch University - covering different technologies and skills.

Merrill Lynch also invests heavily in recruitment and reports no slowdown in the number of positions it needs to fill. One of the largest firms on Wall Street, with 50,600 employees (2004 data), Merrill Lynch hires about 500 analysts and technologists every year, “and that number keeps going up,” says Thanasoulis. With that kind of pipeline to fill, it is crucial the right talent is brought through the door.

Given the fact that entry-level tech salaries are high and increasing, finding the proper talent is even more important. In 2005, the average computer science grad started at $50,664 a year, a 3.3 percent increase from last year, according to the fall quarterly survey by the National Association of Colleges and Employers. Information sciences and systems grads posted a 3.6 percent increase, to an average offer of $43,902. Graduates in management information systems saw a bigger jump, rising 5 percent to an average starting salary of $43,653.

At Merrill, while recruiting for a specific position entails looking for its corresponding technology skill set, the firm’s Metviner says there are some broad-based tech skills that most recruits need. Among those skills are knowledge of J2EE framework, Java, C++, .NET, UNIX and C#. “One of the great things about Merrill is that we have such a broad platform of technology,” Metviner says.

But Metviner - who runs the firm’s global equity financing technology group - says he has noticed a few areas where recruits are lacking. One of those areas is database technology. Many new students, he says, have very rudimentary SQL (Structured Query Language - the standard language for relational database-management systems) skills. “Your ability as a new grad to hit the ground running when you are working on database-specific things is somewhat limited because you really have no depth,” he says.

To do a significant amount of database work, Metviner notes, new hires need to understand more than the fundamentals. “Really designing a database - writing the stored procedures that have the business logic in there in a way that is efficient and doesn’t draw the database into inefficient run time - really takes a good amount of understanding of what happens under the hood.”

New arrivals also seem to lack an understanding of application integration, Metviner continues. Most schools, he explains, focus on teaching students how to build a new application from scratch, “which is actually a fairly different skill set from building something where there was nothing before.” Merrill works to correct some of these deficiencies through its analyst-training program, Metviner notes.

In order to find the ideal new hire, IT and business leaders work together, zeroing in on the schools with the top IT programs. One of the ways Merrill makes sure its recruiters are pursuing students with the appropriate skills is through the use of an advisory council comprised of members from each business unit within the firm. “So they very much tell us what they are looking for in terms of, ‘Did the class last year come in with the skill sets that we needed?’” relates Thanasoulis.

‘A War for Talent’

While the advisory council functions as a way to keep Merrill’s recruiters in sync with the business units they staff, the firm also works to keep top schools in step with its needs. Metviner, who sits on the advisory committee for the tech analysts program, says the firm works to make its relationships with schools reciprocal, providing them with feedback on the students Merrill has hired. This year, she says, the council let it be known that they wanted new recruits to receive more training in business skills and project management.

“That is a growing strategy with all of us,” adds Thanasoulis. “We are going to up it a bit to have strategic long-term dialogue with the professors and deans.” For example, she notes, when Columbia University called in major employers that hire from the school, Merrill was one of the organizations providing feedback on the university’s newly proposed curriculum.

According to Freas, Merrill’s top schools for recruiting, in addition to Columbia, are the Massachusetts Institute of Technology, the University of Pennsylvania, Rutgers University, Pennsylvania State University, New York University, Cornell University and Polytechnic University in Brooklyn. To woo students at those schools, the firm’s recruiters attend career fairs, while also building relationships with technology-focused campus clubs.

Northwestern Mutual’s Zwieg also emphasizes the importance of engaging students directly. Zwieg is part of a group of IT leaders who see all this as a case worth taking directly to students, in a program starting this fall sponsored by the Society of Information Management and Microsoft. They’re planning to visit campuses in a dozen cities in the next two years to lobby college kids to consider a career in IT. Microsoft chairman Bill Gates even will visit campuses himself. To Zwieg, it’s time for the industry to show why the smartest young minds should join its ranks. “There’s enough hot and interesting things happening in this industry to help sell the story,” he says.

In fact, with the markets looking better than they have in a number of years and firms feeling more confident of expansion, the quest for IT talent has heated up once again, according to some Wall Street firms. “For the past three years, it has been getting more and more competitive every year,” Merrill’s Thanasoulis reports. “It’s a war for talent, and the students are in the driver’s seat.”

As part of its strategy to win that war - both by making the firm as attractive as possible and making sure the firm’s businesses get the personnel they want - Merrill does not use human resources employees to interview campus recruits. “Our top leaders get out there and market what kind of opportunities we have, and then we actually have prior analysts [with the firm] and alums from the schools go out and talk about what it’s like to work for Merrill,” says Thanasoulis. “It’s a very grassroots, hands-on effort.”

Where’s the Passion?

No amount of campus recruiting, however, can overcome a lack of student interest. A major problem IT education faces is that today’s students take technology for granted. But having tech-savvy users of technology isn’t enough to keep the United States a world technology leader; it needs business-smart people with strong technology educations and deep technical understanding of IT’s capabilities. Remember, it was engineering students tinkering with what’s possible that brought us Google and Yahoo, not a marketing major with a business plan to organize the Internet.

“Today’s students are less likely to have taken their computer apart than my dad was to have taken apart his tractor,” says George Corliss, a computer engineering professor at Marquette University. “I worry about the builders and the architects of tomorrow.”

For IT people who believe in the career, it’s time to get vocal to keep the talent pipeline full. Some of the most passionate advocates are women IT pros, stung by research such as CRA’s finding that the portion of women considering computer science is at 1970s levels. Their struggle shows it’s not an easy sell in the face of global competition and fading excitement for the field. “Coming out of the dot-com bubble in 2000, there’s a belief that IT jobs are highly technical, pocket-protector kinds of jobs and not the exciting jobs we really know they are,” said Wal-Mart CIO Linda Dillman at a recent InformationWeek conference; she’s involved in efforts to encourage women to participate in IT.

It’s easy to see how students come away with that impression. Stephanie Lee, who has known since she was in high school that she wanted to work in IT, is now a sophomore majoring in IT and finance at Marquette. One of the first IT courses she was required to take at the university is a beginning programming class, which involves hours on end alone at the computer. “It’s a turnoff because people think that’s all there is to IT, but there’s a lot more than programming,” Lee says. “I’d rather be in a team diagnosing problems, not in front of a computer all day.”

Stanford’s Dally says the IT industry needs to spotlight where the opportunities lie. He doesn’t expect a prime-time TV series like “CSI” or “Boston Legal” to focus on the IT profession, but he says companies and researchers could do more to show how change-the-world computer apps still await. As an example, he points to the rebirth of artificial intelligence as machines are taught to learn from statistical patterns.

And the industry needs to tackle head-on the question of global competition for IT jobs, acknowledging that young people likely will be collaborating and competing with people around the world. “The future of our students is to work in that global environment,” says Marquette’s Corliss, who’s teaching his systems analysis class in partnership with an Indian university, jointly developing a project for a software company.

The shifting business model with more global development and outsourcing will add complexity to the pace of change. Employment stats paint a picture of the future with fewer programmers and more people who can bridge the gap between business and technology with industry-specific knowledge and project management skills. Yet, even advocates of an IT career admit there’s no way to tell for sure what will drive the industry’s future. “Nobody foresaw the change that the Internet would bring,” MIT’s Rockart says. “So I have every reason to suspect we’re going to see more of this innovation.”

It’s a leap of faith, and many smart, experienced IT pros advise against making it. For the believers, though, it’s time to become evangelists.

On The Net

Vanguard Group
MIT
Merrill Lynch
New York University
Computing Research Association
Higher Education Research Institute at UCLA
Stanford
Bill Dally, McKinsey & Co.
Arthur Andersen
Society of Information Management
Northwestern Mutual Life Insurance Co.
Bureau of Labor
National Association of Colleges and Employers
Columbia University
University of Pennsylvania
Rutgers University
Pennsylvania State University
Cornell University
Polytechnic University in Brooklyn
Microsoft
Society of Information Management
Marquette University
Wal-Mart

Blogger’s Thoughts On Careers in IT

Not If You Want a Ferrari

Personally, I hope my kids never get into IT. … IT is still pretty much dark magic and not much higher than the neighborhood mechanic in many companies. They can really work on a CEO’s Ferrari, but can’t have one, even though they have specialized skills.

With so many in the tech industry out there, we get our mechanics’ licenses, hang them on the wall and puff out our chests and inflate our egos to each other with our extreme knowledge, saying I can make that computer sing in three notes … while putting things in tune for the people who really generate the front-line revenue.

Don’t get me wrong - I enjoy working in the industry, and the people I work with have some of the best entrepreneurial spirit I’ve seen. But if I had my druthers, I’d want my kids driving the Ferrari and enjoying it instead of working on it and wishing they had one.

-John Rosa, on an InformationWeek.com blog

Blog: Outsourcing Is the Killer

I would NOT recommend that my children look for an IT career. I would recommend that my children look for skills and an occupation that can last them a lifetime (40+ years) and not be stolen away from them by cheaper workers or industry changes - an occupation in which they become more valued and recognized as they get older and more experienced. With the trends and changes in IT, it is pretty clear that IT does not fit the bill.

-Erin Wells, on InformationWeek.com

Blog: Right Choice For Hard Workers

A degree in computer science is not the quick road to riches it once was. But what is? A degree in Sociology? How about History?

IT is still a very good career choice. Just because the get-rich-quick, stock-option mania of the ’90s is over does not make it a bad career field. But the competition is stiffer now.

Let’s be realistic; during the ’90s, almost any moron could get a job in IT with a minimal amount of skill. And anyone who was at least mediocre and signed with the right company at the right time made a lot of money.

Now, you have to be good at what you do, you have to be professional and you have to work hard. Maybe that last part is what is scaring the kids away?

-Charlie Harris, on InformationWeek.com

Blog: You Must Be Joking

How can someone even ask [about recommending IT as a career] at this point? The only people putting a positive spin on this are high-level managers and execs that stand to gain. All other tech people know the truth - the thought of IT as a career is long over. Why? Because a career is supposed to be long-term, not a job where you are worried about being laid off and knowing you most likely won’t get another position. Well, I and others know that IT jobs feel like temp jobs these days - that is, if you have one. Oh, and before someone starts saying things like higher education is needed, well, my friends and I have a lot of education, degrees and certifications and they don’t help anymore. … Why? We can’t compete with a foreign resource getting paid on what is IMPOSSIBLE to live on here, never mind have a family.

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Tags: Employment News