Recruitment in the IT industry is big business; you only have to look at the endless columns of advertising for IT staff in national newspapers and trade magazines to know that. But what exactly is the situation in companies? Are IT salaries heading for the stratosphere? Is there a skills shortage? How well trained are IT staff, and do senior managers really appreciate the talent they employ?
We commissioned research firm Spikes Cavell to find out from IT managers exactly what is going on in their companies. Our survey concentrates on the problems faced by today?s managers in getting ? and keeping ? staff with the right skills. We also asked whether the non-IT staff at their companies were up to scratch on technical knowledge.
But first we looked at recruitment, and found that hardly any IT departments are actually shedding staff. Despite continued growth in the outsourcing market, only 14 per cent of companies are cutting back on IT employees. The number of companies either taking on more IT staff or mantaining their IT headcount is roughly equal.
That?s not to say that the picture is entirely rosy. Indeed, 43 per cent of IT managers described the recruitment of IT staff with the right background as either ?difficult? or ?very difficult?. Contributing to this problem, or perhaps as a result of it, 70 per cent of respondents reckon that staff turnover in their IT department is lower than average for their companies as a whole. We suspect that a combination of job insecurity ? a phenomenon not confined to the IT world ? and fading skill sets may be responsible for this.
Clearly, IT staff who remain in one company for some time may become entrenched in one particular skill set. In other words, they aren?t forced to train in new technologies and so become less marketable. Only the year 2000 problem is likely to buck this trend, as demand grows for more traditional skills, such as programmers in older languages.
But the most significant finding of our survey is plain: in salaries, training, recruitment and control, the IT department is now ?just another part? of the company. It can expect no special favours and its staff are no longer considered wizards of technology to be revered and, in the eyes of some, overpaid.
It seems that the overriding problem facing IT managers in the coming years will be getting their staff to deliver the cost benefits that senior management have now come to expect from them.
The computer industry changes faster than any other, and those claiming to be experts in the field must continually renew their skills to keep pace with these changes. So it is encouraging to note that the IT managers questioned are fairly happy with their own employees.
We asked which skill sets were difficult to find in prospective IT staff, and the highest figure ? a mere 15 per cent ? was cited as PC end-user support. A relatively low-skilled job, PC support tends to pay less than more technical jobs, and computer-minded people are more likely to gravitate towards the higher wages paid for analysts and developers than the peanuts paid for troubleshooters. Added to which, successful PC support requires strong interpersonal skills which may be more lucratively employed elsewhere.
Surprisingly, year 2000 and legacy systems operatives are said to be in short supply by a mere 8 per cent of IT managers ? only Unix programmers and client-server experts are in similarly high demand at 10 per cent each.
But the rapidly shifting landscape of corporate IT skills was thrown into sharp relief when we asked about anticipated shortfalls in staff expertise over the next three years. Despite the hope that the current crop of school leavers is likely to be more IT-savvy (?IT jobs are not so readily available because of better awareness about the importance of the computer by the younger generation,? says one IT manager), there is a raft of skills which respondents think will be in short supply by 2000. Top of the list is year 2000 and legacy systems (33 per cent), followed by competent IT managers (30 per cent), Java coders (23 per cent), Internet experts (22 per cent), general programmers (22 per cent) and decent analysts (22 per cent).
That?s not to say that all the respondents are desperate for highly experienced IT people: ?Newly-qualified staff are the best because they have not been preconditioned,? says one cynical IT manager. ?This means we can train them specifically to suit our company.? Another pointed out that, among non-IT staff, the quickest learners tend to be better educated ? ?they?re more switched on?. This suggests that, although academic qualifications are not the be-all and end-all of general recruitment, firms in computer-intensive environments would be well advised to look for good exam results.
Where IT managers think their staff are underskilled ? both within the IT department itself and among the user community ? the largest single reason is believed to be lack of training.
Amazingly, a quarter of the companies questioned provide at best inadequate training for their IT staff or, in some cases, none at all. A further fifth of IT managers don?t even know how much training their own staff are getting ? although it?s worth noting that these managers tend to be in companies where recruiting good staff is not a problem. For many employers, what you lose on high salaries to attract experts, you gain in reduced training budgets.
For those companies that do offer staff training, the most popular method is off-site courses (85 per cent of respondents mentioned these), with on-site training and paper-based systems some way behind at about 60 per cent each. A tiny 4 per cent of IT managers mentioned computer-based training in the workplace, although, as intranets become more commonplace, this figure may rise dramatically.
The only other problem cited in connection with training is finding the time to do it. ?Free seminar courses run by manufacturers are extremely useful,? says one IT manager, ?but it is usually difficult to find the time to attend.? And what if the course is expensive? ?Senior managers are mostly bean counters who are reluctant to surrender their budgets to IT,? complains a cash-strapped operations manager. This disgruntlement is borne out by the fact that only a quarter of IT managers think it is their department?s responsibility to train users; nearly half thought that business managers should share this responsibility.
So, if there is a lack of cohesive commitment to the central IT function, what about training end-users in IT skills? Again, we see a high proportion (38 per cent) of IT managers dissatisfied with their users? computer skills. ?There appears to be a constant battle between senior managers and department heads, because the former still do not recognise the importance of IT training,? says a perceptive systems manager. And, as companies adopt a more global approach, even IT people handling well-trained staff on their existing sites are concerned about the future: ?It looks as if we will be responsible for IT across our European operations, and I just don?t know what sort of skills we will find there.?
Finally, we asked about the skills and training of senior management: do they actually use their own IT facilities and, if so, do they use them properly? ?Although senior managers lack IT knowledge, they do listen to and act on the advice of the IT department,? says one lucky IT manger. But he is in the minority. Only a quarter of respondents think their senior managers have a sound knowledge of IT, while 43 per cent believe that their bosses? knowledge leaves something to be desired.
But are they easy to train? ?The senior management training courses we run are normally very poorly attended,? is a typical lament. However, an impressive 48 per cent of IT managers think key company personnel make a good effort to learn about computers. Training methods ? as with staff in general ? vary widely, but senior managers in particular respond more to courses where there is an added novelty value, such as Internet-based courses or multimedia training software.
Salaries remain a tricky area for IT managers. Naturally, staff who have skills that are in great demand can price themselves accordingly. But with IT becoming increasingly integrated into the business as a whole, it?s only natural that across-the-board corporate remuneration schemes should come into force.
Currently, 61 per cent of respondents say that there are still no performance-related pay schemes in the IT department, while a surprising 32 per cent have all their IT staff on some kind of performance pay system. However, most of these are assessed by the success of the IT department as a whole, rather than simply on personal performance. And, in general, IT departments are compared head-to-head with other sections of the company to determine their awards.
Yet salaries are not soaring for IT managers, and most ? 65 per cent ? had pay rises last year that were within a couple of per cent of inflation. Indeed, only 1-in-10 IT managers has seen their salary rise by more than 10 per cent in the last 12 months. Such statistics are hardly surprising given that moving jobs remains one of the best ways of securing a larger pay packet and, as we?ve already established, staff turnover is currently relatively low.
However, it?s worth noting that salaries for specific skill sets are increasing, although, again, not much in excess of inflation. Whether this will continue to be the case as companies scramble to hire programming muscle for a year 2000 fix on particular systems remains to be seen.
One of the key trends to emerge over recent years has been towards decentralised computing, with individual departments and even users assuming responsibility for many of the tasks traditionally associated with dedicated IT staff.
But IT managers seem confident that this trend is slowing down, and more than a quarter predict that their own staff will re-centralise some of these responsibilities over the next three years. As systems grow in complexity and IT staff start to recognise their role as proper business people, this would seem a natural progression.
The other major trend has been towards outsourcing. This implies that IT managers not only lose control of the systems, but also over the staff who operate them. When wholesale outsourcing takes place, staff are indeed removed from the IT manager?s control, but we were surprised to learn just how few companies take the lesser step of hiring consultants or contractors. A massive 80 per cent of IT managers say they have no self-employed or external contractors in their departments.
Why is this? On the one hand expert contractors from specialist companies or self-employed IT gurus can add something to a company?s IT team. But perhaps the high cost, possible unreliability and variable demand for contractors may have persuaded IT managers to rely on their own, loyal staff instead, and then possibly bring in specialist help from manufacturers as and when they?re needed.
Today?s IT jobs market
?At the depth of the recession in 1992 and for the first few months of 1993 things hit rock bottom,? says Clive South, marketing manager at recruitment consultants Software Personnel. ?At that time we had two applicants for every one vacancy.?
For the first time in its history the IT profession was hit by widespread unemployment. ?Even in the early 1980s no one lost their job because companies thought they would gain overall savings by investing in technology,? says South.
In comparison to the early 1990s, which were marred by downsizing, retrenchment, mission statements and business process re-engineering, the current landscape for IT staff couldn?t be more different. In contrast to the gloomy days of late 1992, South claims Software Personnel now has three job vacancies for every one IT worker.
In fact, it?s difficult to find an IT skill that isn?t in demand. After canvassing the opinions of the UK?s leading recruitment agencies, only staff dependent on Assembler, mini systems and earlier Hewlett Packard and ICL products got the thumbs down.
The hottest areas of expertise go right across the board. Older-style skills such as Cobol, Cics and DB2 are coming back into fashion, courtesy of the year 2000 crisis. Client-server skills grow ever-more popular, with consistent demand for C++ supremos to work on Unix and PC platforms ? especially in the banking sector. Staff with NT skills under their belt are also hot property, as are those with Internet and intranet design skills.
But, while this is good news for the footloose and fancy free contractors, Robert Wirszycz, director general at the Computing Services and Software Association (CSSA), anticipates growing problems for IT professionals further up the food chain. In fact, he predicts widescale sackings of IT managers over the next few years.
?The requirements from City companies for super-human IT managers are amazing. These people don?t yet exist in the UK,? he says. ?So staff with higher levels of business skills are being imported from the US.?
The IT manager of the future
According to Wirszycz, the UK?s current generation of IT management will be ousted by the board and replaced by people from other disciplines. ?You?ll see staff coming in from other areas, such as marketing, who are learning how to use technology, but are essentially business focused.?
?Your typical IT manager is no longer a techy nutter,? concurs Jon Tyler, managing director of recruitment specialists Gatton Consulting. In fact, practically everyone we spoke to agreed that the IT manager of the future should have business vision. When the board learns about Java and the Internet it needs to know how it fits into the company as a business tool.
?There is a new generation of IT director emerging,? says David Sherriff, projects and consultancy director of IT consultants ECsoft Group. ?Traditionally, the manager has reported to the financial director who has some kind of representation on the board. But we?re witnessing a new breed of IT manager who sits on the board and says: ?Give me a #xm spend and I will invest that money in technology to give the company extra margin on each unit we sell, increase competitiveness by Y, and boost return to shareholders by Z.??
Sherriff sees MBA courses as a useful way for ambitious IT professionals to gain extra career leverage. ?The new breed tends to have a good technical grounding, often as an analyst. They?re in their mid to late thirties and have been round the block a couple of times. Someone who is capable of seeing that, for example, Forte [an advanced application development environment for enterprise-wide client-server applications] has significant business applications, without needing an in-depth knowledge of the program itself.?
CSSA?s Wirszycz also forecasts a long-term headache for IT managers in search of permanent staff. He warns: ?At a company level the shortages might not look that serious. A lot of IT managers see the shortage as a year 2000 deadline problem and are happy to use temporary contract staff.?
?But, on a cumulative level, it?s a nightmare,? he adds. ?Many of the major systems integrators have vacancies for more than 800 IT staff. Where will these staff with the necessary networking, desktop applications, Unix, and Intranet expertise come from??
Wirszycz sees internecine job warfare looming on the horizon, with bands of highly trained and aggressive head-hunters systematically poaching staff from rivals as companies desperately try to fill the gaps.
While IT managers wrestle with the future and find ways of avoiding the chop, short-term contractors have never had it so good. The number of contractors has doubled over the past three years, now totalling between 40,000 and 60,000. ?Corporate downsizing in the early 1990s has led to company disloyalty from IT employees,? says Wirszycz. ?They?re more likely to be loyal to themselves.?
Field of gold
Claims about the amounts of money being made by computer contractors vary widely, with reports of young guns in their late twenties making more than #200,000 a year.
In fact, when compared to the salary rates for permanent staff, contractors? pay has declined from a peak of two-and-a-half times that of a permanent member of staff with the same skills, to between 30 per cent and 70 per cent higher.
Nevertheless, boosted by EMU, the year 2000 and a general economic upturn, IT contractors are doing very well. ?IT professionals in their late twenties with SAP [general business automation software] expertise working in the oil industry and big multinationals are making #2,000 a week,? says Gatton?s Jon Tyler.
But IT strategists and those with Oracle and Sybase skills are also in great demand.? According to Wirszycz, many IT workers with Cobol and computer-testing experience are making as much as #3,000 a week.
Claims regarding the average length of contracts also vary widely. Wirszycz says that the average duration has fallen to less than six months. Conversely, Software Personnel?s Clive South claims it has increased to an average of 25 to 26 weeks, with renewed contracts of the same length being given in 70 per cent of all cases. ?Staff are typically on site for well over a year,? he says.
Of course, like estate agents, recruitment companies love to talk up the state of their market. ?The shortage is extremely acute,? warns Tyler. ?UK companies have been forced to import thousands of IT workers from India, Australia and South Africa just to fill the vacancies. If they?ve got any kind of PC and Unix-based experience it?s very easy to get a job.?
Tyler adds that the shortages are so great that some companies are even taking temporary staff who don?t have the required expertise for the job.
Trading on traditional skills
Software re-engineering specialist Alydaar International is predicting a huge shortfall of programmers with Cobol skills. ?Anyone graduating from university with a computing degree in the last five years thinks that Cobol was a language used by their grandfathers,? says Alydaar?s business development director, Paul Weller. ?More mature software developers with Cobol skills have since retrained and are currently earning at least #35,000 a year ? freelancers are pulling in even more,? he believes.
And, according to Alydaar: ?As the end of the millennium approaches, their earning potential will multiply.? He estimates that UK industry would need an additional 250,000 programmers to rewrite each line of machine code. A good developer, he claims, can write a maximum of around 200 lines a week.
?Even schemes to ship the problem to India, where people believe there are armies of cheap programmers, will not solve the problem,? claims Weller. ?The sheer scale of the task means that the only viable answer is to use re-engineering tools.?
Alydaar International expects to recruit up to 100 additional members of staff (project managers, senior sales consultants, senior consulting services managers and programmers) over the next 18 months, with the specific brief of dealing with year 2000 date problem.
To meet this shortage, employers are having to be ever more creative when looking for suitably qualified staff. Mothers who gave up promising IT careers in the late 1980s to rear children are being tempted back to the keyboard. ?Mums with Cobol experience can make #600 a week. Not bad for just a few hours? work a day,? says Gatton?s Jon Tyler.
Not content with seducing mothers back into the workforce, his company is busy digging up IT staff in their late forties and fifties, tempting them away from permanent contracts with fat cat contractor salaries.
Year 2000 and slump
But IT professionals are being warned not to become overly dependent on year 2000 and EMU skills. Instead, they should make hay while the sun shines and acquire other types of expertise.
According to a recent report by the Institute of Data Processing Management (IDPM), IT as a profession faces collapse when we wake up on 1 January 2000. It estimates that nearly half the number of jobs could be slashed as companies take an axe to their IT budgets.
David Sherriff agrees. ?It?s a totally artificial market which could collapse come the millennium. The scale is totally unprecedented ? even compared to the aftermath of decimalisation in 1971.?
Build ?em up, burn ?em out
According to Sherriff, training is the key to holding onto permanent staff. ?The typical permanent staffer is more into technology than business. They value being at the cutting edge, and if you don?t send them on the latest Oracle 8 training course, they?ll go to an employer who will.?
Cashing in on the need for contractors to keep abreast of the latest skills, Oracle has taken the lead by introducing intensive weekend versions of its five-day training courses for permanent staffers at rates of #900.
With the lure of high wages in return for long hours, burn-out is on the increase. ?Ten years ago I reckon your standard IT department was a relatively relaxed place,? says Sherriff. ?But it?s all changed. You might now be making #600 a day, but if a company is paying out that kind of cash they will want their money?s worth.?
And the personal costs can be high, as Sherriff testifies: ?I?ve come across a number of people who have had breakdowns. It?s not enough to simply do your job well anymore. Things are moving so fast you have to keep up to speed outside of office hours by reading magazines and watching videos, simply to stand still.?
?Because IT has become an integral part of the business function, companies cannot afford anything to go wrong. Everything has to run smoothly all the time,? adds Sherriff.
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