IT middle managers: They're already gone

Half your IT middle managers may be planning to quit as soon as the economy improves. Recent surveys and anecdotal evidence indicate that many have already checked out psychologically and are just waiting for the chance to move on. If you don't prepare for this exodus, when the money loosens up and IT initiatives begin to flow, you may find that you lack the talent to deliver.

The impending IT brain drain is "one of the dark secrets of the industry right now," says Vaughan Merlyn, an analyst at The Concours Group in Kingwood, Texas. "Wherever I go, the grumbling amazes me. I see it all the time."

"People tell me awful tales about working, and their loyalty is shot," adds Tom DeMarco, a consultant at Cutter Consortium in Arlington, Mass., and author of Slack: Getting Past Burnout, Busywork and the Myth of Total Efficiency (Broadway Books, 2002). "The problem is that they're all liable to leave at the same time."

A July 2003 survey of 509 U.S. middle managers by Accenture Ltd. found that 38 percent are currently looking for another job and 10 percent plan to go job hunting when the economy improves. Though the survey didn't focus exclusively on IT, Ed Jensen, a partner in the human performance practice at Accenture, says IT managers at various client sites have told him they're essentially already gone.

Late last year, another survey, by Spherion Corp. in Fort Lauderdale, Fla., and Harris Interactive Inc. in Rochester, N.Y., questioned 3,278 U.S. workers and found that 51 percent want to leave their current jobs (up from 33 percent in 1999). The dissatisfaction is even more pronounced in IT, where 40 percent of workers reported poor or fair job satisfaction compared with 28 percent of the total sample.

"There's a large amount of dissatisfaction out there," says Scot Melland, CEO of Dice Inc., a Web-based recruiting firm in New York. "Some of it might be fair and some a reaction to how the world has changed, but it's real."

A seismic shift

Job changing after an economic upheaval isn't unusual, but observers say recent history and a seismic demographic shift will make the coming phenomenon worse than in the past, especially in IT, where budgets have been axed particularly hard. "Many IT people were downsized, and those who remained find themselves literally overwhelmed," Merlyn explains.

"People are feeling used," DeMarco agrees, adding that baby boomers remember similar treatment during the downsizings of the early '90s, and many Gen Xers saw their parents laid off in those days. "So any loyalty they might feel is complicated by the fact their parents were screwed," he says.

As a result, Gen Xers came to IT expecting to work for many companies over the course of their careers. "They're much more open to saying, 'If I can't get it here, I'll find it elsewhere,' " Jensen says. "It's a different mind-set -- a free-agent mind-set."

Since that ability to move has been curtailed by the tight job market, there's a pent-up desire for change, even among those with few complaints, Merlyn says.

The Emerging Workforce Study conducted by Harris and Spherion, which has measured changes in workforce attitudes since 1997, has documented a significant shift. As late as 1997, 34 percent of workers surveyed still held "traditional" values that emphasize long-term company loyalty. This year, only 21 percent did, and in IT, only 9 percent. The rest held "emergent" or free-agent values, or were migrating in that direction.

Despite this shift, Spherion estimates that more than half of U.S. companies still use traditional management styles and as a result are in danger of losing their emergent workers at an even higher rate.

Replacing IT workers who leave won't be as easy as it looks, DeMarco says. "The buffer of unemployed IT people could be hired up in the first two or three months," he notes, "and workers in IT are not fungible." Those available are disproportionately generalists without the skills you'll be looking for, he says.

Besides, you'll need to do more than replace; you'll need to grow.

The U.S. Bureau of Labor Statistics forecasts that the top five fastest-growing job categories through 2010 are all in IT: software applications engineer, support specialist, systems software engineer, network and systems administrator, and network systems and data communications analyst.

Meanwhile, the vanguard of baby boomers will soon be reaching retirement age, and the numbers to replace them just aren't there. According to Harvard University economist David T. Ellwood, from 1980 to 2000, the "prime-age" workforce -- 25 to 54 -- grew by 54 percent. Over the next 20 years, it will grow by only 3 percent.

"We're in the middle of a major demographic shift," says Jensen. "It's one thing to say people are turning over, but the pool of talent that is available to replace them is tight, and that will drive the price up."

In fact, the cost per hire has increased nearly 71 percent since 1998, according to the Saratoga Institute Inc., a Santa Clara, Calif.-based human resources unit of Pricewaterhouse-Coopers. Spherion estimates that the cost of replacing lost emergent workers could be about $1 million for an IT group of 100. And that's assuming you can replace those who leave.

Given all these impending pressures, the postrecovery decampment will be happening at the worst possible time. "The problems that arise are myriad: the loss of knowledge in the organization, managing the workload, disruption as people leave and the expense of replacement," Jensen says.

Heading off the exodus

Despite the convergence of risk factors, some IT managers may be blindsided by the exodus because when jobs are scarce, people don't complain. "People might grumble around the cooler with colleagues, but they probably don't grumble upwards," Merlyn says. "You keep your head down and lay low."

But there are things you can do to assess and mitigate your risk.

  • Look for signs of unhappiness, and draw managers out on how people are feeling.

  • Check confidential employee surveys for signs that IT employee engagement has gone down. "That could be a leading indicator that people may move on when things turn around," Merlyn says.
  • If you can't survey the entire IT workforce, try to conduct spot surveys on one or two issues, or put a few questions on an employee portal to identify segments of your IT organization that are particularly disenchanted, Jensen says. "Then you can take more targeted steps to deal with the (potential) loss of key people."
  • Communicate candidly with the workforce. "Employees understand and can handle the fact that the economy is tough," Jensen says. "They want to feel part of the process and understand why decisions are being made."
  • Cancel overtime. "Constant overtime is a deadly cause of burnout and the sense of being used," DeMarco says.
  • Hire now. "You have to be ahead of the curve in the staffing work that's going to have to be done," DeMarco says. By taking extra work off people, you may change their minds about leaving. Even if they do leave, each person you hire now is one you won't have to hire later in a tougher, more expensive market.
  • Know your "A" players, and make sure you're doing everything you can to keep them happy, Merlyn says.
  • Get your people focused on the future.
Even with a limited budget, you can generate excitement and optimism, Merlyn says. Engage your "A" players in rethinking the vision and strategy, repositioning the team, upgrading skills and adjusting roles. If your company has been laying off people and just shifting the work to others, you may find redundancies that can be eliminated to take the pressure off and move the survivors on to higher-value activities.

Even if you're not able to move ahead on a growth agenda yet, he says, strategizing and planning "feels constructive, and it gets people engaged in thinking about an optimistic future rather than a pessimistic present."

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