FRAMINGHAM (08/01/2000) - Three years ago, when companies everywhere were competing frantically for mainframe programmers to fix the Y2K bug, Dan Stanley, secretary of administration for the state of Kansas, responded with a corporate solution: He gave key workers and new hires extra cash. Now, although the millennium bug has been vanquished, Stanley is still handing out bonuses to keep state IT salaries "in the ballpark" to ward off private employers that pay 15 percent more.
The incentives are working. Kansas has slashed its IT job vacancy rate by two-thirds. But there's a catch: The state won't budget any more money to pay the higher salaries, so Stanley has to leave many of the remaining jobs unfilled. "You just have to suck it up," he says of his approach. "The alternative is you have a lot more positions open."
Around the country, other government agencies are in similar straits. During the next four years, the U.S. government will be trying to hire about 37,000 IT professionals, more than half its current high-tech workforce, while states like Texas are confronting turnover rates of nearly 16 percent. With half of all high-tech jobs going unfilled, according to the Information Technology Association of America, government agencies, which don't have the lure of high salaries, stock options or dotcom glamour, must think creatively to reel in prospects.
To stay afloat, government agencies are borrowing recruitment and retention techniques from commercial companies, including awarding salary bonuses and making carefully targeted marketing pitches. They're redesigning bureaucratic, industrial-age hiring and promotion practices, also to be more like the corporate world. And they're beefing up training programs--as well as paying for college, graduate or technical school--to entice both entry-level workers and career changers and also to hold on to experienced employees who want new skills. Meanwhile, they're counting on some traditional perks of public employment, such as family-friendly work schedules, job security and the chance to contribute to the greater good, to attract applicants.
Will any of it work? Public-sector CIOs say these tactics must if they're to meet taxpayers' demands for 21st-century online government, much less keep their legacy systems humming. Their vision of one-stop shopping for government services--for example, allowing businesses to use one website to get permits and file regulatory paperwork rather than having to go to multiple agencies--requires unprecedented back-end integration of existing applications and databases.
"If we don't bring the right people on board, we can't look at new systems development, reengineering processes and applying new technology," says Gloria Parker, CIO with the U.S. Department of Housing and Urban Development, and cochair of the federal CIO Council's Education and Training Committee in Washington. "To serve citizens, it's very critical to bring on the right [talent]." Private companies that fail to modernize eventually go out of business. Government agencies may not face the same pressure to preserve the bottom line, but they can still pay, in loss of political support, for doing business in antiquated ways.
MONEY ISN'T EVERYTHING, BUT IT HELPS
As Dan Stanley confirms, throwing money at employees is one way to keep them on board. Vincent Milich, a regional director with The Hay Group, a human resources consulting company in Philadelphia, says compensation is one of the top three factors influencing workers' decisions to take a new job, tied with the potential they see for career growth and challenging work.
Not only do government agencies generally pay less than the private sector, Milich observes, but they also typically have rigid pay scales that limit their ability to tailor compensation to individual workers. "Corporations have more robust individual career ladders for IT," he says. "In a government agency, you reach a certain level and only supervisory and managerial jobs [pay higher salary] levels." Bonuses for work-place longevity, sought-after skills or stellar performance on a project are still rare.
At a U.S. Senate hearing on May 2, Roberta L. Gross, inspector general of NASA, told lawmakers that her agency was having an "extremely difficult" time recruiting network security experts to investigate computer crime because private-sector companies pay almost twice what NASA can offer and provide such benefits as stock options, which the government can't match.
Gross says inflexible hiring rules, which dictate how much training and experience candidates must have for any federal job, compound the problem. "A number of highly qualified information technology auditors with recognized credentials do not qualify for auditor positions under current guidelines," she told the panel.
Government CIOs concede that it's unlikely they'll ever match private-sector salaries. Lawmakers, at both the state and federal levels, are reluctant to increase pay for IT workers, either because of union pressure to pay all professionals equally or because higher salaries will make government look bigger to voters. Nevertheless, agencies are trying to revamp outdated hiring rules.
At the federal level, the U.S. Office of Personnel Management (OPM), in Washington is testing a new compensation plan that will tie IT salaries more explicitly to what employees can do. Today, federal salaries are determined largely by how long an employee has worked for the government (management experience also can be a factor). According to the current pay scale, an experienced systems analyst with no managerial responsibilities can't make more than $93,500 a year, while private companies routinely offer such job candidates six figures. Most of the recent college graduates working for federal agencies can earn an average of $35,000 their first year of work. Under the newly proposed system, agencies will be able to set pay based on employees' specific skills and award raises for additional training.
As part of the planned overhaul, OPM is crafting new job titles that officials say will help agencies target workers who deserve premium pay, and eliminate one-size-fits-all qualification rules. Most federal IT workers today hold generic "computer specialist" or "telecommunications specialist" titles, with job descriptions that do not differentiate between programmers and project managers or allow agencies to weigh academic credentials against on-the-job training. The job-specific titles proposed for such functional areas as customer support, security and data management would help agencies target these kinds of positions for special pay rates, says Judy Davis, classification programs division chief at OPM.
IF YOU CAN'T BEAT 'EM, HELP 'EM
But government CIOs assert that, because they can't really compete financially, they have to sell new recruits, as well as current employees, on other benefits. Just as in the private sector, government managers believe that offering training on cutting-edge technologies, such as Java and ERP software, and letting employees work on major systems right away is their most important recruiting tool.
In a draft of a report that circulated in March, the U.S. General Accounting Office, which, among other things, advises federal CIOs on management, said leading companies and public agencies alike cite training as "a major nonsalary incentive for attracting and retaining skilled [information management] professionals." "The fact is that state government is a boot camp for the private sector," says Oregon CIO Don Mazziotti. Because agencies can't afford to hire the most experienced workers, young people get "great opportunities to do challenging projects early in their careers," he says.
Gaining new skills can also be attractive to experienced workers. Recently, Kansas lured Clydette Johnson away from her job in a consulting firm to work as a mainframe programmer with the promise of learning a new accounting system.
Johnson, 54, says that promise wasn't the main reason she took the job--but it helped. The consultancy kept her so busy that she had no time for training. To make matters worse, the company was probably going to transfer her from Topeka, the state capital, to an office in Kansas City, which would have added more than an hour to her commute.
Earlier this year, Texas launched the Texas IT Academy, a training program that teaches IT skills to workers with no previous experience for entry-level state IT jobs. In the week after the state announced the program in March, officials received 200 applications--a testament to the demand for high-tech education.
(By the program deadline in May, 800 people applied.) After 12 to 14 weeks of intensive training, these workers will fill about 30 of some 800 IT vacancies in state agencies and universities, where they'll agree to stay on for two years. The first crop of recruits, who are expected to start work in the fall, will work in the capitol building, in Austin, but the program may expand to other locations.
Texas officials aren't expecting all of those workers to extend their commitment beyond their two-year contracts, any more than private companies rely on employees' long-term loyalty. "We'll continue to compete and compete with the private sector," says Carolyn Purcell, director of the Texas Department of Information Resources in Austin. "If managers can take the time to find out what employees want and if it's possible to meet those needs, we'll be successful keeping them."
According to a study of state-employee turnover in Texas published in March, when IT workers left their jobs, only 19 percent continued to work for the government, but at other state agencies. The study, by the state auditor's office, reported that it was difficult to determine why the rest left the government, other than because of retirement, because data from the state's personnel system appeared incomplete. State statistics do show, however, that at least a fourth of all state workers who quit last year did so for job-related reasons including "inadequate salary" and "lack of opportunity for advancement."
Meanwhile, says Kimberlee Harper Hanken, a research analyst who manages the Texas IT Academy project for the comptroller of public accounts, "if we do lose [newly trained employees] to the private sector, we're still contributing to the overall workforce development picture. As state agencies, we care about that as well." In fact, nearly three dozen private companies have joined the project's advisory board to have input on which skills the recruits are learning.
Shirley Malia, program manager for education and training with the U.S.
Critical Infrastructure Assurance Office, says people don't think of government as "an employer of choice," particularly in the IT field. Trying to change that, Malia heads a new government program called the Federal Cyber Services Initiative. The program, for which President Clinton has asked Congress to budget $11 million in scholarship funds next year, will train specialists in information security. Within three years, the government hopes to build a cadre of 300 undergraduate and graduate students a year to work for federal agencies for at least two years. Officials plan to award the first scholarships in September 2001 and bring the new recruits on staff in 2003.
Once trained, these recruits will be assigned to help agencies safeguard government networks from attacks and secure information held in agency databases about millions of citizens and corporations--part of a broad plan to protect the nation's IT infrastructure. These are jobs government CIOs believe are critical for both preserving national defense and providing online services to citizens. "We need to do some promotion that the [training] programs are very satisfying and that you can have an impact on something that makes a difference in people's lives," Malia says.
Once new employees are on board, the government will have to "provide state-of-the-art training to keep their skills up to date" and to offer cutting-edge projects that keep them interested, she says. But Malia is realistic about the appeal of private industry, which is generating most of the demand for information security skills, noting that "Industry will benefit directly from the program."
Government shouldn't, however, stop at merely training young workers, who then jump to the private sector when their skills mature, says Maurice McTigue, distinguished visiting scholar at the Mercatus Center, a research facility at George Mason University, in Fairfax, Va. Agencies should look for ways to make it easy for employees to move back and forth between government and industry, as career opportunities arise. Job openings shouldn't be "sinecures for current civil servants," who often get preference under agency personnel rules, says McTigue, a former minister of labor in the New Zealand government.
Although this is not the case everywhere, many public agencies tend to groom insiders--especially those in management--for senior jobs. "By growing our own management team, that shoots a very clear signal to other employees that they have opportunity here," says Don Heiman, Kansas's chief information technology officer. Besides, he says, there aren't lots of vacancies for those positions.
"When people come to Topeka, [they] tend to want to be here for personal reasons," so they stick around.
"It's better to promote from within, unless you're requiring a special skill," asserts Patricia Popovich, the U.S. State Department's deputy CIO for management. She hopes some employees who recently signed on with the department will choose to become managers. Like other government agencies, the State Department is facing potentially large numbers of baby-boomer retirements within the next few years. But Popovich says the need to recruit people with fresh technical skills outweighs the demand for new management blood.
"The federal government almost always gives the midcareer opening to the next in line," says Paul C. Light, vice president and director of governmental studies at the Brookings Institution, a Washington think tank. Light's recent book, The New Public Service (Brookings Institution Press, 1999), concludes that public-spirited professionals would rather join private contractors or nonprofit groups that do government work than become federal employees. OPM officials counter that agencies aren't required to promote from within, but the government's central personnel office also doesn't compile data about deals agencies have with employee unions to do just that.
Donna Gregory, director of OPM's nationwide examining policy office, notes that for the past five years--during which IT workers became a hot commodity--most federal agencies were shedding workers as a result of downsizing plans.
Personnel rules required agencies with job openings to give preference to anyone who was laid off from another government job.
SELL WHAT YOU'VE GOT
In the end, government agencies, just like private companies, need a compelling business proposition to attract employees. Private companies sell their prominence in their industry and the role technology plays in maintaining their position, says Rich Brennen, managing director of the information technology practice at Chicago executive search company Spencer Stuart and Associates.
Government can promote "the sexy project," Brennen says, something "you can do only in government because of the scale." Agencies also try to market more general benefits.
"You would be surprised to learn, probably, that people still believe in public service," says Texas' Purcell. In addition, she says, "the kinds of jobs that are in startup environments and in some of these software companies have very demanding schedules," while state agencies offer a "less frantic" environment.
Furthermore, "state government still provides a robust benefits package."
In Kansas, Clydette Johnson, who left a more lucrative private-sector consulting position, says that not only does her state job offer her the chance to keep her short commute and learn some new skills, but it also provides other lifestyle benefits. After years of working 60 or more hours a week, she now works "probably not over 45" and has more time to spend with her husband and grandchildren.
There are even some glamorous IT jobs in government, and CIOs are beginning to learn how to sell them. Last year, for instance, the State Department lured about 170 new hires to fill vacancies at American embassies around the world with a newspaper ad enticing workers to "Go Global." Popovich says that before the ad campaign that promoted two job fairs, the department hadn't put much effort into recruiting IT workers directly into the foreign service, although that is how the agency staffs most other embassy jobs. At the first job fair, in February 1999, 1,500 prospects showed up to apply for 250 jobs.
One of them was Wendy Elliott, who was getting restless after more than 15 years as a systems analyst for the Virginia Beach, Va., city government. Over the years, Elliott had vacationed often in the Carribean and Mexico but had dreams of places farther afield, such as Chile, Zimbabwe and the Pacific islands. "There's a big difference between going on vacation for two weeks and spending two or three years in a culture learning their ways," she says.
Elliott signed on, and she'll be leaving in October for her first posting at the U.S. embassy in Kigali, Rwanda, doing "anything and everything" to support its telecommunications and computer systems. Though Elliott's new salary ($49,100) marks an 11 percent pay cut, other perks more than make up the difference: a 15 percent recruitment bonus, a foreign service living allowance and an automatic promotion and salary hike after one year. Plus there's the chance to receive her advanced-systems certification that would give her another 15 percent pay raise. What's more, she says, "I spent two weeks learning about sub-Saharan Africa, and I'm getting eight weeks of French lessons. I never got that in my other job."
Even the IRS has a good story to tell. IRS CIO Paul J. Cosgrave, himself a former industry executive at Claremont Technology Group, concedes that the agency, which has stumbled repeatedly on the way to modernizing its 1960s-era IT architecture, has a reputation for technological backwardness. But that's changing in ways that offer IT workers the chance to work on exciting projects, he says. "We have the single most popular website in the country, aside from the portals. We're looking aggressively to expand our electronic filing," he says. "We are doing some of the neatest technology."
Despite the promise of sexy new systems and exciting travel to exotic locales, Light, of the Brookings Institution, is more pessimistic about recruiting IT professionals for public-sector jobs. "The market is so hot that it is not clear what government can do other than outsource IT functions entirely," he says. "And I might argue that the people who take jobs in the private sector delivering on those contracts are just as much in the public service as those who used to do the same jobs in-house."
Do you have ideas for how government agencies can staff up? E-mail them to Senior Writer Elana Varon at email@example.com.
WHEN IS OUTSOURCING THE ANSWER?
When government agencies can't do a project in-house, they consider outsourcing, just like commercial companies do. But as every CIO knows, that's not always the best solution.
Government CIOs note that contracting out can be expedient and politically popular. "It's actually more politically palatable to ask for money to hire consultants," says Jan Grecian, deputy CIO for Missouri. Legislators don't mind spending money on contracts that provide jobs in their home districts, because they believe the private sector can do the work for less. But increasing state salaries makes it look to the public like government is getting bigger.
"We'll never be staffed appropriately to do everything," says Aldona Valicenti, Kentucky's CIO. Her state has outsourced its telecommunications services as well as network maintenance in recent years. "There are some things we should not be doing ourselves," she says, such as designing "custom-tailored systems."
Outsourcing whole operations, or hiring a contractor to build new systems, may truly save an agency money, as well as alleviate staffing headaches. Congress has even ordered federal agencies to publish lists of potential outsourcing opportunities, assuming that private companies can do the work for less.
However, says Gloria Parker, CIO with the U.S. Department of Housing and Urban Development, it rarely pays to hire "one contractor here and one contractor there," because individual contractors cost more than in-house staff.
Oregon CIO Don Mazziotti says contractors fill "a good deal" of the state's IT staffing needs, but "you cannot give away core competencies." Every public agency has different ideas about what kinds of jobs need to remain in-house:
Mazziotti needs state employees to provide central services, such as running data centers, and "you have to have full-time employees who can manage the contractors who used to perform the outsourced work."
Paul J. Cosgrave, CIO with the IRS, agrees. "There are things that are truly strategic [and] you want to have the skills in-house for [them], like in the private sector," he says. For Cosgrave, that includes skills that deal with computer security.
Paul Light, vice president and director of governmental studies with the Brookings Institution, says, however, that more outsourcing is likely. Agencies won't be able to compete with private-sector companies, he says, and "agencies will have no choice."
A FEW GOOD IDEAS
Some strategies that state and federal CIOs pursue to attract workers State governments In Kansas, new hires can receive a signing bonus of up to $3,000 in return for a one-year contract with the state. Current employees with mission-critical skills in networking, database support and software development, among others, can get bonuses of up to 13 percent of their salaries. Other bonuses are available for learning needed skills, completing key projects and recruiting employees from the private sector and some local government jobs.
Kentucky runs general help wanted ads, rather than advertising only for specific job openings. The state has also eliminated tests for certain IT job classifications. With a possibility that 40 percent of IT workers could retire within the next few years, the state has changed personnel rules so that new employees can be hired and trained before retirees leave. In addition, Kentucky is considering a proposal that would pay off student loans for recent college graduates who work for the state for five years.
Missouri uses the Information Technology Coalition, a partnership with private sector employers in state capital Jefferson City, to advise local colleges on courses students need to qualify for state and corporate IT jobs after graduation.
Oregon plans this fall to open a new technology training center where state employees can learn new technical and project-management skills. Oregon expects to provide courses to an average of 10,000 state employees during the next two years.
The Texas IT Academy offers intensive training for IT jobs in exchange for a two-year commitment to entry-level positions in state agencies. Initially the jobs are only in Austin, but the program may expand to other locations.
Training for management jobs or for work in specific state IT projects is also being considered.
Federal government Federal Cyber Services has a Scholarship for Service program that provides two-year scholarships to undergraduates and graduate students who study computer security in exchange for federal government service. In another program, the Centers for IT Excellence, the government also plans to approve training programs that offer continuing education to federal employees.
The State Department offers recruitment bonuses of up to 25 percent of salary to new hires with needed skills. Current employees can receive retention bonuses of up to 15 percent.
The Commerce Department has hired Women in Film, a Los Angeles nonprofit group that promotes women in media, to produce two public-service announcements that dispel the nerdy image of IT professionals and to encourage teenagers to choose high-tech careers.