Staff with obsolete skills shown the door

The hungriest IT labour market in history is a fussy eater. If it wants sushi and all you can offer is quiche, you're out the door quicker than stale bread.

That has been proved by a spate of recent layoffs among IT vendors and service providers, including IBM, Hewlett-Packard, KPMG Consulting and Ernst & Young.

Those layoffs are different from job reductions at companies such as Compaq Computer and Xerox, which recently announced cuts in an attempt to bolster sagging profits. Nor are they like terminations among the dotcoms that have hit the skids. They're not workforce reductions; they're strategic divestitures of people who have unwanted skills. The vendors are dumping staffers with tepid IT skills out the back door while luring hot new talent in the front, analysts said.

These problems will have a direct impact on user companies that continue to get more of their technical specialists from contracting and consultanting firms while reserving staff jobs for business technologists with deep knowledge of their particular industry, said David Foote, a managing partner at human resources consultancy Foote Partners in the US.

"The big problem consultants have is the ability to reskill quickly enough to capture new business," said Tom Rodenhauser, president of ConsultingInfo.com. Established companies that might be loaded with enterprise resource planning skills have a real problem keeping up with the electronic-business expertise of nimble boutique players, for example. In these circumstances, retraining isn't always practical. "They've got to turn a lot of grunt soldiers into [elite troops], and that's difficult," Rodenhauser said. "It creates the strange circumstance of laying off on one hand and desperately looking for skills on the other."

Foote agreed that retraining is easier said than done. "Usually, less than 5 per cent [of workers] can do that," he said. And many have personal agendas about what training they want that may or may not mesh with the needs of their companies.

Despite the "huge emphasis" the firm puts on training, it isn't enough to get workers up to speed in highly technical areas with which they are unfamiliar.

Today, speed is everything, Rodenhauser said. "The suddenness and incredible demand for e-business projects is overwhelming for everybody," he said. "It's a feeding-frenzy mentality: How can we get our share?"

Join the newsletter!

Error: Please check your email address.

More about CompaqCompaqErnst & YoungErnst & YoungFoote PartnersHewlett-Packard AustraliaIBM AustraliaKPMGXerox

Show Comments