The coming IT job boom

Jim Ware of The Future of Work calls our attention to a recent article in the Herald-Sun (Raleigh-Durham, NC) in which IBM expresses concerns about the coming shortage of skilled IT professionals:

With a critical shortage of Information Technology workers projected in the coming years, it's crucial that university computer science departments do all they can to attract top students to the field, a local IBM official said Tuesday.

At IBM University Day in Research Triangle Park on Tuesday, leading IBM officials and university professors from across the region gathered to discuss new ways of marketing computer careers to up-and-coming students.

In addition to hearing about the work being done at individual university departments, the event provided a chance for small groups of IBM developers and faculty to meet and discuss future research projects and allowed graduate students a chance to touch base with a potential future employer.

Gina Poole, vice president of IBM's Academic Initiative, told about 120 university educators that an additional 2.2 million people will be needed in information technology-related professions by 2010.

"A lot of today's students will be filling those needs," Poole said. "The demand is building up, but the supply isn't building up fast enough."

The prediction of a shortage of IT labor seems to be in utter contradiction to the recent experience of IT professionals in the post-Internet bubble/post-Sept. 11 job market. But IBM is not the only organization making this forecast. As far back as Sept. of 2003, Business 2.0 drew very similar conclusions (full article requires subscription):

The cause of the labor squeeze is as simple as it is inexorable: During this decade and the next, the baby boom generation will retire. The largest generation in American history now constitutes about 60 percent of what both employers and economists call the prime-age workforce -- that is, workers between the ages of 25 and 54. The cohorts that follow are just too small to take the boomers' place. The shortage will be most acute among two key groups: managers, who tend to be older and closer to retirement, and skilled workers in high-demand, high-tech jobs.

To see the demographic time bomb in microcosm, just count the gray heads around your own office. At Sprint, for example, half of the 6,000 field and network technicians are over 50. At Cigna Systems, about a quarter of the 3,400 IT workers will pass 55 this decade. And at Cary, N.C., software maker SAS, more than a quarter of the staff will be eligible to retire by this decade's end. The company's VP for human resources, Jeff Chambers, says this group is filled with veteran designers and engineers, many of them architects of the company's most successful products. "It doesn't take a rocket scientist to see what's going on," he says. "Existing staff are going to start getting out soon, and the feeder pool just isn't coming up. If you're responsible for the workforce, you'd better ask yourself what you are going to do."

The same article also makes the point that most of that work will not move offshore, as offshore capacity represents only a fraction of the total expected demand. Moreover, post-9/11 immigration policies have curtailed the number of H-1B visas available.

Does this foretell a return to the salad days of the pre-bubble '90s when highly skilled IT professionals commanded high rates and generous perks? Perhaps. Predictions of a boom are compelling because they are based on demographic certainties as opposed to expected business cycles or investment patterns. Even so, the reality may play out in unexpected ways that will confound the experts.

If those predictions hold, this development will be welcome news to IT professionals still smarting from the last downturn. Businesses and staffing organizations will need to drastically rethink their assumptions about the nature and makeup of the contingent workforce.