Hanging on to IT Jobs in a Post-Recession World

Ann All

Not long ago, I wrote a post about how cloud computing will eliminate some percentage of IT jobs. And it isn't just the cloud, of course, but other forms of outsourced and/or automated service as well.

 

Just last week, I interviewed The Hackett Group's Michel Janssen and Erik Dorr, who shared their belief that nearly 2 million IT jobs in North America and Europe, part of a larger group of 3.6 million general and administrative positions, will be eliminated between 2000 and 2014. The two men told me we are now seeing a major economic shift that will parallel what occurred when the United States moved from an agricultural to an industrial economy, then transitioned from an industrial to a services-based one. A combination of macro-economic factors, offshoring of some jobs to low-cost countries and improved productivity are forcing the change, they said.

 

While offshoring tends to grab the lion's share of attention (and the public's ire), the two men said productivity is the bigger factor. Said Dorr:

... If you take a hundred-year trend line, GDP growth is almost completely correlated with productivity growth. You produce more stuff with fewer resources. That's the essence of growth. Short term, there will always be pain in adjustment. That's what we are going through right now.

And IT is a primary driver of enhanced productivity. Janssen said:

... It's not a movement of jobs in many cases, it's just an elimination. Why have a whole floor of accounts-payable clerks going through invoices when you can automatically route those through systems? IT is aiding and abetting productivity. It's a one-two punch. We've always thrived with productivity. The cost of an accounts-payable transaction is a lot cheaper if it's automated. Nobody thinks it's a good thing to have those 50 accounts-payable clerks on the third floor. In the real world, you get rid of three HR generalists that are adding very little benefit when self-service can be the real play. But you need somebody to manage the talent around the world. You get rid of three $75,000 positions, and add one at $150,000.

Dorr and Janssen said companies will find themselves in a "talent war" for folks with more sophisticated skills, even as they eliminate a growing number of general G&A jobs. What will companies look for? Though IBM took a lot of heat for offering laid-off North American employees jobs in low-cost locales like India, the two men said experience in emerging markets will appeal to employers. And as IT Business Edge blogger Don Tennant recently wrote, proficiency in a foreign language or languages will be a plus, too, as many companies look to expand their global reach.

 

Not all jobs will require global skills, of course. But they will involve new competencies. We've been hearing for years about the need for IT pros with broader business skills, but the trends highlighted by Dorr and Janssen appear to be forcing the issue. (Lest you think IT executives will get a free pass, many folks agree CIOs will need to beef up their business skills, too.)


 

I found comments from Senad Hadzic, CIO of KaMin LLC, a spinoff from chemical company J.M. Huber, interesting. When Forbes interviewed Hadzic about the spinoff's IT strategy, it found the company had outsourced all of its servers, network infrastructure and technical support while keeping "business process know-how, the analytical skill set and anything related to customers, management and transportation" in-house. When asked what he sought in an employee, Hadzic said:

What I'm looking for are people familiar with the business process. I'm hiring business analysts who can take IT to the higher level. The old way of looking at IT is gathering requirements, buying the equipment and turning it on. There's a big assumption there that people know what they want. In today's world everything changes so fast it's hard to pinpoint what people need. I'm looking for people who can take us to the next technological level. They have very profound business/leadership and project management. The technical skills are secondary. I can buy those off the shelf.


Add Comment      Leave a comment on this blog post
Dec 16, 2009 4:07 AM Edward Dinovo Edward Dinovo  says:

This article is very typical of a continuing theme in information technology: the need for domain-specific knowledge.

So many times I have seen groups unhappy with the candidate they've selected because they either lack the computer knowledge or they lack the domain knowledge -- both are required in most industries. It facilitates trust, the engagement of stakeholders, the gathering or requirements, and the continuous feedback that is necessary to maintain, improve, and adapt the IT system.

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