Finding Good News in Bad Jobs Numbers

Even for a closet nerd like me, the amount of economic-related data we have been fed over the last few months has been overwhelming. The fact that 95 percent of it is depressing doesn’t help either.

That’s why I was tickled to come across this factoid:

“According to the US Bureau of Labor Statistics, through September the overall economy has lost 760,000 jobs, while the IT sector has added 100,000.”

That data point, plus the 75,397 tech jobs posted on Dice.com this morning, underscores the fact that while other industries are suffering job loss, we have a talent shortage in IT. To validate the IT talent availability situation and to determine the impact it is having on the channel, we made it the focus of our latest Amazon Consulting PartnerG2 Report: “The 2008 North American Talent Shortage Survey – How current and future talent shortages will affect the high technology channel.” The report is based on research jointly conducted with Channel Insider.

Here’s the problem: One-third of the solution providers we surveyed said the talent shortage was having a serious or critical impact on their businesses, with the most noticeable shortages being in professional and technical services. These two job categories show up as having the biggest talent gaps and the biggest negative impact.

Lost sales, higher costs and lower retained margins were noted as the result of lower talent availability in professional services, defined as services delivered pre-sales through implementation. Technical services, defined as all post-sale implementation support, added lower customer satisfaction to the hit list of negative impacts talent shortages are having on the channel. The next biggest pinch was felt in the shortage of sales talent. This, of course, resulted in lost sales and a higher cost of customer acquisition.

There are a lot of factors driving the overall IT talent shortage, including demographics. Many of the 70 million baby boomers who will retire by 2023 are people like me who have spent their entire careers in technology. Trailing behind us boomers are 40 million Gen-Xers who may not be as gung-ho on pursuing IT careers because both the Internet bust and the explosion in off-shoring hit during their prime career development time.

What’s more, from 2001 to 2006 the number of undergraduates entering computer science programs in U.S. colleges and universities dropped 40 percent. All this means that this problem will be with us for awhile.

Maybe the solution is in the numbers. The three-quarter of a million Americans who lost their jobs this year come largely from three of the top IT-consuming industries: finance, retail and manufacturing (particularly automobile manufacturing). It seems to me that within this population, there are a significant number of skilled IT workers, or people who use IT in their day-to-day jobs. Why not retrain displaced workers for vacant, well-paying IT jobs with vendors and solution providers?

Sounds simple, but it never is. In our study the channel agreed they “own” the problem, but they also indicated that they need vendors to work with higher education, the government, and each other to address the talent shortage. It seems to me a major retraining/re-purposing of displaced workers would be a start. But that will take time.

Here are some things we can do now.

The number one channel request for solving the talent shortage was to stop the movement of entry level tech jobs off shore. So, if you are in a position to influence these decisions, take an action item on that.

Other channel requests for help with the talent shortage were all about training: they want it to be more affordable, more effective, and more accessible training. These are certainly actions or initiatives vendors can take now.

Finally, make sure you have an easy way for your channel partners to network with their peers. In our survey, solution providers indicated they prefer to address their talent shortages by working with other solution providers. When that happens, you strengthen your partner ecosystem. 

Bob Winter is a researcher and consultant with Amazon Consulting (www.amazonconsulting.com), a channel professional services firm and a partner of Channel Insider.