Tag Archives: Baby boomer

Should the Technical FTE Role be Dead?

At one point in our history, it was commonplace for a worker to join a company upon leaving school and stay with them until retirement. There was a perceived loyalty between employer and employee.

Life was good … or was it?

Did the employer really care about the educational or professional “growth” of the employee? Conversely, did the employee continue to bring new ideas and energy to the workplace after 20 years on the job?

As the Baby Boomers (post WW-II babies) entered the workforce in the 70s, jobs were plentiful. “Job hopping” became a common term as Silicon Valley companies competed for skilled laborers. The recession of the early ’80s caused many of those workers to search for the “secure” corporate work-life of their parents, only to look again for that “brass ring” as the economic carousel took another spin around with the tech/Dot-com boom of the 90s.

Now, as recovery begins again, should technology workers be looking for the “security” of a long-term, single employer job? Should employers look to beef up their internal workforce again or drive their business with contractors?

For the employer, the positive financial tipping point for the FTE option appears to lie somewhere during or after the third year of employment. An excellent financial analysis of several employment scenarios was produced in 2009 by a team at Greythorn, a subsidiary of the FiveTen Group, an international recruiting/contracting firm. A link to the associated slide presentation is provided here.

For the worker, the financial benefits of contracting depend largely on the skills of the individual and the business choices he or she makes along the way. The keys to contractor success are:

  1. have something to sell, i.e. a skill that is in demand,
  2. set the price appropriate to quality/skill level and market demand, and
  3. market the deliverable well.

Being a successful contractor is not rocket science. It “just” requires effort.

Beyond the financials, the real question is: Should the long term, full-time employee (FTE) model be replaced by shorter-term IT workers?

The answer may lie buried somewhere between the speed of technology change and the inability of managers to properly project their needs. Certainly, in a stable work industry, managers can assess attrition and train internal staff to fill those empty positions and hire new employees into “entry-level” positions. Traditional, predictable, effective.

As the speed of technology change increases, it becomes more difficult to project needs several years in advance. The window to build expert skill levels within the internal resource pool decreases. Especially when “bottom line” costs are scrutinized, training seems to be an easy choice for managers to move into “next year’s budget”. Failure to invest in training at the right time, leaves an employer few options. They have to depend on contractors.

The workers, on the other hand, bear a significant responsibility for their own fate. Train, study and be aware of technology/industry demands or become unemployed. While the cause-and-effect is obvious, it’s commonly ignored. It’s not a life-lesson taught in high schools or undergraduate degree programs, but it should be. It is the worker’s responsibility to stay current with skills that are in demand. Education is not something that ends in your early 20s. Education a life-long process.

The manager may be asleep-at-the-switch, but the worker, who will be impacted most with a layoff, must push for the technical training to stay current and to be prepared for “the next big thing”. That training might be on-the-job (e.g. a “stretch” work assignment), outside reading/study or a volunteer work effort.

Similarly, contractors and short-duration workers must include training and/or growth work placements to continually enhance their marketability.

Who benefits from this employment model shift?

The employer benefits with a more nimble, up-to-date technology work force. The worker benefits by taking personal responsibility for his or her continuing technology education.

So what happens to the Tech FTE?

Some technical long term employees include management skills in their training. They move up and out of the technical resource pool. Others, especially those who fail to stay current, move to the dead-end, but, at the time, necessary jobs that all companies seem to have.

The risk that many companies and public agencies face is related to the long-term employees, who fail to continue their education/training but continue to “occupy” their desks. Some are retained because they possess specific subject matter knowledge about the installed systems. Others maintain their grip on their chairs by doing just what is required to get by. While I am a strong supporter of unions and their role in protecting worker rights, I am not a supporter of a seniority system that protects poor performance.

Say Good-Bye 

In my opinion, it’s time to be realistic. The technical FTE position is not good for the employer or for the worker. It builds a false expectation of stability within the tech workforce and, to paraphrase Karl Marx, the Tech FTE role “is the opiate of the [tech] masses”.

Business needs to acknowledge their inability to maintain long-standing technical work forces and be honest with their employees,

Stay current or you will be gone!

Harsh words, but they are a reality.

Tech workers need to step up to the plate, turn off the TV and continue their education/training. They need to stop blaming immigrants and younger workers for their employment problems. With age can come perspective, but perspective without current knowledge is of little value.

Today’s tech workers need to build their own futures and not look to others to do it for them.

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Background Materials / Blog Postings

“Those Job-Hopping Baby Boomers”, by Monika Hamori, Sept 2010, http://blogs.hbr.org/cs/2010/09/job_hopping_do_boomers_and_mil.html

Cost Analysis … The Real Costs of Contractors versus Full Time Employees, A Greythorn White Paper (part of the Five Ten Group),  1Q 2009, http://www.slideshare.net/rprosio/REAL-Costs-of-Contractors-1075420

Goodbye “Boomers” … Hello ???

Gen-X, Gen-Y, Baby Boomers … What do they have to do with business?

According to national labor statistics, a significant portion of the US skilled workforce (manufacturing and professional) is approaching or has already reached traditional “retirement age”, 65 years old. When they retire, will the next generation be ready to take over?

This is not a statistical anomaly. It is a consequential impact of the Baby Boomers (born in the 1950s) reaching retirement age. Considering just the work segments involved in Professional, Scientific and Technical Services, the share of the workers aged 55-64 has increased by 45% over the period of 2000-2007. This statistic was one of several highlighted in a July 2010 Industry Sector Report published by The Sloan Center on Aging & Work at Boston College. That report points not only to the problem, but also discusses some of the “organizational responses” (mitigation efforts) currently being undertaken.

The 2010 Sloan Center report described changes that have occurred from the height of the dot-com era (2000) to just prior to the current recession (2007). While the economy has shifted since 2007, the relevant workforce statistics have remained relatively constant … we are all still getting older.

Projecting the key age-shift trend from workforce distribution graph above, it is easy to infer that it is likely to continue for at least another decade. The retirement-ready workforce will continue to grow relative to its current levels and relative to other segments of the workforce.

This generalized increase in the “senior” population has an obvious cost impact on our social support and health systems. It additionally has significant potential for an impact on business. Included in this work resource population are the managers and the subject matter experts that many businesses depend on. Who will fill their positions?

In the Portland, Oregon, metropolitan area, specifically Multnomah and Washington Counties, the workforce distribution appears to be shifted even more than the national average (toward that pre-retiree group).

Worksource Oregon, in their 2008 Employer Survey for Region 2 (Multnomah & Washington counties), highlighted that more than 40% of local businesses surveyed are already responding to this shift and are planning to take (or have already taken) steps to guard against the ensuing knowledge / skill losses. Many are attempting to retain these “senior” workers with flexible working arrangements and other accommodations to encourage their retention. Several businesses are instituting in-house mentoring programs to raise the skills and subject matter knowledge of mid-level employees.

These are admirable steps taken to mitigate this population shift issue. Luckily, most businesses do have the raw (mid-level) talent who can step up to fill these gaps that would be left by the over-55 age group as they leave the workforce.

The next question is: Do these companies also have the resource pool available to backfill those mid-level positions? Unfortunately, this answer is not as encouraging.

In Multnomah and Washington counties, there are already significant skill gaps between the abilities of available workforce and the skills that employers are looking for. Job-specific experience is a requirement for more than 80% of the professional/technical job openings in this area. At this time, there is not a new population of skilled local workers ready to step up to fill the next wave of mid- and entry-level positions.

It is time for local companies to accept that this is a resource crisis that looms at the horizon. The available resource pools are small today and they will only get smaller as the years progress.

As they are doing with the impending impacts of their aging workforce, companies should also address their downstream needs for additional entry-level, skilled workers. On-the-job training programs, mentoring initiatives and apprenticeships are all steps that can have a positive impact on this resource need. The longer companies wait to start their mitigation steps, the greater the impacts can be.

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Additional information related to this topic can be found in:

Talent Pressures and the Aging Workforce: Responsive Action Steps for the Professional, Scientific, and Technical Services Sector”, a report written by Stephen Sweet, PhD and Marcie Pitt-Catsouphes, PhD with Elyssa Besen, Shoghik Hovhannisyan, MA, and Farooq Pasha, MA. Published by The Sloan Center on Aging & Work at Boston College, July 2010.