Tag Archives: Silicon Valley

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.


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

It’s Time to Invest in Our Country’s Future

The Dunn & Bradstreet Small Business website (https://smallbusiness.dnb.com/human-resources/careers-job-training/1151-1.html) included the following simple “reminder” that skill-based training can be of great value to your company, regardless of its size.

Training your workers can be a tremendous drain on your time and resources. But before you dismiss the idea of helping your employees learn new skills, consider the ways that skill-based training can positively affect your employees and your company.

Training increases employee productivity. 

In addition to learning how to complete new tasks and take on more responsibility, employees can learn advanced techniques to help them complete everyday tasks more efficiently. For example, sending your bookkeeper to an advanced Excel class may help him or her learn shortcuts to simplify the accounting processes.

Training reduces turnover. 

Employees who don’t receive guidance or have difficulty learning the ropes are much more likely to leave your company. Employees are less likely to leave if they have the opportunity to learn new skills and keep up within their industry.

Training improves job satisfaction. 

Investing time and money in employees’ skills makes them feel valued and appreciated, and it challenges them to learn more and get more involved in their jobs. Higher job satisfaction ultimately results in reduced turnover and higher productivity.

Training aids in the recruiting process. 

If you’re committed to training, you’ll be more willing to hire a desirable candidate who lacks a specific skill. Training also makes your company more attractive in the eyes of potential employees because it shows them that they have room to grow and accept new challenges. In addition, training existing employees could reduce the need to hire new staff.

Training rewards long-time employees. 

You’ll be more willing to promote existing employees who have learned new skills and are ready to take on new challenges.

Training reduces the need for employee supervision. 

Not only does skill-based training teach employees how to do their jobs better, but it also helps them work more independently and develop a can-do attitude.

In an article on the Community for Human Resource Management site (http://www.chrmglobal.com/Articles/289/1/Skill-Based-Training.html), they posted a similar reminder:

Changing economy and changing technology calls for talents that can face the challenges to the attainment of organizational objectives. An organization can recruit new people with the specialized skills, which is expensive. On the other hand, an organization may choose to provide specific trainings in skill areas in demand. When adequate training is imparted to the staff, it not only motivates them to work harder, it acts like a refresher and keeps their minds sharp. Skill based training guarantees continuous supply of skilled workforce to meet the ever changing environment.

The rapid growth of the Silicon Valley in the late 90’s fostered a climate where it was easier to “buy” new workers with the desired skills than to retrain the existing employees. While the efficiency of this approach is not to be denied, it also fed a skills gap within the high tech industry. Only the workers with the latest skills would be needed. Many companies looked overseas for temp workers (with H-1B visas) to fill their vacancies. While they paid premiums to the recruiting firms who carried the sought-after talent (and H-1B visas), they could quickly “refresh” their workforce at will.

According to Thomas A. Kochan, in the March 2012 Harvard Business Review, we are approaching a crisis point in our country,

Without a well-trained, well-paid, continuously improving workforce the United States cannot compete with other nations effectively—and won’t be able to sustain high and rising living standards. Yet at all levels of the economy, we behave as if we don’t believe that: Firms value short-term profits over investment in workers; federal policy makers fail to address high, persistent unemployment and underemployment; most people’s wages have stagnated for three decades, despite gains in productivity; and unions have become convenient scapegoats even as their influence has sharply declined. These realities seem to defy logic, yet we allow this human capital paradox to persist. The result: a true national emergency.

Where did this employment approach lead us? It created a skills gap within the American workforce. It developed and continues to feed the software industry where these H-1B visa workers return to. It continues to support unemployment of educated American workers (without current skillsets).

Former IBM executive and Sloan Foundation president Ralph Gomory puts it this way:

The principal actors in attaining [the nation’s] economic goals must be our corporations. But today our government does not ask U.S. corporations, or their leaders, to build productivity here in America; much less does it provide incentives for them to move in that direction…[Government leaders] do not realize that the fundamental goals of the country and of our companies have diverged. The sole focus on profit maximization, which leads to offshoring and holds down wages, does not serve the nation…We must act to realign the goals of company and country. [Gomory’s own emphasis]

It’s time for companies to include domestic workforce development into their strategic plans. As cited above, it makes good sense. In tough economic times, companies all need to watch their bottom lines, but are they paying more and receiving less?

Still not sold on the idea? Consider the recent article posted on the  Deccan Herald  website: “Need for skill based training in the corporate world” Not familiar with that newspaper? (It’s published in Bangalore, India).


Thomas A. Kochan, in the March 2012 Harvard Business Review, http://hbr.org/2012/03/a-jobs-compact-for-americas-future/ar/1

Gomory quote: http://www.huffingtonpost.com/ralph-gomory/country-and-company-part_b_174875.html

Deccan Herald: http://www.deccanherald.com/content/67497/need-skill-based-training-corporate.html