The Four Hundred

The current economic downturn--some say recession, despite the statistics--is causing OS/400 shops to lock down their hiring of junior programmers. According research performed by Nate Viall & Associates, hiring of junior programmers was down 86 percent this spring. This is an alarming development for the near term, and a potentially huge problem for the long haul, for newbie programmers, who want to work, and the OS/400 community, which needs a steady supply of reasonably seasoned coders.

Before I get into the statistics and anecdotal evidence that Viall has gathered about the OS/400 programmer market and correlate it with statistics from other researchers who follow the hiring of college graduates, let me say that I have nothing against companies that give employees with 20, 25, or even 30 years of IT experience great jobs and pay them well. There's absolutely nothing wrong with working until you are 60 or 65 (or even 67.5, as Uncle Sam says I have to if I want to get my full Social Security benefits when I retire 30 years from now). I am a firm believer in finding and retaining experienced employees. But I also think that companies have to plan for the future, and that means keeping a steady supply of newbies on board, too. Today's newbie programmers are tomorrow's hotshots, and if someone doesn't hire them now they won't be there 10 years from now. They will do something else because they can't get the experience they need in programming to get a good job as a programmer. We don't need any more doctors and lawyers, do we?

When Viall talks about junior programmers, he means programmers with three years' or less experience. That hires of junior programmers were down 86 percent from last year means that, where OS/400 shops had hired 100 junior programmers this time last year, they hired only 14 junior programmers this year. Think about that for a second.

This is a much more drastic drop off than might be anticipated, based on a survey of employers across all industries performed by the National Association of Colleges and Employers, based in Bethlehem, Pennsylvania. NACE released a report in April indicating that, on average, employers say their hiring of college graduates at the end of 2001 and in early 2002 will be down by 36.4 percent compared with the hiring they did during the same time in 2000 and 2001. Hiring in the services sector was down by 27.1 percent. In the manufacturing sector--a big part of the OS/400 installed base--hiring was down by 51.7 percent. Nonprofit organizations reported hiring would be down by 22 percent, while federal government agencies said they expected to increase employment of recent college grads by 16 percent. Consulting organizations reported that hiring of college grads would be down by 89.7 percent.

Perhaps more striking are the NACE forecasts for the fall 2002 hiring season. NACE said that 12.8 percent of those surveyed expected to hire more college graduates than they did in fall 2001, 11.5 percent said they would hire fewer college graduates, 31.7 percent said their hiring would be about the same, and a whopping 44 percent said that they had no way to provide any kind of forecast whatsoever. OS/400 shops are part of a larger business community, and with these statistics it comes as no surprise that the knee-jerk reaction to free hiring of new programmers is happening now.

This is not the first time that the hiring of junior programmers at IBM midrange shops has dropped precipitously. During the transition from the System/38 to the AS/400 in the late 1980s, the economy also stunk on ice and companies cut back sharply on hiring junior programmers. In the last recession, in the early 1990s, OS/400 shops also stopped hiring large numbers of junior programmers, says Viall. The peak hiring days for inexperienced programmers were in 1998 and early 1999, when the Y2K modernization effort was underway and many companies used the Y2K crisis as an excuse to implement new applications, as well as update old ones. This was also the height of the dot-com boom, when many companies were scrambling to figure out how to Web-enabled their applications.

Viall says that in the mid-1990s the average AS/400 programmer had 11 to 11.5 years of total IT experience and between 7 and 7.5 years of iSeries experience. By spring 2002, the average IT career experience across all programmers at OS/400 shops has increased to 18 years, but the OS/400 platform experience of these programmers, on average, is only 9.6 years. This widening gap between overall IT experience and OS/400 experience suggests that companies are hiring entry-level OS/400 programmers to do the jobs of junior-level programmers and are ferociously holding on to their seasoned programmers. The fact that salary increases for the most experienced programmers consistently track higher than the averages in the OS/400 market, and that salary growth for entry and junior programmers consistently tracks lower than the averages (and even declined by 1.6 percent, according to Viall's latest survey) across all levels of experience, also suggests that companies are not investing in their future by investing time and money in entry and junior programmers.

While Viall does not track the ages of the people who contribute salary and other data for his compensation reports, he says that, based on anecdotal evidence, the average OS/400 programmer is 35 to 40 years old and that historically they tend to retire at around 60. He also says that the OS/400 market could lose anywhere from 20 to 25 percent of its technical staff through retirement or attrition in the next few years-- again based on anecdotal evidence, gleaned from talking to OS/400 shops. If companies don't start hiring and training programmers, there is going to be a severe shortage of junior and experienced programmers, and that is going to drive up personnel costs and the application backlog at the same time. We are now early enough in the cycle that progressive companies can start planning for this future and get the junior programmers in place, so when their seasoned programmers retire or jump to other companies they are at least somewhat prepared. The IT business and the data centers that house technologies to run companies are driven as much by people as by hardware and software technology. A company that is willing to invest in advanced hardware but not in programmers to make the best use of that hardware is only getting half as much out of its investments as it could.