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  • As I See It: Revenge of the Wise

    January 16, 2006 Victor Rozek

    Just two years from now, 40 percent of the American workforce will be 45 years of age or older. By 2012, one-fifth of American workers will be over 55. As Bob Dylan said, you don’t have to be a weather man to know which way the wind blows. The workforce is aging (or maturing as I prefer to characterize it, being a Boomer myself), and that may be the best news beleaguered IT professionals have heard in a long time–especially those who are 35 and older.

    The imminent retirement of the bountiful Boomers (all 78 million of them) will create a knowledge drain that will strain America’s competitiveness for the next 20 years. And this at a time when many economic sectors are already reporting a shortage of qualified employees. That’s bad news for the nation’s future, but good news for IT professionals with strong technical skills and industry-specific knowledge. As the opportunistic Chinese–beneficiaries of our outsourcing, trade imbalance, and borrowing practices–have discovered, in someone else’s crisis there is opportunity.

    Loathe to see beyond next quarter’s profitability, corporate America has been slow to notice the draining of the expertise pool. Rather than developing and maintaining critical proficiencies in-house, companies hope to either find them abroad or rent them from an IT service provider. Meanwhile, corporations are blissfully cutting pensions and health care benefits, disenfranchising the very workers that one day soon will hold the key to their success. It’s akin to abusing your health and then wondering where your vitality went. Already, skilled older workers are leaving for places like Canada in search of affordable health care, taking precious institutional knowledge with them.

    As a hiring strategy, going with the low-cost provider has its limitations. Ultimately, every company needs people who know the business and understand the industry they serve. A $10 an hour programmer in Zhangzthou will provide neither. Wisdom is, in large part, a product of experience, and experience comes with age. And, like any shrinking commodity, experienced workers will increase in value as their availability declines. It therefore seems counterproductive for the business community to estrange the very people who possess a shrinking resource on which it ultimately relies. When the house is on fire, it’s not a good time to alienate the fire department.

    And make no mistake, the house is smoldering. Lewis Branscomb, professor emeritus in public policy and corporate management at Harvard, warns that the U.S. is losing both its competitive edge and its innovative advantage. The numbers aren’t encouraging. In just the last two decades, the U.S. share of global production “has fallen from 30 percent to 17 percent.” Although a portion of the decline can be attributed to the migration of manufacturing, future production will be fed by product innovation and fresh technologies, which are the products of engineering talent. Here, too, the numbers are discouraging. China graduates more computer engineers annually than the United States. In fact, “about 59 percent of undergraduates in China study [some flavor of] engineering,” says Branscomb. “In Japan, the number is 66 percent. In the United States, only 32 percent.” Nor can we depend on those in the scholastic pipeline to bridge the gap. “In head-to-head matchups with other countries, U.S. high school seniors consistently score lower in general mathematical and scientific knowledge.”

    The combination of the Boomer brain drain and the dumbing down of the nation’s youth will create a talent shortage in a job market where fewer people are already being asked to do more. The silver lining in this dark national cloud is that domestic IT expertise will go up in demand as well as value. Initially, the greatest opportunities will lie with smaller companies and start-ups. While large companies are full of non-impact employees who perform repetitive tasks capably but are not expected to be creative or innovative; new firms, by definition, have limited staffing and a pressing need for skills and expertise. Their survival depends on getting the absolute biggest bang for their hiring buck. Whatever the nature of the business, hiring IT talent will be a crucial element to its success. And when survival is at stake, hiring managers will prefer maturity and real-world experience to youth and potential.

    Large corporations, obsessed with driving down labor costs, have been slow to understand the value of their older workers. The American Association of Retired People (AARP), an organization with an unapologetic interest in the welfare of Boomers, has a “Best Employers for Workers Over 50” program, which tries to match worker’s skills with company needs. Staffing agencies, health care providers, retail, insurance, and communications companies are well represented. But of the 25 companies listed on AARP’s Web site, not a single IT company made the cut. That may be a reflection of the youth culture that dominates software development, but it’s a small worry. IT is the common denominator in all serious business endeavors and each of the listed companies is sure to have a substantial IT department. Job opportunities for IT professionals will not rely on the industry itself.

    Cost is often cited as the key consideration that makes hiring older workers undesirable. But the high cost of experience is largely a myth. Research conducted by the Institute of Electrical and Electronics Engineers reports that older workers are no more costly than their younger counterparts. For one thing, they are less likely to job hop, so their higher salaries are offset by lower turnover rates, reduced recruiting costs, and decreased training expenses. Nor, apparently, do they take more sick days than younger workers. Plus, they hit the ground running. The mix of leadership, project and people management experience, wisdom, and skill are a formidable combination–and less likely to be found in younger workers.

    At the moment, it takes unemployed older workers about half a year to find a job-seven weeks longer than their younger counterparts. But that’s about to change. The Bureau of Labor Statistics forecasts that over the next decade, the ranks of workers over 55 will grow at an annual rate of four percent. That’s four times faster than the labor force as a whole. It will be the reversal of a long held and unquestioned axiom that job opportunity decreases as workers age.

    Older workers have been kicked around for a long time; slow to be promoted when business booms, quick to be laid off when business flags. A 2002 AARP survey of 1,500 older workers found that two-thirds experienced age discrimination in the workplace. Sixty percent said they believed that older workers are the first to go when employers make cuts.

    But their fortunes will change if for no other reason than the fact that very, very soon hiring the mature will be the only game in town. In the meantime, corporate management would do well to heed the wisdom of French Premier Georges Clemenceau, who admitted “All that I know I learned after I was thirty.”

    That’s the hope at least–that wisdom increases with hair loss. It’s comforting to believe that wisdom is the compensation for decay, though there is much evidence to the contrary. At the very least, career IT professionals who have labored in the vineyard through the heat of the day will be rewarded with the great gift of still being needed as their working day draws to an end.

    For all our sakes, lets hope Clemenceau was right and that we do indeed grow wise with age and are not just slow learners.

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    Tags: Tags: mtfh_rc, Volume 15, Number 3 -- January 16, 2006

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TFH Volume: 15 Issue: 3

This Issue Sponsored By

    Table of Contents

    • BPs to Be Briefed on Upcoming iSeries Announcements on January 19
    • IBM Cancels Systems & Technology Group University Event in Las Vegas
    • Mainsoft, IBM to Convert .NET Code to Java on All eServers
    • AMR Predicts SMB IT Spending Growth to Be a Paltry Few Percent in 2006
    • OpenSolaris Community Creates Kernel for Power Chips
    • Lakeview Picks VP of Sales, Inks Reseller Deal with Kirchman
    • IBM Tops U.S. Patent List for 13th Straight Year
    • LXI Appoints New Chairman, VP of Business Development
    • As I See It: Revenge of the Wise
    • IBM Creates New TCP/IP and Ethernet PTF Group

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