IT Talent Crisis Redux: This Time, It's About Business Analysts

As unbelievable as it sounds, the Second Coming of an IT talent shortage is upon us. This next talent gap won't show up at the entry level, however. It's emerging much further up the food chain, where more sophisticated projects require something midmarket companies are increasingly hard pressed to find.

"I'm having a heck of a time filling business analyst positions," says Joe Tait, vice president of information services at R&B Inc., a $250 million aftermarket automotive parts distributor in Colmar, Pa. The shortage will be unlike any that technology executives have seen before, even during the talent wars of the late 1990s. Those were the days when CIOs would give BMW sports cars as signing bonuses and hire anyone who could design a Web page.

This shortage isn't actually in the numbers yet. Earlier this year, the American Electronics Association reported that high-tech employment is slowly turning the corner, with job losses finally tapering off. The U.S. high-tech industry lost 25,000 jobs last year to finish with 5.6 million; that pales in comparison to the 333,000 jobs lost in 2003 and the 612,000 jobs lost in 2002.

And for the first time since the start of the millennium, software services and engineering and technology services have added new jobs to the economy. New York-based Monster Worldwide Inc.'s March 2005 employment index also showed a massive spike in online demand for high-tech workers, jumping more than 20% from the same period last year.

Talent Pipeline Slows to a Trickle
Once the talent shortage punches holes in midmarket CIOs' IT departments, industry watchers don't foresee relief anytime soon.

With fewer qualified candidates at the highest echelons of IT, all eyes turn to the next crop of tech whizzes in hopes that someday -- five or 10 years down the road -- they'll fill the gap. But the number of computer-science graduates is shrinking across the country.

Georgia State University's J. Mack Robinson College of Business in Atlanta reports that enrollment in computer information systems programs has fallen by more than 60% in recent years.

"In August of 2000, when unemployment among computer professionals was at 1.9%, we had nearly 2,000 students in our information systems programs," says Richard Baskerville, chairman of Robinson's department of computer information systems. "Today, there are fewer than 700 Robinson students preparing for careers in this area. ... It will take years to spool up our programs again."

Joe Tait, vice president of information services at R&B Inc., a $250 million aftermarket automotive parts distributor in Colmar, Pa., also volunteers at the computer science departments of nearby Temple University and La Salle University. He notes that a myriad of factors contribute to slack enrollment. Chief among them is technology's shaky future. "One of the theories is that the dot-com bubble burst has parents telling their kids not to pursue an IT job," he says.


Echoing these findings, Staffing Industry Analysts Inc., a Los Altos, Calif.-based research firm covering the temporary staffing market, predicts 10.5% growth in spending on temporary IT staffing services this year, after three years of decline following the dot-com bubble burst in 2000. "It looks like the IT market has recovered," says Barry Asin, executive vice president at Staffing Industry Analysts. "There's a big backlog of IT projects, and companies are finally getting the budget to address them." Forrester Research Inc. of Cambridge, Mass., expects IT budgets to grow by an average of 7% this year. Hence, the demand for IT work is clearly growing.

But there's not necessarily an increased demand for all IT workers, and that is what lies at the crux of the talent shortage. Many backlogged projects incorporate novel technologies, such as Web services, Linux and business intelligence tools, and thus require IT workers skilled in those areas (see "High-Tech Skills in Demand"). Today's technology projects also need so-called business analysts, an emerging class of worker who's cross-trained in business, technology and corporate culture. "The shortage of the 1990s was a phenomenon driven by Y2k and the dot-com boom, and pretty much anyone with IT on their resumés was getting hired," says Craig Symons, an analyst at Forrester. "Today, it's much more focused on key areas ... and the number of people with this experience is always limited."

While many casualties of recent layoffs will no doubt seek training to move up the value chain, Symons warns that "some probably just don't have the raw material because these [higher] positions require different competencies."

This was first published in June 2005

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