Tuesday, July 11, 2006

Staffing up & staffing down in IT


An interesting article on NPR last week about the difficulty the Oil and Gas sector (O&G) has in attracting recruits, both at blue and white collar levels. The fairly open analysis from the industry was that they had gained a very bad reputation for laying people off - particulary in the 90's nearly half of the global workforce was 'let go of' and few now see this as a long term secure career. I worked in the O&G sector throughout this time and it was my introduction to downsizing, rightsizing and BPR - and it was brutal. I will never forget seeing conservative, shirted and tied middle aged men crying at their desks as they found out they to 'had been let go of', this in many cases after 30 years plus service to the same company.

The IT industry has for some, much the same reputation - in the 90's everyone wanted to become a Java programmer and get into IT, only to see those skills quickly commoditize and become redundant.

The industry downturn in 2000 heralded massive job losses and now many younger people are uninterested in training for a career in the IT industry. But in fact the IT sector (believe it or not) handled the job loss issue with a great deal more sensitivity than the O&G sector did, and generally only let go of people when they really couldn't afford to keep them. The O&G firms fired the most when they themselves (O&G firms) were booming in terms of revenue. In addition many of the jobs lost in the dot.com bust, have returned and if anything we now see ourselves facing skill shortages.

But the very nature of IT means that we are all working ourselves out of work, as costs fall, hardware and software improve and become ever more efficient the first step is usually to outsource repetitive tasks abroad. But in time that will require less and less resource, wherever they may be located. To date this trend to outsource has clearly had a beneficial boost on the economies of India and China (for example) but I am left wondering how in 10 or 15 years time when we have automated so much and see the need again to reduce staff dramatically these economies will handle the layoff situation, will any lessons have been learned?

I have no doubt that the brutal cost slashing and job reductions will hit India and elsewhere at some point.

  • Will these periods of downsizing be handled with sensitivity?
  • Will India have a plan B and already have migrated staff to the 'next big thing'?
  • Will any lessons have been learned from the US & European experiences...

Somebody once old me that the sole purpose of workflow and document management systems was to automate processes and lay people off, with the goal of cutting costs. It's a statement that is loaded with a bit of overkill, but essentially it is correct. In fact that is the purpose of all IT, only the automating processes and laying people off elements seem to have been achieved without neccesarily cutting costs at times?

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