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Why Staffing Your Projects Will Get Harder

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In addition to all of the other constraints you will have to operate under in the coming years, you will have to face one crucial fact: The pool of highly skilled workers is not expanding as fast as the demand. There are several reasons for this, and a practicing IT project manager, as a “consumer” of skilled labor, needs to understand them.

Unemployment Will Soon Be about Inadequate Skills

Since the employment recovery began in February 2010, the U.S. economy has added nearly 16 million jobs, and the steady tightening of the labor market has finally started to deliver wage growth for workers, with wages increasing 2.8% over the past year. At this writing, the US unemployment rate—the percentage of people actively looking for a job—has dropped to 4.5%, essentially the level just prior to the Great Recession. However, the employment rate—the percentage of the whole population that is currently employed—remains below prerecession rates at 60%. This likely indicates that many people have exited the labor market due to long-term unemployment and have not yet reentered. When they do start looking for jobs, the unemployment rate will start to go up. But the potential labor pool will include a lot of folks with out-of-date skills.

For most other countries, the metrics will vary but the trend is probably similar. These long-term unemployed folks will require an investment of time and money to upskill them, and most organizations have been reluctant to do that. But the alternative, not staffing up to meet opportunities, represents a significant opportunity cost.

Training Capacity Won’t Meet the Demand

The good news is—corporate spending in the US continues to grow, after a long period of cost-cutting. The bad news—only 6.7% of that spending, estimated at $70 billion in the US and $130 billion around the world, is going to information technology and systems training. Most organizations are focusing their training spending on developing the leadership pipeline. There are a number of reasons for this, but the most obvious is that the Boomers are retiring in ever increasing numbers. Consequently, the industry’s capacity for IT training is not growing as fast as the need for it, because the spending is not growing at that rate.

So even if your employer decides to invest in upskilling the long-term unemployed, you should expect that skilled labor pipeline to have a small diameter and a limited flow.

The Trump Administration Wants to Narrow the H-1B Visa Program

The H-1B visa program allows a company to bring high-skilled guest workers to the United States for a period of up to three years, extendable to six years. These workers typically have qualifications in STEM fields but not always. In 2017, applications for the visas dropped below 200,000 for the first time in three years, but that’s still far more than the statutory cap of 85,000. The program has been criticized for bringing in low-paid workers, thus depressing wages in these fields. However, the unemployment rate among those with STEM skills is far below the national rate, so there’s no evidence that substantial numbers of highly skilled workers are on the sidelines.

On April 18, President Trump issued an executive order designed to change how the program is administered to ensure visas are awarded to the most-skilled workers at the highest wage levels. Administration officials said that only about 5-6% of H-1B workers receive salaries in the highest wage tier recognized by the Department of Labor, whereas 80% receive less than the median wage, and only 10% receive the median wage. Most of the changes in the order will require action by Congress, but you should expect to see a gradual reduction in the number of STEM-skilled workers available for your projects over the next few years.

A Partial Solution: Minimizing Waste

The days of a dedicated team working on one project may soon be over. As organizations use more contingent workers (the “gig economy”), they will be less dependent on in-house skills. That said, on-boarding and spinning up these temporary team members will require a lot more of the project manager’s attention. We’ll need to get very good at processing starters and leavers. We’ll also need to focus on knowledge retention, from documentation to folklore. That will mean a cultural change for most organizations, and we’ll be in the thick of it. But the ability to minimize the disruptions to our projects and maintain on-time, high-quality execution will propel successful project managers into that leadership pipeline I alluded to earlier.

 

For more brilliant insights, check out Dave’s blog: The Practicing IT Project Manager

And are you involved in a data conversion project? Then check out Dave’s indispensable book: The Data Conversion Cycle

About Dave Gordon

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Dave Gordon is a project manager with over twenty years of experience in implementing human capital management and payroll systems, including premises-based ERP solutions, like PeopleSoft and ADP Enterprise, and SaaS solutions, like Workday. He has an MS in IT with a concentration in project management, and a BS in Business. He also holds the project management professional (PMP) designation, as well as professional designations in human resources (GPHR and SPHR) and in benefits administration (CEBS). In addition to his articles and blog posts, he curates a weekly roundup of articles on project management, and he has authored or contributed to several books on project management. You can view his blog at The Practicing IT Project Manager by clicking the button below.

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