Friday, December 12, 2008

Do economic downturns weed out I.T. professionals "permanently"?

Do recessions and downturns weed I.T. people out of the field? This sounds like a brutal question, one with moral overtones.

But so it seems. When times get harder, employers pressure their people more. It’s always been like that. I remember working at Chilton (the Dallas credit reporting company that now is effectively Experian) the pace was cordial and comfortable until after 1985 when Chilton was acquired by Borg-Warner, and then Borg-Warner took itself private in a leveraged buyout under pressure from corporate raider Ivan Boesky. (I remember the alliterations: “le beau arbitrageur; la belle arbitrageuse”).The pressure in those days was to break up conglomerates into pieces and sell them, resulting in more consolidation and economies of scale and higher profit margins. Hostile takeovers were bad for the idea of employee loyalty to company and union and lifetime employment, but good for entrepreneurs. It was particularly bad for people who depended on corporate benefits (for family reasons) but good for (often single) people who could live off of piecework.

The “creative destruction” did help bring about modern Internet culture and the opportunities therein, in areas like low cost films, various new Internet businesses (unfortunately going through a dot-com bust). It led to some real wealth but displace many people. Today’s problems are much more serious. First, there is the threat of scarcity (associated with fuel and global warning) which could be met by further extension of innovative ideas, like an “energy Internet”. But there is also loss of confidence in the integrity of markets, leading to the massive job losses now. (Some of the losses, however, simply come in foolishly run industries like some of auto where manufactures made things people no longer wanted to buy, and some are related to unsustainable union benefit and retiree entitlement structures .)

In any case, the effect on jobs is similar. The people who are kept are those with the absolutely essential skills to keep a business going. The people who can become easily re-employed are those with targeted expertise.

In information technology, the picture is so mixed. For years, business mainframe programming had a good reputation as a stable career field. It grew in the 1970s, despite recession, because commercial business automation was increasing rapidly. It dipped a little around 1980, then picked up again before the 1982 severe “Reagan recession” ended, then dipped again in the late 1980s with the corporate buyouts. In the 1990s, the job market exploded in the Internet, but the mainframe really picked up again only as Y2K approached. Many mainframe programmers already had resumes with unstable companies, outdated experience (like UFAM), and erratic histories. But they were needed for Y2K. Afterward, mainframe programming would tend to appear mostly in W2 or corp-to-corp contracts, where clients looked for very specific lists of advanced “job-ready” skills in major areas.

In such an environment, some people will drop out, or be flung out by downturns. The question is whether older programmers in the mainframe area will be needed again. There has not been a consistent pattern. Employers look for very specific areas of expertise (like IMS, case tools, etc) where there are fewer people left with these areas.

There’s a bit of unfairness here. Placement companies need to find competent professionals, but with an unstable market, a programmer can’t afford to bank on an “online reputation” based on outmoded technology. So they venture into new things. But the newer, OOP languages and technologies are rather non-linear in terms of intellectual skill, compared to the procedural languages of the past (especially COBOL, along with IBM MVS JCL, which is simple in principle even if verbose and tedious). The people really good at the “new skills” are young, because they grew up with them and mastered them, sometimes as teenagers, the way people master playing musical instruments. At a pedagogical level, there is some similarity between the “geek” and the musician (often the same person is both). It’s not easy for someone in his 50s to get that level of skill (Gladwell’s 10000 hours of practice) unless he gets the opportunity to do an entire project through implementation and given time to learn the new technology.

This is all unpleasant, when you look at the popular advice. “Do grunt work.” “Depend on family and friends.” And the real double cross: “Watch your online reputation”. That depends on your real world reputation after all, and sometimes on external factors you cannot control.

The new Obama administration really needs to look at ways to give employers more incentive to offer paid training.

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