Part III



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Building a Workforce for the Information Economy Part III

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Building a Workforce for the Information Economy This page in the original is blank.

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Building a Workforce for the Information Economy 8 Synthesis, Principles, and Recommendations 8.1 SYNTHESIS AND FINDINGS As described in Chapter 1, the IT sector and the IT-intensive industries are key pillars of the U.S. economy, and they continue to remain competitive and be a locus of innovation. They are technologically dynamic, and they have had or been responsible for enormous economic success by any measure. IT is generally regarded as an engine of growth and change across the economy, and there is a growing body of evidence that IT is playing a significant role in improving national productivity, and that any constraints on IT production and support—such as those that might arise from excessive tightness in the IT workforce—may have a pervasive impact on the growth of the economy. While market adjustment is occurring, the labor market for many IT positions is tight today and likely to remain so for the immediate future, barring dramatic change (Chapter 3). This tightness is not uniformly distributed across all positions, all geographic regions, or all levels. There are many reasons for tightness in the IT labor market. The fundamental drivers of tightness are technological change and growth in the use of IT applications. To the extent that information technology continues to change rapidly and growth in the demand for IT applications continues to occur, individuals with experience in and/or knowledgeable about the newest technologies will be in relatively short supply. Furthermore, high growth creates conditions such as high wages in the IT sector and in IT-intensive industries that can drive turnover rates higher as

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Building a Workforce for the Information Economy workers seek jobs with higher wage offers with other firms—or that can lower turnover if the current employers are willing to match or exceed higher offers from those other firms.Nevertheless, turnover can occur for reasons other than wages as well. Nevertheless, growth in the use of IT and technological changes would not lead to tightness in the labor force if the available supply of qualified labor were to grow at commensurate rates. Sources of qualified labor include new domestic entrants into the workforce, incumbent workers already in the IT workforce (both those with up-to-date skills and those who can be retrained for new jobs), incumbent workers who might otherwise drop out, workers in other fields who might enter IT work if appropriate training is available, currently unemployed workers, “discouraged” workers who do not count in unemployment statistics, and foreign workers who can either be brought to the United States or work in their home countries for U.S. companies. Students, workers, and employers have started to respond to tightness in the IT labor market—for example, enrollments are up in computer science degree programs, and employers are taking many of the steps described below to increase supply. But under conditions of sustained growth in demand, it may be difficult for supply to ever “catch up ” completely. Under conditions of a tight labor market, employers must seek workers from the broadest possible pools of talent. On the assumption that the distribution of human talent does not respect ethnic, racial, or national boundaries, this is fundamentally the “enlightened self-interest ” rationale for employers seeking out workers from underrepresented groups (e.g., women, minorities, older workers) as well as from the traditional pools, and it is also a major rationale for seeking talent abroad. From the standpoint of individual employers facing hiring difficulties, one important way to fill vacancies is to increase employee retention —a job that is never vacant takes zero time to fill. Indeed, in analytical terms, the rate of employee turnover is as important a driver of vacancies in the workplace as is company growth, and empirically the data suggest that turnover makes a larger contribution to the vacancy rate than does growth. Many employers are indeed taking steps to reduce turnover by making existing jobs more attractive. If retention is insufficient, and/or if a company is growing, other sources of qualified workers must be developed and/or expanded ( Chapter 6 and Chapter 7). Different types of IT work call for different types of IT training. The duration of the necessary training (and/or development of experience) depends on the individual's prior background and the desired level of proficiency in the new area of work. For some types of IT work, an individual with substantial background in a related IT area can achieve

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Building a Workforce for the Information Economy basic proficiency in a matter of days or weeks (e.g., someone with training in Pascal can probably learn C well enough in a few weeks to do many things). For other types of IT work, even an individual with substantial background will require years of preparation (e.g., an individual with many years of experience in Pascal or C may take 6 months to a year or more to understand and program effectively in object-oriented languages such as C++ or Java, while an individual with an undergraduate degree in computer science will take several years to obtain a Ph.D. in computer science that enables him or her to do cutting-edge IT research). Formal education has a role to play in training for IT work, but it is by no means limited to baccalaureate work in computer science. It is certainly true that certain Category 1 work (e.g., IT development) increasingly requires substantial amounts of formal training—more so than has been true in the past. But the requirements of some such jobs may be met by individuals with substantial exposure to formal computer science education (whether through IT minors rather than majors, areas of concentration in IT, or even an array of several IT courses) that can be offered by colleges, universities, and community colleges. And various forms of continuing education (e.g., short courses) can provide some job opportunities—especially in areas for which business understanding and knowledge are more essential than detailed IT knowledge—to those without degrees in IT. Finally, for education and training to be most beneficial to workers, they must be integrated in appropriately situated real-work contexts. Cognitive theory and workplace experience both suggest that such integration is necessary for workers to use their learned skills most effectively. Employers, understanding this phenomenon, value job applicants who have a proven track record of such experience. For many of the job areas in which there is tightness today, training sufficient numbers of individuals on a time scale that responds to changes in the market remains a daunting task. Thus, while individual firms may be able to raise wages and compensation high enough to recruit workers doing comparable work from other firms, for the industry as a whole, the short-term elasticity of supply in the overall IT labor force is quite low. Short-term supply inelasticity in the overall IT labor force is exacerbated by the fact that the U.S. economy today is experiencing unemployment levels that are very low by all historical precedents. Because there is record low unemployment across the board, workers have many options —and thus workers in other fields are less likely to turn to IT than they might be if overall unemployment levels were higher. However, if and when overall unemployment rises significantly, a sector that continues to experience low unemployment (perhaps the IT sector) will become con-

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Building a Workforce for the Information Economy siderably more attractive to workers in other fields, thus making available a larger supply of potential willing new IT workers. Finally, the committee has heard many allegations of age discrimination in the IT industry (Chapter 4). It would be naïve to assert that no age discrimination exists. Some employers, managers, and hiring teams do operate from inaccurate assumptions and stereotypes about older people that may cause age discrimination to occur in individual cases. At the same time, workers who lose their jobs or are not hired for whatever reason (company mergers or acquisitions, downsizing, end of life of a product or service, obsolete skills, poor performance, and so on) may inaccurately attribute the cause of this action to age discrimination. Based on the available empirical data and a variety of anecdotal testimony, it appears that, on average, older IT workers have different experiences with displacement and possibly with post-displacement income than do younger workers. However, these data do not allow the committee to determine whether the differences indicate age discrimination on the part of employers, legal conduct by employers that may be perceived as discriminatory, personal choices made by individual employees, or the ramifications of a rapidly changing industry. To the extent that discriminatory treatment of older workers does exist, policymakers should address this issue—not because the elimination of all such discrimination would have a significant impact on tightness in the labor market, but rather because IT employers, and the nation as a whole, would, by underutilizing valuable human resources, be depriving the economy of a valuable source of talent. The following observations and findings elaborate the basic picture painted above. 8.1.1 On the Available Data The best available data sets are for the most part inadequate to provide a definitive description of workforce needs in information technology. Definitions of occupations—which are necessarily relatively stable over time—do not necessarily reflect the IT job titles of today because new types of jobs emerge quickly. In particular, occupational categories are generally too coarse and do not reflect important distinctions among IT jobs. Some data are not timely enough. Data that are 2 years old are unlikely to reflect accurately today's state of affairs in the rapidly changing IT sector or in IT-related jobs in other parts of the economy. Government data on IT workers in H-1B or other visa categories have been severely lacking, with only limited information available on

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Building a Workforce for the Information Economy country of origin, occupational category, degrees and experience, total compensation, age, nature of employer (industry, number of employees, revenues), change in employment, previous immigration status, adjustment to permanent status, and so on. Thus, policy recommendations from all parties—including this committee—are inevitably based on a mix of judgment and interpretation of whatever trends are visible in the existing data, however sketchy and incomplete those trends are. 8.1.2 On the Nature of Business in the IT Sector (Chapter 3) If past trends continue, the IT sector and the use of IT in IT-intensive industries will likely grow significantly in the long run. However, it is certain that such growth will be interrupted or at least curbed during certain periods (e.g., economic recessions) that no one can predict. Such periods are likely to relieve then-current tightness in the IT labor market (though they may discourage new entrants from going into IT work shortly thereafter). Because of the competitive premiums on speed within IT, employers want to be able to respond quickly to workforce needs that change as fast as new technology and/or applications emerge. The universe of IT employers is highly heterogeneous, involving firms or organizations ranging from finance, manufacturing, and government to IT firms that sell IT products, services, and applications. However, stereotypes of IT work as involving workaholics, dot-com millionaires, and very long work hours and pressure appear to drive many public perceptions of such work, even though they likely reflect only a small segment of all firms employing IT workers. The development side of the IT sector and of IT-intensive industries is particularly dependent on human talent, with the consequence that capital cannot easily be substituted for labor to increase productivity. Research continues on technology-based tools for improving the productivity of IT workers (and indeed, a number of such tools that have increased productivity are now in wide use—e.g., integrated development environments for software engineering) and on different types of organization and management for software engineering that improve productivity. However, due in part to growth in demand for IT products and services, it is unlikely that the use of tools or management techniques for increasing productivity will have a significant impact on tightness in the IT labor market in the current decade. For the development of business-specific or company-specific IT applications, knowledge specific to the business dimensions of the application is as necessary as IT-specific skills.

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Building a Workforce for the Information Economy 8.1.3 On the Assessment of Talent (Chapter 6) For an industry that is so dependent on human talent, reliable identification of the most qualified and productive individuals is critically important. However, many of the techniques used today to identify these individuals are poorly matched to determining an individual's qualifications for the relevant jobs. Systematic efforts to determine the duties, responsibilities, and requirements of a job are most successful when the job in question is relatively stable and well-defined. Because the IT industry is changing so rapidly, it is very difficult to apply these traditional methods. Even recognizing this rapid change, however, existing methods for job analysis are not sufficiently detailed to describe such work attributes as abstract analytical work, skill in the use of information technology, teamwork competencies, and interpersonal skills. Assessment tools almost always involve tradeoffs between speed/simplicity and thoroughness/accuracy. Some structured assessment methods (i.e., procedures used to evaluate a job applicant that are administered in a standardized and uniform manner, scored in a consistent manner, and validated against indicators of job success) have a solid empirical basis in identifying the most productive workers, enjoy a long and consistent record of validity and cost-effectiveness, and have proven to be fair and practical. On the other hand, structured assessments are often more expensive and time-consuming than unstructured methods, and they often depend on the quality of the information available about the content and requirements of the job. The unstructured assessment methods commonly used to select IT employees today (such as unstructured group interviews) can raise suspicion of discrimination on the basis of age, race, and gender. In general, job applicants tend to view certain structured assessment methods as more fair and less arbitrary than unstructured methods, even if the use of unstructured methods is legally defensible. 8.1.4 On Education and Training (Chapter 7) A factor currently limiting domestic production by 4-year colleges and community colleges of individuals with degrees in computer science is the availability of qualified faculty and facilities. Today, there is more student interest in such courses of study than can be accommodated. However, elimination of this limiting factor would increase production only if student interest in such careers matched the number that could be taught with newly available resources. Many of the most promising students—at various levels from high school to graduate student—are drawn away from academic study to

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Building a Workforce for the Information Economy pursue the lure of riches offered by the IT sector. While these individuals themselves may benefit if their ventures are successful, the potential long-term loss to the IT academic research and education enterprise is severe. Skills are needed, but formal training is not enough. Employers want to know that someone can actually complete a project applying the skills learned in a training course, and educational or training programs that incorporate real-world internships are more likely to lead to job placements. Thus, any retraining program intended to bring workers into the IT workforce, or to keep the skills of today's IT workers current and relevant to new technologies, must provide work experience as well as training to succeed. Professional societies have played an important role in supporting education and training through model curricula, accreditation programs for undergraduate computer science degree programs, and technical journals and conferences. 8.1.5 On Age Discrimination (Chapter 4) A perception among certain parts of the IT worker community is that discrimination against older workers is rampant. A complaint coming from older workers is that they believe they are more likely to be laid off than younger workers and then, once without a job, they will find it much harder to obtain new employment. Actions motivated by legitimate business reasons that also have disproportionate adverse effects on older workers do not necessarily constitute illegal age discrimination. Such business reasons may include the desire to reduce labor costs, to increase operating flexibility, or to seek workers with experience in new technologies. There is evidence that the experiences of older workers in IT may be different from those of younger workers. The available data indicate that: The IT workforce is younger than that in other occupations with workers of comparable educational attainment; Older IT workers (those 40 years and older) are more likely to lose their jobs than younger IT workers; Older IT workers are just as likely as younger IT workers to find new jobs; similarly, the length of time it takes for them to find new jobs is similar to that for younger IT workers. However, older IT workers may compromise more on new jobs than do younger workers. However, these differences—by themselves—do not allow the committee to determine whether they are the result of age discrimination on the part of employers, other employer behavior and conduct that, while legal, may create perceptions of age discrimination, personal choices by

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Building a Workforce for the Information Economy employees, or the ramifications of a rapidly changing industry. Thus, the committee cannot determine whether illegal age discrimination exists to a greater or lesser extent among employers of Category 1 IT workers as compared to employers of other professional occupations. Difficulties that older IT workers perceive in finding suitable employment exist largely apart from the availability of H-1B visas, as discussed in Chapter 4. Moreover, elimination of all potential age discrimination in the IT workforce would not likely have a significant impact on tightness in the IT workforce in the long term, although it could have a small, but important, one-time effect. 8.1.6 On the Use of Foreign Labor (Chapter 5) The IT sector and IT-intensive industries are fundamentally global, both with respect to markets and talent. Foreign-born workers can make an important contribution to the U.S. IT workforce. Furthermore, foreign entepreneurs, scientists, and engineers—like domestic ones—create jobs. Entepreneurs create businesses that hire others, while scientists and engineers—through the science and engineering that underlie new technologies—create jobs for other scientists and engineers working with those technologies. U.S. IT companies (and those engaged in the advanced use of information technology) can and do move work overseas for a variety of reasons. Sometimes they do so because labor costs are significantly lower, or because local markets require a local presence, or because they wish to tap a local talent pool with specialized expertise, or because a clean separation from the parent company can allow different “ cultural” environments to flourish. Given the assumption of continued growth in the use of IT, pressures will increase to locate development work abroad that would otherwise be performed in the United States. Such pressures are to some extent independent of the availability of foreign workers (either temporary or permanent) in the United States. Instead, these pressures are driven by a variety of other factors, including the significant cost advantages of relocating work to countries that have substantially lower wage structures than the United States, the need to tailor products to the requirements of foreign markets, and better access to foreign markets. This is not to deny the many difficulties and inefficiencies of coordinating offshore work with work performed in the United States, but many of these difficulties and inefficiencies are likely to be ameliorated by future generations of technologies to facilitate cooperative work. Growth in the IT industries abroad and the accompanying competition for talent from nations such as India may restrict the supply of

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Building a Workforce for the Information Economy foreign workers to the United States. Of course, because the trajectory of future demand for foreign IT workers here and abroad is unknown, as is that of production rates of qualified foreign IT workers, this outcome is by no means a certainty. It is the committee's judgment that the use of foreign workers will continue to be necessary for the immediate future, and that foreign workers will continue to make important contributions, but policy governing the use of foreign workers must consider not only the benefits of admitting foreign IT workers but also potential negative effects on the domestic workforce and take steps to ameliorate those negative effects. 8.1.7 On the Use of Temporary Foreign Nonimmigrant Labor (Chapter 5) From the employer's perspective, the critical element of the H-1B program is that it enables employers to engage nonimmigrant foreign labor in useful work on a time scale of several weeks to a few months rather than years, a fact that makes obtaining foreign labor through the H-1B program convenient, given the time scales of change in information technology. The committee estimates that temporary nonimmigrant workers (mostly with H-1B visas) constitute about 10 percent of the Category 1 IT workforce, though this figure likely represents an upper bound. While H-1B visa holders are far from the dominant influence on the IT workforce, their number is large enough that without these workers there would likely be a slowdown in the rate of growth in the IT sector. Economic theory implies that an increase in the supply of IT workers, including temporary nonimmigrant workers, will cause the corresponding IT wage rates to be lower than they otherwise would have been. Theory alone does not imply any particular numerical magnitude of this effect. It is the committee's judgment that the current size of the H-1B workforce relative to the overall Category 1 IT workforce is large enough to exert a nonnegligible moderating force that keeps wages from rising as fast as might be expected in a tight labor market. 8.1.8 On Workforce Needs in Biotechnology as a Point of Contrast and Comparison Product innovation and development in biotechnology are based on advances in the quality and amount of scientific information. Consequently, the paths to biotechnology careers—including those for technicians —require substantial formal training in a number of highly specialized scientific disciplines, including molecular and cell biology. This

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Building a Workforce for the Information Economy visa program because it provides a route through which foreign labor can be legally hired in the United States in a timely manner. Whereas it can take 5 to 8 years to obtain a green card for an individual worker, an H-1B visa can usually be obtained in a matter of months. Much of the controversy over the H-1B program is rooted in the belief that the use of H-1B workers places U.S. workers at a disadvantage, because of H-1B workers' lack of mobility and their status as “temporary” in the labor force. Based on these problems with the program, the committee makes the following recommendations: H-1B visas should be more portable than they are today, thus allowing H-1B workers to change jobs more easily.15 Today, H-1B workers cannot change jobs unless and until a new employer files an H-1B petition accompanied by a new labor certification application. In addition, if an H-1B worker who wishes to obtain permanent residency changes employers, is promoted such that his or her job duties change, or relocates with the same employer, he or she may have to start the green-card process all over again, may lose his or her original priority date,16 and may not complete the process prior to the expiration of his or her H-1B status. In short, many H-1B workers are bound to their employers for immigration-related reasons. The green-card process should be reformed and significantly streamlined, thus reducing the time needed to obtain green cards. The current green-card process for certain categories of employment-based visas is based on legislation dating from 1952 and consists of two components: a labor certification administered by DOL, and an INS review of the foreign worker's proposed employment and credentials, as well as his or her personal history, culminating in issuance of a green card. Both components are in need of reform. One problem with the labor certification process is that it requires a labor market test for certain categories of employment-based immigration that does not reflect inno- 15   Note that if H-1B visas are allowed to be more portable, a set of circumstances is eliminated in which employers can take advantage of an employee's dependence on remaining in the same job for immigration-related issues; thus, the labor market should become more competitive. In addition, many employers would benefit since it would allow them to reassign employees to new positions more easily; if DOL also developed a more flexible approach to employment changes during labor certification, as recommended below, then H-1B portability would also allow employers to reassign prospective permanent residents to new positions without interfering with their green-card processing. 16   Recall that the “priority date” is the date that establishes an individual's place in the queue for permanent residency. The priority date is highly relevant because of the per-country numerical yearly quotas for permanent residency.

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Building a Workforce for the Information Economy vations in recruitment practices, such as recruiting at professional meetings or advertising positions on the Internet. More generally, it is widely acknowledged that the current process is delay-ridden, cumbersome, and overly complex. As a result, a labor certification that takes from 6 months to 4 years to obtain may be entirely overtaken by changes in the labor market by the time the certification is granted. Another problem that delays issuance of green cards is that the INS allocates immigrant visas based, in part, on country of origin, resulting in per-country limits on the number of green cards that can be issued each year. Because the limits are reached in several countries where there is high demand for visas (such as China and India), substantial backlogs occur, making the green-card process particularly slow for nationals of those countries. Recognizing these problems with the current green-card process, the committee recommends that it be reformed according to the following policy principles: The green-card process must be streamlined in a way that significantly reduces labor certification processing and limits total processing times to a time scale of a year or so, rather than the current total of 5 to 8 years. In principle, this is an implementation issue, but policy decisions are likely to be necessary to achieve such changes in implementation. The Department of Labor should develop rules enabling labor certification applicants to change job duties as a result of promotion, change their place of employment, or change employers more easily without invalidating their green-card processing, and Congress should consider changing the “per-country” limits to reflect current immigration patterns. More generally, where possible, steps in the green-card process should be conducted in parallel rather than serially. For example, as noted in Chapter 5, the INS portion of the green-card process involves two distinct steps that currently must be conducted sequentially. INS should consider conducting these steps simultaneously. Any streamlining changes to the green-card process should exist as a matter of regulation or statute, and be administered uniformly throughout the nation. A program based on regulatory or statutory authority is subject to public comment and has a degree of legitimacy not enjoyed by programs based on directives. It is therefore more likely to be administered consistently throughout the nation. Similarly, employers need clear rules and requirements that allow them to know when they are in compliance and what applications will be approved. Labor certification requirements should reflect innovations (such as the use of the Internet) in recruitment and should also reflect that recruiting practices may vary by industry and occupation (professional

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Building a Workforce for the Information Economy employees in some occupations, for example, are recruited at professional meetings). The DOL has acknowledged a need to reform the labor certification process.17 In addition, DOL has already undertaken some efforts at reform, e.g., its “reduction in recruitment” (RIR) process. However, while these reforms are a step in the right direction, they do not go “far enough” and likely violate one or more of the committee's articulated policy principles. For example, the RIR process is intended to take into account recruitment practices normal to industry today, and thus to reduce the time needed to process labor certifications. However, the basis for RIR is a DOL administrative letter, which has not been uniformly implemented throughout the nation; different regions vary in both procedures and processing times—from 3 months to 2 years. In addition, while the committee recognizes that an important controversy regarding the H-1B visa program is its size, it has found no analytical basis on which to set the “proper” level of H-1B visas, and thus decisions to reduce or increase the cap on H-1B visas are fundamentally political. Furthermore, since the H-1B program is used to supply skilled labor in many fields other than IT, an IT-centric analysis is clearly inadequate. At the same time, the current situation, in which the H-1B cap is reached early in the fiscal year, resulting in INS freezing H-1B approvals until the following October and using H-1B numbers from the next year's allotment to satisfy pent-up demand from the prior year, is unacceptable. In order to alleviate this problem, it may be worth considering approaches that either distribute allocation of the visas throughout the year or that move away from the notion of a fixed numerical cap.18 Finally, the committee urges policymakers to look ahead several years and consider the effect of having increased the numbers of H-1B visas 17   For example, the DOL recently published in the Federal Register general principles that will “guide the development of proposed regulations to effectuate the redesign [of the labor certification process]” in ways that will “streamline the process, save resources, improve the effectiveness of the program, and better serve the Department of Labor's customers.” (See Federal Register (20 CFR Part 656, RIN 1205-AB), August 25, 2000, p. 51777.) 18   Some of the approaches discussed with the committee include auctions of H-1B visa-sponsoring privileges to employers (perhaps periodically to distribute the visas throughout the year); a floating cap that varies with some statistical indicator such as occupational unemployment rates or vacancy rates, with floors and/or ceilings on the cap; and pre-qualification of an employer to use H-1B workers up to some percentage of its workforce (perhaps depending on size), based on attestations and certifications about that employer's hiring and recruitment practices. Because of a lack of time and necessary expertise, the committee did not conduct an analysis of these alternatives, and thus is explicitly silent on expressing a preference among these approaches. These approaches are mentioned simply to demonstrate that a fixed numerical cap is not the only way to approach the issue.

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Building a Workforce for the Information Economy without having significantly streamlined the labor certification process or having reevaluated the numerical limits on immigrant visas available in the U.S. current employment-based immigration program (i.e., the number of permanent visas available to foreign workers based on their job skills and country of origin). The committee believes that it would be a mistake to adopt “stopgap” measures related to this group of nonimmigrant workers and miss the opportunity for a considered debate on the nation's policies regarding employment-based immigrants, given the fact that our economy is rapidly becoming more global. 19 Some of the issues for the national debate include the nature of the appropriate criteria for different classes of immigration (e.g., employment-related skills, family ties, political status), the allocation of visas of different types among occupations and nationality, the number of visas available in each category, and the appropriate balance of indigenous and foreign labor in the United States. 8.3.5 For the Federal Government as a Major User of IT The government depends heavily on IT systems to conduct business and, more importantly, to provide for the security and welfare of the nation. In many cases, these operations are handled by contractors who develop and operate IT systems for the government. But the government employs many IT professionals directly. One reason is that government systems may contain sensitive data to which contractor access would be inappropriate. A second important reason is that government needs considerable IT expertise to exercise appropriate management oversight for its many IT-related contracts. As described in Chapter 3, the federal government faces a number of specific challenges when seeking to recruit and retain IT workers, including an inability to match private sector compensation, an impending retirement bulge, and a statutory inability to tap foreign workers for certain sensitive positions. In addition to some of the actions (mentioned above) that all large employers of IT workers can undertake, the federal government should take the following steps. 19   As noted above and in Chapter 5, H-1B workers seeking green cards may be subject to years of processing delays due to visa backlogs (either because the quota for employment-based immigration is inadequate to handle the growing number of cases or the per-country limitations are inadequate to avoid backlogs for the large number of H-1B workers born in countries such as China and India). Unless Congress also addresses these backlog issues, many of these green-card applicants may not finish their processing prior to the expiration of their H-1B status, forcing them to terminate employment, leave the United States, and wait abroad until an immigrant visa becomes available.

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Building a Workforce for the Information Economy Emphasize the fulfillment that comes from working in responsible positions serving the nation. In the past, IT and other technical workers have often had great responsibility for implementing and managing complex and important systems. In many cases, government employees have had far more responsibility than they would normally have in private industry. As the amount of contracting out increases, government workers will assume the responsibility for managing large teams of contractors. This can be very fulfilling work. At the same time, IT operations that must remain within the government because of the sensitive nature of their processing can also provide technically challenging work that is of national significance. A deliberate effort to publicize accomplishments of IT professionals in government would be consistent with such an emphasis. For example, well-publicized award ceremonies, write-ups in trade journals, and some high-level attention to successes working in challenging areas (such as those posed by large federal systems) could well be part of such an effort. Be more flexible in remuneration and recruiting methods. The government can take several steps to achieve greater flexibility in remuneration and recruiting: Make government compensation systems more competitive with the private sector. The present system cannot react rapidly enough to the rapidly changing IT workplace. Temporary relief is needed to the Civil Service Title 5 rules for as long as the IT labor market remains tight and dynamic. Congress has sometimes provided waivers for demonstration projects, for example, to retain key technical people in Department of Defense (DOD) laboratories. Such programs can provide more flexibility, such as signing bonuses, entry at higher than normal civil service positions, substantial bonuses to outstanding workers, and rapid promotion.20 Update the occupational structure of IT work done in federal service. The current structure does not match the occupations recognized in the IT industry today. Advances in technology mean that IT jobs change rapidly. Broadening the occupational structure of IT work will allow 20   A first step is to understand the differences in compensation systematically. The federal CIO Council's IT Workforce Committee has partnered with the National Academy of Public Administration (NAPA) and the Office of Personnel Management (OPM) to sponsor a study to document the compensation differences between the federal government and private sector.

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Building a Workforce for the Information Economy greater flexibility for managers to react to changes in the nature of the work. Eliminate the restrictions on the remuneration of retired federal employees. Retired federal workers (military and civilian) are an important potential source of IT skills and experience. However, laws on dual compensation prohibit civilian retirees from getting the full combined value of their salary and annuity upon reemployment in the federal service. Recent legislation removed this restriction for retired military personnel. Rehired civilian annuitants, however, only get the difference between their retirement pay and what would have been their salary. This restriction discourages civilian retirees, who therefore take jobs in the private sector. Emphasize the special advantages of working in government as an employer for those from nontraditional labor pools: women, minorities, persons with disabilities, and unemployed and underemployed mid-career technical professionals. These advantages include the defined hours, the family-friendly work environment, the stability of employment, and the health and pension benefits. Make greater use of intern programs, possibly augmenting them with stipends for course work and term papers that are directly applicable to government problems. Internships are popular in the private sector, and DOD, for example, has had a fairly successful program in the past. Improve working conditions. The government should make much greater use of telecommuting and other practices to improve IT working conditions. Telecommuting, flex time, and flex place are standard practice at many companies. Some of these programs are implemented ad hoc in the federal government, but more systemic utilization of new business work models could motivate workers to join or remain in government service. Make more resources available for training. The federal government should raise its investment in IT training to the best levels in the private sector in order to maintain the skill levels of its employees and to help with staff retention. For many years the military has provided substantial education and training to its employees. This has been an important factor in retention. Some of these same principles (e.g., tuition reimbursement) can be applied in federal civil agencies.

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Building a Workforce for the Information Economy Use contractors more effectively. The government should provide contractors with more flexibility in staffing projects. In some cases contracting officers have set unrealistically high educational and experience requirements and compensation rates that are too low. They have also set severe restrictions on the extent to which training can be billed to government contracts. Such measures exacerbate the tightness in the IT labor market that the government feels. For example, requiring a 4-year degree eliminates many highly qualified people from working on government contracts. Loosening these restrictions will increase the pool of qualified workers available to work on government contracts and help companies to maintain the skills of their employees.21 The government should continue to innovate in the area of contracting as it has over the past few years and should continue to make greater use of off-the-shelf hardware and software, rather than more expensive and inflexible custom programming. Agencies should take advantage of contracting vehicles that have become much more flexible, allowing government managers to reward good contractor performance and not make awards to contractors with bad records, even though their bid price may be low. Local managers should be given more authority but should be held accountable for the systems that their contractor teams implement. This kind of flexibility will be even more important as the demands for e-government increase in order to be more responsive to citizen needs. Support a next generation of (federal) IT workers. Analogous to U.S. government programs that support the education of physicians in return for a number of years of service to medically underserved areas, the government should consider establishing a federal “cyber service” program. For many talented high school students the high cost of college education is a barrier to continued education. An IT scholarship and intern program would provide the financial means for these students to gain a college-level education in IT. The government would pay for a student's undergraduate and/or graduate IT education in return for the student's commitment to government service. Another aspect of promoting federal service in IT relates to the cultivation of future federal leaders in IT, giving them greater responsibility early in their careers and regular job rotation. For example, the CIO 21   On May 2, 2000, the House passed a bill (HR 3582) that calls on federal agencies to ease educational requirements for IT workers on government contracts.

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Building a Workforce for the Information Economy Council has recommended that the Office of Personnel Management prepare a program to develop better managers and supervisors for new IT workers who may have many nontraditional work preferences. Such measures are a helpful step that will nurture a next generation of IT workers. 8.3.6 For Joint Action While federal and state governments, companies, and academia can do more individually to relieve the tightness in the IT labor market, cooperation among these groups is also necessary on a national and regional basis. These constituencies need leadership and motivation to work together, and this can best be provided by the federal and state governments. Examples of actions that can be taken are described below. Promote awareness of and interest in IT careers. Stimulating awareness of and interest in IT careers should engage both the public and private sectors. For example, the Department of Commerce noted in mid-1999 the need for greater awareness of opportunities, reporting on an apparent need to improve the image of IT jobs to attract young people22 and launching an initiative to promote better image-making through the mass and entertainment media as well as renewing emphasis on K-12 education as the time and place to stimulate interest in IT careers. Stimulating youth interest in IT careers has, of course, long been the province of relevant professional societies, and concern about labor market tightness has further stimulated such efforts. The Association for Computing Machinery and the Computer Society of the Institute of Electrical and Electronics Engineers, which represent both Category 1 and Category 2 IT workers, as well as other organizations more focused on Category 2 IT workers, have long been involved in planning for education, mentoring, and youth outreach, including programs for disadvantaged youth as well as youth generally. Professional societies aggregate information about IT careers, education, and training at the national (or international) level and publish it; many outreach activities are developed and undertaken at local levels and in communities. These efforts may provide a useful platform or social network on which to build. 22   Meares, Carol Ann, and John F. Sargent, Jr. 1999. The Digital Work Force: Building Infotech Skills at the Speed of Innovation. Washington, D.C.: U.S. Department of Commerce, June.

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Building a Workforce for the Information Economy Expand opportunities for groups underrepresented in IT. As noted in Chapter 6, the full utilization of all sources of labor is necessary to cope with a tight labor market. Considerations of fairness, equity, and civic engagement in a democratic society also imply the same course of action. The discussion of structured assessment in Chapter 6 suggests that expanding the pool from which qualified workers can be identified is not inconsistent with meritocratic hiring principles. However, to the extent that groups underrepresented in IT are underrepresented because they have not been attracted to IT work and/or had the appropriate educational and training experiences, government, employers, and educational institutions all have particular roles to play. The following list of actions to be taken by some or all of these parties is derived largely from a paper originally intended to address the issues of women in IT careers;23 however, the list is applicable with minimal modification to members of all underrepresented groups. Collect better data on the status of underrepresented groups in CS and in IT. Little is known about what encourages youth and adults to pursue IT, what helps to retain them in the field, and what enables them to succeed. Research also needs to be sensitive to the differences between demographic groups (Native Americans may have needs and issues very different from those of African Americans) as well as to the differences within groups (Hispanic Americans have many different countries of origin, as well as backgrounds in different social classes, and also have many individual differences). Thus, research should address how the patterns of access, experience, and attitudes differ across various groups underrepresented in computing fields. Provide role models for all age levels so members of under-represented groups can imagine themselves as IT professionals. Members of underrepresented groups have entered IT careers in the past despite having few or no role models, but pioneers can pay a high price for their success. To make a substantial increase in the numbers of people from underrepresented groups who select IT careers, it is important to have visible role models who by their presence convey the message that IT is open to all. Provide mentoring for all age levels so that members of under-represented groups can receive the support they need to scale the professional ladder. Mentors can be from the same demographic group or from 23   Gurer, Denise, 3Com Corporation, Association for Computing Machinery Committee on Women in Computing (ACM-W), white paper provided to the Committee on Workforce Needs in Information Technology, 1999.

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Building a Workforce for the Information Economy a different group; they can be teachers, supervisors, more experienced workers, or others; they can be volunteers or people who mentor as part of their job. Research shows that personal relationships and mentoring are important components of career success. Recruit additional members of underrepresented groups into CS faculty positions at universities and key IT positions in industry. This recommendation speaks to both role modeling and mentoring at the level of higher education, but it also does more. Diverse faculty can help to shape the field of CS in important ways, and help to educate a new and more diverse generation of IT professionals. Encourage industry to produce products aimed at the interests of underrepresented groups. IT products themselves can by their nature send a message to users about whether or not IT includes them and serves their interest. Even computer games, if sensitively designed, could help to attract to IT careers those who might not otherwise have thought to pursue them. Enhance the public image of computer scientists and engineers. The belief that, for example, one must be a “nerd” to be successful in IT can be a significant barrier. Also, the false perception of IT careers as requiring an 80-hour work week may be particularly discouraging to some groups. IT employers and professional societies would be particularly appropriate stakeholders to pursue an effort such as this. Encourage programs that provide a friendly atmosphere for members of underrepresented groups in academe and industry. Reports of harassment, of “chilly classrooms,” and of cultural mismatches for under-represented groups are frequent in some industrial and educational settings. These problems are not unique to IT, but a tight labor market and declining participation by female students make these issues urgent to address. Also potentially helpful could be an examination of the degree of “social relevance ” of educational curricula, as this might be a factor in attracting and retaining underrepresented groups. Provide programs that allow members of underrepresented groups to enter the IT field through alternative programs such as reentry programs. A member of an underrepresented group who chose an alternative career path because he or she was not encouraged to pursue IT should have access to alternative points of entry. Reentry programs, mid-career programs, and the like can help to create alternative paths to a successful career in IT.

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