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Sun 27 Sep 2009 04:00 AM

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Skills shortage

Imthishan Giado speaks to the region's top CIOs to find out how they ensure that the skills of their employees are up to scratch - and what to do when they are found wanting.

Skills shortage
AL MULLA: I definitely think there is a skills shortage today of IT employees – there’s no question about it.
Skills shortage
JAVEED: I always try to tell my staff that that their jobs will be laid off when a smarter kid comes up though the ranks.
Skills shortage
SADALLAH: In many cases, upgraded people will start to look for higher positions according to the skills they have learned.

Imthishan Giado speaks to the region's top CIOs to find out how they ensure that the skills of their employees are up to scratch - and what to do when they are found wanting.

Thus far, 2009 has proved to be a year of reflection for regional enterprises. Where once companies were driven by a nearly endless supply of projects and budgets that were rubberstamp formalities towards acquiring the hottest technology, today firms see a different landscape.

While there are still projects happening, many CIOs are taking the opportunity of the slower pace of development to re-examine the staff in their departments to find out if they are keeping up with market requirements, need to be retrained, or in the worst cases, need to be laid off. For some, it's the first real chance they've had to do so in years, outside the regular cycle of appraisals.

What many find, however, is that their departments lack the skills they need to move their organisations forward - and as always, fresh talent, both experienced and otherwise is thin on the ground. Ahmed Al Mulla,  vice president of IT at Dubai Aluminium (Dubal), confirms the presence of a regional skills deficit.

"I definitely think there is a skills shortage today - there's no question about it. A lot of people talk about the financial crisis - yes, there are some vendor-type resources available in the market, but it's not the type that you are looking for. Even if you get something because of the market situation, it will not last for a long time, because the market's going to come back," he warns.

The absence of a skilled professionals, it turns out, is doubly painful for IT managers. On one hand, it's extremely hard to find someone with the exact right skils, so many are forced to build them in-house. When they do this successfully, most of these individuals then look for high-paying vendor jobs, which are only too happy to headhunt employees from customers.

Ghassan Sadallah, head of academic computing at the University of Sharjah, confirms that training employees is constantly an inescapable reality, but there are ways to prevent them becoming "too skilled" - and then likely to look for other employment.

"It is really a very important decision to upgrade their people according to their requirements. I think it will cost less, people will be more confident and it is easy to manipulate their skills according to the requirements. Unfortunately in many cases, these upgraded people will start to look for higher positions according to their skills. The trick is to manipulate their skills in an indirect way to be incomplete. You try to keep them here. You give them knowledge or upgrades to their skills but in a way that fits your own needs only," he reveals.

But for some vertical industries, there are no options available at all to poach from the market or other vendors. In these cases, CIOs must build teams in-house using existing resources. Muhammad Javeed, director of IT Services at Qatar University, relates his experiences with building such a division.

"Higher education is a little bit different than the corporate or other SME businesses. The skillsets in higher education require a totally different approach, different certifications and so on. We totally build up our own team - I have got a team of more than 70 people across the university. There is a huge lack of expertise but we've been trying to build it up. I built up this department from scratch to 75 people over the last four years. I inherited about five to ten people but they were all useless," he recalls.

The pros and cons of building an IT department internally versus "buying-in" skills externally are obvious. On one hand, you can build a trusted IT team with exactly the skills you need - but it will take several years and there's no guarantee that these individuals will stay on afterwards. On the other hand, splashing out budget on the best staff on the market ensures that your firm has the latest skills and plenty of experience out of the gate - but risks alienating older staffers and sparking an exodus, while still not guaranteeing that your staff will stay to continue building systems.

So if there really is a skills shortage, the million dollar question then becomes - what skills are really in demand?

Al Mulla has some ideas on the subject: "The most demanded skills are architectural - people who know the ins and outs of IT, technology and applications. The other type is someone who understands the mapping business processes with IT. So really, you're talking about one kind of application development. The third type is good project management skills."

Who to hire?

Ahmed Al Mulla, vice president of IT at Dubai Aluminium, describes his hiring practices: "We don't have a specific ratio, but on average we hire about four to five fresh graduates every year. We also have a nationalisation plan so we hire nationals mostly.

Some of them leave us after a while. In terms of experience, it depends on project. I would say probably, we hire about four to five experienced people every year. You might have additional requirements, but you also have one or two people leaving you for whatever reason, retirement or so on. The ratio is about 1:1 basically."

"Security is the topmost in demand as of today. Virtualisation is another skillset which is going to pick up. It's not there at all in this part of the region yet because we are very ignorant due to the money available. People are not thinking of saving electricity - we cool our entire houses with air conditioning even if there is only one person in the room. Another is business process management and intelligence - a lot of people are not paying attention to it but it will be the driving force in this region soon," Javeed speculates.

Rather than just hiring in more technical staff, it's becoming clear that enterprises are looking for individuals who can understand the overall role IT plays in fulfilling organisational needs. But if that's the case, which skills are becoming more redundant? Javeed says those who are building applications in-house are living on borrowed time.

"The people who have been just focusing on keeping the skillsets of in-house development are becoming redundant because this part of world is moving towards standards-based off-the-shelf applications. They have to focus on more web-based technologies and programming. People used to be very strong in Oracle development, that's becoming redundant because there's not much inhouse development going on."

Even vendors face many of these pressures. Wael El Nadi, technology solutions manager, Turkey, Middle East and North West Africa at EMC says that while certain skills may rise and fall in favour, they will always have some requirement. However, they become commodity skills, as opposed to highly-prized and paid ones.

"For example, an ERP consultant is always there - you can find plenty of them in India or Egypt. These guys come with the projects so they are  not permanent staff for an IT division. You'll find that Oracle is much easier to find and does not require as high a calibre as needed five years back. I don't recommend that people spend their time learning Oracle or Cisco because these things are becoming much easier, and with technology advancements, one guy can do the job of three. Plenty of them are in the market anyway, with cheaper prices," he declares.

With budgets on the decline and IT under pressure to cut costs, many turn to outsourcing to save on the salary and entitlement costs of large numbers of employees.

Al Mulla says this is a viable strategy in some cases, but cautions that enterprises should not believe that everything can be outsourced: "Personally, I think outsourcing should save money but that should not be a primary purpose - the purpose of outsourcing should be that you want your IT people who are in your company to be business-focused, not IT-focused. A lot of companies outsource because they want to do less for more. If you outsource, it doesn't cost you less.

"It depends on your size. You can outsource some of the functions and certainly, some of the basic things should be outsourced like first-line support, call centres and so on. But you can't outsource application design. Who can define what you need? I think it would be a big mistake to outsource these kind of things, except if you are in an industry where it's 100% standardised, which is non-existent," he continues.

EMC's El Nadi says there are alternatives available through vendors which do not require surrendering IT to another organisation: "They can do what we call staff augmentation, complementing their staff by using vendor engineers or whatever. This is very common, particularly in Saudi Arabia where the vendors come with their engineers. Of course this has a disadvantage because as a customer you are always relying on the vendor supply of resources and of technology."

The big chop

What does an IT manager do if an employee obstinately refuses to adapt to modern technologies and learn new skills? It's always hard to make that final decision, and CIOs do everything they can to avoid losing an employee.

"If somebody is not enthusiastic to improve his skills and he's not worried about his career, he is responsible for it. I try to make sure that staff understand that it is in their best interest to improve their skills in order to be competitive in the market. Our threat is from the new generation, not from the seniors. I always try to tell them that their jobs will be laid off when a smarter kid comes up. There are people who do that - they're ignorant and end up being laid off," says Muhammad Javeed, director of IT services at Qatar University.

Dubai Aluminium's vice president of IT, Ahmed Al Mulla takes the line that if every other option is exhausted, sometimes there is only one left.

"If they are not willing to change and really are so negative, then you have no choice but redundancy. You can't put the business at risk because of somebody. Generally you find, however, that IT guys are not bad at changing. If an employee is so good at a technical aspect like security, I think it's better to keep him at that job.  At the end, what do you want from an employee? You want to get the best productivity out of that person. If you put him into other roles and he is struggling, we are being unfair to the employee," he admits.

Looking at the other side of the equation, how do employees prove that they have the right skills in the first place? For many, it comes down to the various certifications they have obtained. While these sound good on paper as a means of testing an applicant's ability, the reality is that most CIOs consider them just that - pieces of paper.

"Believe it or not, only 10% of the value is taken on these certificates. I depend around 90% on the interview. Unfortunately, these certificates are not always because they have the knowledge - which is different from memorising questions in a book. In business, I don't really depend on memory. I depend on situations and how to handle it. With most of the certificates, if you memorise the questions and take the test, you will get it. But come sit and I give you a situation and you are under pressure. Here we can see the skill of the person whether he can pass or even remember what he studied," declares Sadallah.

"I can see in some CVs that people are having certificates that Bill Gates could not get if he tried! They have ones from each and every technology. It can't happen if he is say, just 25 years old, it's too much," he adds.

EMC's El Nadi has a similar view: "If I am interviewing someone and he tells me he has all these certifications, I put it aside and ask what he really knows how to do. Certification can complement hands-on experience, but it cannot replace it. I would prefer that the certification comes after the job, not before it."

Quite apart from technical skills, one area that often gets ignored by IT managers looking to develop their staff is that of soft skills - giving them the communication skills to move up through management and face other business people. Dubal's Al Mulla explains that confidence does not come easily to IT staffers.

"Technical guys are quite bad at communication. Imagine if someone sends you an e-mail with a lot of three letter acronyms. You don't know what the e-mail means. As an end-user, a lot of technical guys do that. You really need to make sure that when they communicate, they communicate from an end-user perspective. To do that, it's not really a question of just telling them. It's a question of them attending the course, sitting in the shoes of that end-user, thinking in that way and trying to see how things are." he says.

"Some technical people don't like management, one aspect of which is communication. You give it to them and they fail. Sometimes you have good guys who you want to promote but the only option within the pay system is to make him a manager. They have then done harm to him and his career, and also to the organisation," continues Al Mulla.

El Nadi says that it's better to avoid this situation in the first place, by making sure incoming hires have a modicum of personal ability: "I don't recruit someone who has the best technical knowledge but no soft skills. I don't care actually, because it creates problems in the long run. We are a customer facing organisation so if I have an engineer, he will still meet with customers. He might meet a manager, so if he doesn't have the right soft skills, we are really in trouble."

Regardless of who you hire, it's highly unlikely that that individual will be able to walk him and perform optimally from day one. Al Mulla knows this scenario only all too well.

"There are two types of IT guy. Either you hire a fresh graduate or an experienced person. With a fresh graduate, I can tell you that the first two years, he is an overhead until he starts learning and you get juice out of him. If he is an experienced person, you need a minimum of six months," he explains. "Retention is key - you hire somebody for two years, you spend money on him. If he then leaves you, you've lost a lot. To get somebody to the same stage, you need to wait two more years."

"Companies need to find some cost cutting methods that does not involve redundancies as much as they can. You will need this labour after one year and they will not come, and it will be very difficult to rebuild what you have done in the last few years. Think really of options before going into redundancies, because the recession will not continue forever, it will finish. Then your intellectual property will increase the real fortune and assets you have to face the next wave of growth," concludes el Nadi.

The ideal employee

Ghassan Sadallah, head of academic computing at the university of Sharjah explains what kind of employees he looks to hire for his IT team.

"These people should be able to upgrade and change their mentality according to the requirements. In IT, technology can be changed within a week. If he is confident with using Windows and we might need to switch to other operating systems, he should be able to deal with it. For example, if we are using Java to move to .NET, it shouldn't be a problem. It's also nice to have a general knowledge. Yes, you might be a developer, but it's nice if you know about security, networking, maybe some simple information about even the rendering of the applications. This is important because it will give a final touch to whatever he is doing.

"They should be aware of where we are going. For example, virtualisation, infrastructure skills are very important these days. Storage technologies is very important and of course the security that surrounds this area.  Regardless of his specialty, he should have very good information about the web-related technologies in general.

"Finally, I'm keen to get somebody who's willing to at least stay with us for at least three or four years. Somebody should not always be looking for a higher salary, because stability is very important for us," he ends.

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suzy Gillie 11 years ago

When you use the phrase "labor shortage" or "skills shortage" you're speaking in a sentence fragment. What you actually mean to say is: "There is a labor shortage at the salary level I'm willing to pay." That statement is the correct phrase; the complete sentence and the intellectually honest statement. Employers speak about shortages as though they represent some absolute, readily identifiable lack of desirable services. Price is rarely accorded its proper importance in their discussion. If you start raising wages and improving working conditions, and continue doing so, you'll solve your shortage and will have people lining up around the block to work for you even if you need to have huge piles of steaming manure hand-scooped on a blazing summer afternoon. Re: Shortage caused by employees retiring out of the workforce: With the majority of retirement accounts down about 50% or more, most people entering retirement age are working well into their sunset years. So, you won’t be getting a worker shortage anytime soon due to retirees exiting the workforce. Okay, fine. Some specialized jobs require training and/or certification, again, the solution is higher wages and improved benefits. People will self-fund their re-education so that they can enter the industry in a work-ready state. The attractive wages, working conditions and career prospects of technology during the 1980’s and 1990’s was a prime example of people’s willingness to self-fund their own career re-education. There is never enough of any good or service to satisfy all wants or desires. A buyer, or employer, must give up something to get something. They must pay the market price and forego whatever else he could have for the same price. The forces of supply and demand determine these prices -- and the price of a skilled workman is no exception. The buyer can take it or leave it. However, those who choose to leave it (because of lack of funds or personal preference) must not cry shortage. The good is available at the market price. All goods and services are scarce, but scarcity and shortages are by no means synonymous. Scarcity is a regrettable and unavoidable fact. Shortages are purely a function of price. The only way in which a shortage has existed, or ever will exist, is in cases where the "going price" has been held below the market-clearing price.

B Madani 11 years ago

I think the lady from New Yorks response is essentially true. If you pay peanuts, you get monkeys!

Pauline 11 years ago

I could'nt have said it better than the way suzy Gillie has. You spoke the words right out of my mouth. Pay the price and you get the workers you're looking for.

m adnan 10 years ago

I agree to everyone's comments here. "The forces of supply and demand determine these prices -- and the price of a skilled workman is no exception. The buyer can take it or leave it. However, those who choose to leave it (because of lack of funds or personal preference) must not cry shortage. "(post by Suzie Gillies) - also want to add to this, that employers need to consider their work force to be an asset for the company...and not provide them with limited training and education so they can not find better jobs (as suggested by the article) , instead if an employee was well tranied by the company and Well PAID!! would not find the reason to leave...clearly there is a lack of human resource management and policies if companies are finding that once they train their staff they leave for better jobs....if companies had a proper growth plan both for the company and the employees future and both these growth plans were in sync ...then there should be no reason why staff leave after training....