6 Steps to Close the IT Skill Gap

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Guest Post by Rob Boudrow and Bob Audet

Recent research reveals that 72% of executives place above average importance on talent management, yet only 44% of their companies have done an above average job in building the foundational capabilities to manage and improve talent.  During a recent project with a health care CIO, we observed this gap in practice and want to share some of our observations.

Early-on, we saw four major issues:

  1. higher reliance on outsourced resources for roles that could be filled by more junior internal resources
  2. misalignment of resources and responsibilities
  3. limited leadership and succession pipeline, and
  4. disconnects between the training and competencies required to support the operating model and overarching IT strategy.

While these skill and resource problems may not be the only cause, on-budget and on-time delivery were 15% and 37% lower than industry average, respectively.

These problems are not unique to this company and seem to be cropping up with more frequency elsewhere. On average, IT organizations only spend 0.3% of total on developing talent, yet the annual estimated costs associated with attrition and rehiring are 2.5 times greater than skill development spend.

Closing the IT talent gap-the divide between the skills IT pros grew up with and the skills they need to add value tomorrow-won’t get any easier. But there are actionable steps your company can take now to position your organization for success:

1. Get HR and training department support

CIOs need to partner with HR and training organizations to define a short-, mid-, and long-term talent management strategy to more effectively manage and uplift internal skills. One of these organizations must take strategic accountability for closing the talent gap.

2. Ensure common understanding of the IT operating model

You can’t hire and train people efficiently unless everyone-IT line management, HR and training-are on the same page about the IT operating model. Take the time to explain the operating model in detail. Use visualization techniques to illustrate relationships and dependencies. Confirm that everyone understands and appreciates the tight linkage between the operating model, roles and responsibilities, and job family descriptions.

3. Regularly reassess your sourcing strategy

Re-evaluate your IT sourcing strategy on a regular basis to ensure the appropriate technology functions are outsourced, and analyze how this impacts internal job families, job descriptions, and career paths.

4. Factor skill management into your sourcing decisions

Companies often outsource to save money only to find that their most valuable internal talent are the first out the door. A sourcing strategy that analyzes how outsourcing decisions impact internal job families, job descriptions, and career paths can help ensure that the right internal talent remains on board.

5. Have a rock solid talent management foundation

An annual review process, promotion criteria, skills assessment processes, and training plans are too often taken for granted in fast-paced IT shops. Annually assess whether or not job families, job descriptions, and career paths align to the operating model, overall IT strategy, and sourcing strategy. Where there is misalignment, work with the HR department to close the gaps.

6. Proactively manage the change

Understand that employees are generally sensitive about job title, career path, and compensation changes, and be proactive about generating the appropriate level of awareness and benefits of changes at multiple points in addressing the talent gap.

We’re happy to report that the health care CIO succeeded in filling the internal talent gap by being more attuned, proactive, and strategic about managing internal talent. She recognized that people are the greatest asset to effective execution, and is now proactively managing internal talent as a top priority.

What ideas are working in your shop to attract and retain talent that truly supports your IT strategy?

cc licensed flickr photo shared by ell brown

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  • Great Stuff Chris.

    I think these are all great steps to closing the gap, but the first step for most IT groups is to include training and people development in the budget. Most organizations today have killed training budgets…and that is killing the organization. Focus on the people within IT and we’ll start seeing some improvements.

  • Anonymous

    Thanks Eric. With the growing popularity of iTunes U, TED and open courses like MIT’s OpenCourseware, it doesn’t have to cost too much. There’s really no excuse anymore.

  • Paul Clermont

    This has been a decades-long issue, yet the current attention suggests we have yet to address it successfully. Sure, training is necessary to bring a neophyte to minimal proficiency, but it’s far from sufficient to move someone from good to great. Innate talent matters!

    So does the difference between good and great. There are few areas of endeavor in which the difference in both productivity and quality of output between the most talented 10% and the lesser talented half is greater. The difference is felt not just in the initial design and implementation but in the maintainability and, even more important, in the flexibility to respond to changed business needs quickly and economically. Unfortunately, typical HR practice demands that we pay IT people as if this were not the case, so the most talented go to start-ups and vendors where they’re recognized and rewarded appropriately while the rest muddle through, happy enough just to keep their jobs.

    If an enterprise wants to get serious about fixing this problem rather than lamenting it, it needs to think clearly about the role of IT in order to find the right mix of strategies for dealing with the talent gap, choosing among:
    • Packages that leverage a vendor’s talent but which are equally available to competitors.
    • Outsourcing custom development.
    • Building in-house talent.
    • Muddling through.
    Building in-house talent may be best for IT which is both mission-critical and which is intended to be a source of continuing strategic advantage. If so, old-fashioned practices that link compensation to budget size and the number of people managed, thus discriminating against “individual contributors” regardless of the real magnitude of their contribution, must change. We can and should amplify individual contributors’ contribution by having them mentor—not necessarily manage—promising folks. Similarly, we can ensure they stay focused on architecture and design where the impact of great versus good talent is the highest.

    If an enterprise is unwilling to abandon its HR practices for IT, it shouldn’t pretend that great things can be done in-house; rather it should focus on packages and outsourcing for its mission-critical and strategic IT. Inherent disadvantages can be minimized, if not eliminated, by common-sense direction and management, but that’s for another post.

    There may be a role still for muddling through, but with today’s range and quality of packages, it’s hard to see what it is.

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