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Workforce Outsource Services, a nonprofit IT services organization, fills the hiring needs of several big and small companies with recruits from America's inner-city.
Langer Report: IT Perspectives From Columbia Prof. Arthur Langer
CIOs Having Hard Time Finding Skilled IT Workers
By Elizabeth S. Bennett
Last year, Medco Health Solutions' CIO Mark Halloran saw the future and it wasn't pretty. The numbers told him that in the next 10 to 15 years, roughly 20% of Medco's technology staff would be retiring. Halloran had to determine who would replace those 300 or so baby boomers and their 1,500 years of collective experience when they walked out the door.
Halloran originally saw three options: Replace Medco's legacy IBM computing platforms, obviating the need for certain skills like Cobol programming; start training a new workforce, knowing full well how hard (and expensive) it is to find good IT talent; or go with an offshore partner that would have to be trained in the complex workings of Medco's existing business systems.
But then the CIO for the $44 billion pharmacy benefit management company came across a fourth option.
Medco decided to partner with a non-profit organization called Workforce Outsource Services (WOS), which hires, trains and certifies technically minded adults from low-income neighborhoods in New York and New Jersey. Medco, based in Franklin Lakes, N.J., would not only be setting itself up with a more diverse workforce and a long-term investment in neighboring communities, but it found that the partnership would make sense from an operations and financial standpoint.
Not only will WOS offer a previously untapped source of workers to fill his looming hiring gap, but Halloran also estimates that Medco will see a return on its staffing investment in just over a year, based on the wage variance to domestic consultants and the dollars it will save during the internship period.
Filling The Gaps
Several factors, not just an aging workforce, are contributing to impending staffing shortfalls in the information technology sector: Between 2006 and 2016, 854,000 additional IT professionals will be need in the workforce, an increase of about 24 percent, according to the U.S. Bureau of Labor Statistics. Compounding the demand is that American students are less interested in receiving technology degrees than they were in the past. Enrollment in undergraduate degree programs in computer sciences has dropped 50 percent in the last five years, according to an annual survey of universities with Ph.D.-granting programs conducted by The Computing Research Association.
But what those numbers don't take into account are the bright young people who might be interested in an IT career, but, because of financial or social factors, don't get a college education.
WOS, founded in 2005, identifies bright and driven young people in their late teens and 20s through public schools, community colleges and other social organizations in New York and New Jersey's inner-cities. It invites them to participate in an intensive 16-month training and certification program at either Columbia University or Rutgers University, at the end of which they receive a certificate in Web development.
During and after their technology immersion, WOS participants are placed in organizations like Medco, Thirteen/WNET, Prudential and The Museum of Modern Art, first on a part-time basis. All workers in the program are closely supervised by either a senior WOS employee onsite or a qualified in-house manager. They also have ongoing support from a network of mentors engaged with or employed by the program.
"WOS gives students from disadvantaged areas an inside track to the corporate environment," says Halloran.
He became acquainted with the program when he was serving as a mentor to students in Columbia University's Master of Science program in executive technology management.
And it didn't take long for Halloran to see that the program made good business sense. He knew the program could give Medco a feed of eager, young workers at a reasonable cost.
Here's how it worked at Medco.
Last December, Medco made a $250,000 donation to WOS. That money was used to sponsor 25 students in a technology training program at Rutgers University. As a non-profit organization, WOS is not able to make contractual arrangements with donors. However, Halloran had a series of conversations with WOS chairman and founder Art Langer—who's also associate director for instructor and curricular development of IT Programs at Columbia University's School of Continuing Education—about Medco's staffing needs and the role that WOS might play, should some of those 25 students excel in the program. While WOS is under no obligation to Medco or other partners, it consulted with them regarding their IT employment needs and, in the case of Medco, developed a plan to place eight young people in junior-level technology positions beginning in July.
Medco is billed a daily rate for each contract worker, but at a price that is, by several accounts, significantly less than the roughly $380 day rate of an information analyst or programmer with an offshore Indian firm.
And because WOS—not Medco—will pay its workers during their initial six months of part-time work as part of their training, the financial advantage increases, according to Halloran.
While all WOS workers are certified in Web development, some have additional skills and experience in areas like information systems design, help desk support and quality assurance testing, Halloran intends to train those who start at Medco in the Cobol and Enterprise Generation Language (EGL) programming languages, data modeling, desktop support and, possibly, quality assurance. "We're going to assess their skills and strengths to see where the best fit is," says Halloran.
Outsourcing With Diversity
But Medco isn't alone in seeing the real benefits WOS offers.
Thirteen/WNET has already seen the payoff from its partnership with WOS, according to CIO Ken Devine. The New York City-based public broadcasting company has a different type of partnership with WOS. It outsources its help desk function entirely to WOS with six full-time contractors who configure and support 700 computers and electronic devices, lead software trainings and handle "in-person triage and handholding," as Devine puts it.
WOS founder Langer had been a long-time academic technology consultant to Thirteen and he observed the weaknesses in the programs that Thirteen and other organizations had experimented with. He applied those lessons when he created WOS. Thirteen became the first company to use WOS strictly as an outsourcer in late 2006, when it set about a reorganization to more fully integrate its IT and engineering departments. At the time, CIO Devine says, Thirteen determined that the help desk had to be retooled to provide better and more efficient service. Until then, the support staff had consisted mostly of interns from continuing education programs and local trade schools, but it was very challenging to find enough interns with the necessary skills, says Devine. "WOS solved the intern supply problems as well as the management issues," he explains.
Since Thirteen began using WOS, service has improved dramatically, according to Devine. Prior to WOS, the number of open help-desk tickets regularly ballooned to 300 or 400. After six months on the job, the WOS workers reduced that figure to 20, which remains the average today. It did so by resolving a number of "longstanding issues" that had overwhelmed the previous staff, all of whom eventually left the company through attrition.
Devine figures the organization has cut operating costs by 20 percent with a larger more efficient staff that costs less money. And it has saved significantly by not having to use IT recruiters for the last few years. It's also made his job easier. "In terms of day-to-day bumps in the road, there has never been an issue that escalated up to my level," he says.
Devine and his employer were early champions of WOS's mission. Thirteen tried different approaches to address the dearth of minorities and women in its tech department, including using Department of Labor money earmarked for targeted recruitment and training. "As a public media operation, it's our obligation to go the extra mile," says Devine. But none of the efforts led to long-term success. "The notion that we might have adequate resources to develop a training and placement program for women and minorities was not feasible," he says. "Thirteen was too encumbered by the intricacies of being a public television station."
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