Finding a Way

Work force issues test the public sector's human resources strategy.

by / August 31, 2005
"There are three kinds of lies: lies, damned lies, and statistics."

It's a quote we've all heard thanks to Mark Twain -- though Twain credited English novelist and Parliament member Benjamin Disraeli as the quote's originator.

The public sector probably wishes the statistics on retiring workers were lies, but the numbers paint a grimly truthful picture.

In more than 25 states, one in five employees will retire over the next five years, according to Grading the States 2005, a report from the Government Performance Project, a research program supported by a grant from the Pew Charitable Trusts. A worst-case scenario is Tennessee -- it stands to lose 40 percent of its work force in the next few years.

CIOs aren't immune -- plenty of senior IT staff and management will be ready to retire too. The usual take on this coming retirement flood is dire: State and local governments will lose valuable institutional knowledge when the only people who know how to coax data out of those old IT systems leave their jobs.

The loss of experienced staff is a concern for CIOs, but the retirement issue is only part of a larger, interwoven set of work force challenges facing government IT shops. In addition to the retirement issue are:

  • a growing gap between the skills IT staff possess and the IT skills agencies need today, such as the ability to design and develop new Web-based applications;
  • a surprising lack of younger workers -- often due to civil service rules making the newest employees the first laid off when times get rough;
  • a lack of in-house IT talent -- especially at the federal level -- that can take on broader responsibilities such as project or contractor management; and
  • large numbers of older workers who have the skills to keep the old systems chugging, but often can't fathom the IT needs of younger, Web-savvy citizens.

    Indeed, some take a less bleak view of the number of government IT retirees, arguing instead that the institutional knowledge of legacy systems creates a mismatch of IT skills, which hinders efforts to modernize IT systems and applications. They contend that long-time staff members attempt to develop new applications using old technology, instead of adopting new Web-based approaches.

    Not OK in Oklahoma
    Edward Beck, executive director of IT for Oklahoma City Public Schools, said the district is upside-down in terms of IT staff knowledge and experience because the majority of senior IT staff and managers are well versed in legacy technology.

    That can impede progress, Beck said, because federal requirements, such as the No Child Left Behind Act, put new demands on school districts -- demands that districts could meet with new technologies.

    "There hasn't been a lot of funding until recently for the educational world to procure newer technologies," Beck said. "Some of the decisions they made at key points were entirely financially based. The typical thing to do is stick with what you know, and if what they know is 20 years old when they made the decision, then here five or 10 years later, obviously what we have in-house as far as systems is now a handicap."

    As a result, school districts, like government agencies, find themselves stuck with older systems that may work for some functions but don't necessarily match the needs of the modern world.

    "It's a challenge to change when you don't have the staff, and in the government world, you just can't change your staff," he said. "There's a little bit of a roadblock when you need to provide training or replace the person with an individual with a different skill set."

    Hiring new staff is difficult partly because of funding limitations, Beck
  • explained. If a school district gets E-Rate or other federal funding for technology, it can only be used for very specific, program-based purposes, and salaries for new IT staff isn't one of them.

    Public-sector officials know funding limitations all too well, having tolerated federal funding with strings attached for years. Education has been forced to use general fund money to hire new staff, but tight budgets put the clamps on potential new hires.

    "You have to try and train existing personnel first," Beck said. "But the reality is that if they've been doing old mainframe technologies for 15, 20 years, they're not going to open up .NET framework and understand within a 30- to 60-day timeframe how to get it to work, how to develop applications in it.

    "A lot of people are still in that data-processing mentality, doing data processing and shoving out green-bar reports," he continued. "Those days are over. Ironically even in our systems today we emulate green-bar paper on the laser printer because somebody feels comfortable with it. There are some things we just don't let go of."

    Uncle Sam's Staffing Woes
    Though state and local governments face their own personnel issues, they're not alone. The federal government is in the same boat when it comes to IT staff, and is casting about for solutions. Observers have plenty of suggestions.

    Changing hiring practices is one tactic the federal government should adopt, said Steve Kelman, professor of public management at Harvard University's Kennedy School of Government.

    The federal government should alter its approach and policies, and hire employees midcareer, Kelman said, instead of hiring at entry and senior levels only, which it typically does.

    It's a problem built over time, he explained, especially since federal agencies increasingly choose to outsource code writing and maintenance. That, coupled with growing use of commercial off-the-shelf software that requires little customization, has blocked the personnel pipeline.

    "A normal career progression would be to start as a code writer and move up to management positions," Kelman explained. "The things done in-house are more at the management and leader level -- policy setting, requirement setting and managing contractors. A challenge for the government is that if you don't have a pipeline of coders coming up through the system, where are you going to get those people?"

    The federal government needs people technically smart enough to manage IT contractors and projects, but it doesn't have a cadre of managers in the wings who are seasoned by years of application development.

    "Particularly in IT, the idea of bringing in people at a management level who've gotten their code-writing experience in the private sector and are midcareer type people is important," Kelman continued. "The federal government is making some progress. I've seen figures suggesting a modest increase in the percentage of those hired at midlevel over the last few years who come from outside of government as opposed to inside of government."

    Despite growing numbers of midcareer hires, it's not an idea that HR divisions historically embrace when attempting to fill open positions. In part, Kelman said, the move to midcareer hires is a new way of thinking about human resources and the nature of career paths in government IT.

    "It's a fairly sophisticated argument that the change in the government's role in IT -- to pull it off successfully -- you need a change in government HR practices to allow for more people to come in at midcareer levels," he said. "HR has been a very transactional and control-oriented function, not a function that typically thinks strategically about how the management of people can help an agency reach its mission. It's been much more processing paperwork and checking for rule compliance."

  • Managing the Work Force
    State human resource departments have also changed MOs to better respond to the needs of a changing work force. Human resource directors know the predicament facing state agencies in the next decade as more staff reach retirement eligibility.

    In years past, state HR departments focused on compliance functions and enforcing employment practices rules, said Sara Wilson, director of Virginia's Department of Human Resource Management (DHRM). Now Virginia focuses on putting tools in managers' hands so they can make the right hiring decisions, putting accountability for hiring practices at the agency level and freeing the centralized HR agency to tackle larger work force issues.

    "We're here to counsel to minimize your risk and make sure you're taking care of the things you need to take care of," said Wilson, who chairs the Workforce of the Future Taskforce for the National Association of State Personnel Executives. "We've really changed how we do human resources."

    Now the emphasis for state HR agencies is work force planning -- knowing the numbers of employees eligible for retirement, who they are, in which agencies they work and the risks to those agencies.

    "We're doing a lot of work force transition and succession planning in Virginia," Wilson said. "In the public sector it's a little different than in the private sector -- there's no pre-selection. Everybody competes for jobs. But you can identify classes of people.

    "We identify high-risk people in our agency. They don't all report to me. Some of them work at a much lower level, but they're the only person who does a particular job," Wilson said. "Where's the food chain? Where's the natural successor to some of these jobs? Those are high-risk jobs for us."

    Besides determining what areas pose the greatest risk for a state, work force planning might unearth some surprises. Wilson said the DHRM recently found that 8 percent of the state's work force that's eligible to retire has not retired. "We're not finding the massive exodus in Virginia, even though they're eligible for retirement," she said. "Eight percent is a big number of people to stay working."

    That equates to 5,438 employees, she said, and the state is forecasting 21 percent of its work force will be eligible for retirement in five years and 36 percent will be eligible in 10 years.

    Perhaps the most surprising thing the DHRM discovered in its work force planning efforts is a lack of younger workers on the state payroll.

    "Last year, only 5 percent of the state's classified work force was 27 years old or younger," she said, noting that the state employs 71,986 full-time equivalents, a measurement equal to one staff person working a full-time work schedule for one year. "Part of why that number is there is because if you do layoffs, it's the more recent people with no seniority. If you're not doing any new hires, that's going to have an impact."

    That low number of young workers very likely has increased to 8 percent by now, Wilson estimated, because the state hired more people during the last fiscal year.

    Clogging the Drain
    Besides the potential of losing many people to retirement, state and local governments fear losing the irreplaceable institutional knowledge locked in the minds of key IT staff.

    Delaware relies on some IT systems dating back to the 1940s and 1950s, said state CIO Tom Jarrett, and precious few people know those systems' ropes.

    "We all have embedded legacy systems that have been around for years," Jarrett said. "If for the next five, six or seven years I'm still going to have to maintain these systems but I look at the percentage of people able to retire today -- it's very high, probably well over 50 percent just in my department -- a
  • lot of them have been running these systems for a very long time. Where do I find the expertise on the street to maintain those systems?"

    There would likely be less concern if states had to deal only with the retirement wave. But problems love company. Though the old guard may retire in droves, legacy systems won't retire anytime soon.

    If states could count on funding to replace old systems with new technology while the retirement wave occurred, life would be sweet. The new staff hired to replace retirees would then ply their skills on new technology with which they're fully conversant.

    That's not happening, Jarrett said, and it's going to be extremely difficult to persuade legislatures to allocate money for IT departments for a switch to modern IT platforms or systems.

    "We aren't seeing it happen here, and when I talk to my counterparts, I don't hear that it's happening there either," Jarrett said, noting that states can't even train new hires on old technology. "It's very difficult, depending on the systems you're using, to find the training because nobody is doing it anymore."

    States will have an easier time training the old guard in new technologies, he said. Delaware itself spends between $2,000 and $3,000 per person each year to help IT staff familiarize themselves with advancements in hardware, software and infrastructure.

    It's not hiring new staff that causes problems, Jarrett said, it's transferring the old expertise -- programming in UNIX, DB2, COBOL and other esoteric languages -- to the young blood.

    "We also have some homegrown systems that were designed years ago," he said. "That's even worse. Our financial system was an AMS system but was modified to become a 'Delaware' system. That's a huge risk. I can't even go to the street to find somebody to help me with that."

    One strategy is to convince as many potential retirees as possible to keep working in state government. Jarrett said he's kept workers around longer because he has sufficient latitude in salary structure to pay them more than they'd earn in a typical public-sector IT position.

    Other states are experimenting with various inducements to retain older workers, and though some experiments are succeeding, might states be opening themselves up to a cultural divide between their constituency and their work force?

    The Right Medium
    Oregon's Scott Smith thought, the state's new portal, would pass the critique of even the toughest audience -- his 16-year-old son. Smith is director of operations of Oregon's Information Resources Management Division (IRMD), and is also manager of the state's E-Government Program.

    One night at home, he said, he showed the portal to his son and got a little surprise.

    "I took him to the portal and navigated through a lot of the different layers and different agencies," Smith recalled. "I told him we have 95,000 pages of information out there, and he just wasn't impressed. I was dumbfounded, and told him, 'This is a big deal. This is a lot of information. We've never had this before.'

    "His comment was, 'Yeah, but you can't connect to it,'" Smith said.

    When Smith pressed him to explain what he meant, his son said all he could do is read the Web site and maybe download a few files -- he can't connect to it the way he connects to other Web sites, downloads music files and shoots those files to a friend during an instant-messaging session.

    "The content on our Web site is relevant, but the medium and the pipeline aren't compatible with what he does now," Smith explained. "The problem is that I'm an old guy. I can't sit there and envision what our portal
  • should be or act like. That's going to take some thinking."

    Because of the age range of the state's senior IT staff, he said, it's conceptually challenging for them to produce a portal that appeals to the younger generation.

    This is something all states will have to face. The DVD generation is the next crop of users of e-government services, and they can be rather demanding. Smith said the state is looking at options to get around this cultural divide.

    One option is an intriguing potential partnership with Portland State University. The university's Hatfield School of Government runs the Electronic Government Program, and university officials approached Smith with an idea for an internship program.

    "They would pull recent graduates from across the nation who are interested in new directions in media and customer connection, and bring them out here to work with the old guard and the new folks coming in, and seed their thinking with some of these new technologies and approaches.

    "I don't think the group of people managing technology in the state are going to be prepared for the demands coming five or six years down the road," Smith said. "We need to be planning now to move in that direction."

    Another option is tapping a planning advisory group that will support a new e-government governing board that just won approval from the Department of Administrative Services, of which the IRMD is part. Smith said the planning advisory group's composition will play a big role in the state's e-government future.

    "I find it odd that I'm saying, 'Gee, I'm excited about the planning board,'" he said. "Because normally the planning group is where all the snoring occurs."

    Smith said he believes the planning group will set the direction and make decisions about e-government's path in Oregon. That's where the nitty-gritty decisions are made, including what media approach the state adopts, how the state connects to constituents through the portal, and what applications constituents say they want to see from government.

    He will ask the director of the state's Office of Regulatory Streamlining to head the planning board.

    "He's already looking at how we do business and saying, 'Why do we do it this way?'" Smith continued. "The rest of the folks on there ... we tend to default to, 'Well, bring the CIO in' or 'Bring the deputy director in.' We have to be more surgical and strategic about this.

    "We have to look in all these agencies to find the people really responsible for getting the work done," he said. "The people that are really responsible for delivering services to customers and constituents -- those are the people I want to pull into this planning group."
    Shane Peterson Associate Editor