For several years state governments have warned that the graying of the baby boom generation would result in a “retirement wave” of public-sector employees whose institutional knowledge wouldn’t be easily replaced.

New data released Wednesday, Jan. 26, by the National Association of State Chief Information Officers suggests that the sluggish economy of the past three years has delayed but not eliminated the expected exodus of aging IT workers from state government.

The association’s report found many state CIOs still expect 20 to 30 percent of their work force to retire during the next 5 years — an estimate largely unchanged from 2007, according NASCIO policy analyst Chad Grant. Many older IT workers postponed their retirement when the economy turned south, but they will still eventually leave.

Grant said the state IT work force is slightly older than the federal IT work force, according to Bureau of Labor Statistics — so retirements should hit the states first.

“Staff had postponed retirement because of the economy, but now are looking at retirement because of the possibility of more furlough days, higher contributions toward retirement and health premiums,” said one unnamed commenter in NASCIO’s report, titled State IT Workforce: Under Pressure. The report is available for free download http://www.nascio.org/publications/. (Forty-one states, the District of Columbia and one territory responded.)

The loss of institutional knowledge caused by retirements will be compounded by reductions in IT staff. Nearly 62 percent of respondents at the state level anticipate having to reduce IT staff in 2011, through a combination of hiring freezes, attrition and leaving positions unfilled. Of those who expect staff reductions, the average cut is projected to be 10 percent of the work force, Grant said. He also noted more states are engaging in technology consolidation initiatives which account for some, but not all, of staff reductions.

Furthermore, nearly 55 percent of respondents said they were having trouble filling IT positions. Government continues to have trouble competing with higher salaries in the private sector and restrictions in the civil service system, Grant said.More than 78 percent of state CIOs confirmed that state salary rates and pay grade structures present a challenge in attracting and retaining skilled IT talent,” the report said.

States continue to struggle most with attracting and retaining employees in security and project management — the same finding as when NASCIO last studied the IT work force in 2007. But Grant said a surprising new problem has emerged as smartphone technology has evolved: About 47 percent state CIOs said they are struggling to find employees skilled in mobile application develoment.

Despite the gloomy outlook, the employment picture actually varies significantly state to state.

“Surprisingly, six states showed increases of 4 percent or higher in full-time equivalent employment, led by Illinois with a 6.2 percent increase. Some of these increases in the states may be attributed to managing federal funds the states have received through the American Recovery and Reinvestment Act,” the report said. “On the other end of the spectrum, four states showed decreases of 4 percent or higher in full-time equivalent employment, led by Maine with a 6.8 percent decrease.”

Grant said states could help themselves by studying their work force. Less than one in four states that responded said they do a skill assessment of their IT employees. Doing this study would help state identify their skill gaps more quickly, he said.

Matt Williams Matt Williams  |  Contributing Writer

Matt Williams was previously the news editor of Govtech.com, and is now a contributor to Government Technology and Public CIO magazines.