Budget cuts and layoffs have forced many IT departments to make do with less, leaving older IT workers vulnerable to younger employees whose skills may be more up to date

IT careers: Retire? How about never?

For as long as he could remember, Ben Richardson had big plans for an early retirement.

Passionate about computers, but anxious to leave the confines of a desk job, Richardson, a technical adviser in database services for CVS/Caremark, had prepped for a host of post-tech alternatives even as he met the demands of his IT career.

He took classes and labored on business plans, dreaming of the time when he would be able to retire from IT and pursue his love of what he calls “blue-collar hobbies.”

He thought he might teach school, start an HVAC business or even get into general contracting and welding. “I wanted to spend more time outside and get healthy,” Richardson explains. “Sitting in a chair for 30 years takes its toll.”

Scratch that. Thanks to the tanking economy, Richardson, now 52, has put all those plans on hold. “When the recession hit, I knew I wasn’t going to be able to retire,” he says. “I decided to hunker down and keep my current job because the market was so poor. I have a good-paying job here, and changing jobs now isn’t such a good idea.”

Nearly two years into the recession, shrinking nest eggs and the fear of skyrocketing health care costs are forcing late-career IT professionals to trade dreams of early retirement for the reality of toiling extra years in the workforce.

Instead of channeling their energies to around-the-world travel, starting a new business or devoting time to volunteer work, IT veterans find themselves either actively in the job market or desperately safeguarding their current employment. They’re refocusing on career management, ramping up their skills training and trying to be as flexible about their job responsibilities as a twentysomething just starting out.

Whippersnappers in the rear view

IT is hardly the only career sector ravaged by the recession — in fact, experts say that it has weathered the storm better than most. (For example, data from the U.S. Bureau of Labor Statistics for the third quarter of fiscal year 2009 indicated that unemployment rates for several key IT positions averaged 5.8 per cent, which is substantially lower than the overall Q3 U.S. average unemployment rate of 8.9 per cent for all fields.)

But budget cuts and layoffs have forced many IT departments to make do with less, leaving older IT workers vulnerable to younger employees whose skills may be more up to date and who are often willing to take less pay, work more hours and take on less desirable assignments.

Overall, the recession has had far more of an economic impact on late-middle-aged adults. In an April Pew Research Center study of 2,969 adults aged 50 to 64, nearly 75% said the nation’s economic problems are making it difficult to afford retirement.

Nearly two-thirds of those surveyed in that age bracket said their 401(k) accounts or individual stocks have been clobbered, with two in 10 claiming that their investments have lost 40% of their value and another four in 10 saying nearly 20% to 40% of their retirement funds have been erased.

“Everyone has been deeply affected by poor stock performance, and if you’re depending on a 401(k) plan to retire, you probably can’t do it just yet,” says David Van De Voort, an IT workforce strategy consultant at Mercer LLC. “I get the sense that people are changing their plans in earnest,” he says, particularly in new-economy sectors like IT, where retirement savings are more likely to be tied to the stock market.

Even IT professionals who are financially sound say they are putting off retirement for other reasons. Some can’t — or aren’t willing to — underwrite the substantial health insurance costs they’d have to pay out of pocket until they were eligible for Medicare. And many of those who were hoping to ease into a semi-retirement with contract work have seen a lot of those opportunities dry up and no longer feel comfortable leaving a full-time gig just now.

There’s always the group that isn’t ready for retirement because they’re enjoying their jobs so much, and yet even that segment of IT has had to make some adjustments during this trying economic period. Instead of being able to cruise comfortably through the twilight of their careers, these IT veterans have had to step it up a notch, making an effort to stay on top of management and technology trends, invest in ongoing training and, in some cases, take the plunge and completely retool their skill sets.

“There is no place to hide in this economy — IT has been affected by budget and staffing cuts and impacted by layoffs,” says Dave Willmer, executive director for staffing firm Robert Half Technology.

The reality for IT workers of any age is that they are being asked to do more with less, take on roles outside of their areas of expertise, forgo raises, and deal with more strenuous deadlines and the stress that comes with them. It might not be the grand finale that tech veterans envisioned for themselves, but it’s the reality of today’s market, and IT professionals need to adapt.

“No one can sit on their laurels in the current work environment,” Willmer says. “Folks may not have planned on this, but it’s better than the alternative, which is not working. People can’t afford to coast. They have to perform and get back in the game, especially if they’re going to be here longer than they anticipated.”

To see how IT veterans are weathering these changes, Computerworld checked in with a group of late-career professionals. Here’s what they had to say about the impact of the recession and their late-career Plan B.

52 and reconnecting with the desk job

CVS/Caremark’s Richardson diligently planned for an early retirement — he dutifully socked away 10% of his earnings for years into a 401(k), received matching funds from employers and aggressively paid down his mortgage. But he now believes the time isn’t right to start anything new. His nest egg is a whole lot smaller, he says, and regrettably, there isn’t much of a market in his current home state of Arizona to make a go at contracting work or starting his own HVAC business.

Fortunately, Richardson, who graduated from college with a chemistry degree, had decided even before the economy tanked that he should pursue a degree in computer science for job insurance. He graduated in 2007 from Colorado Technical University, even as he was dreaming of making a career from his blue-collar hobbies.

Now, instead of once more retooling his skills for a career in HVAC, Richardson is recommitting to the idea of staying in IT at CVS/Caremark. He’s trying to make the most of that recent degree, which he believes increases his value to the company while opening doors to other roles, if and when he chooses.

Richardson’s new plan is to retire in the next 18 months to two years, and he still sees a future ripe with plenty of new opportunities, possibly IT contract work as a SAS 70 or HIPAA auditor. “Just because I have my job doesn’t mean I’m not able to accomplish my other goals,” he says. “I’m keeping all irons in the fire and keeping all avenues open.”

62 and worried about health care costs

Glenn Kuhn, a technical consultant at Allstate Insurance Co., is doing whatever he can to keep his job safe.

While Kuhn, 62, had hoped to retire somewhere between 55 and 60, he is still plugging away programming mainframe systems, mostly because he’s not in any financial position to move on. Like many others, his retirement savings in 401(k) plans and IRAs have lost a significant chunk of their value.

Yet the real barrier between Kuhn and a retirement full of fishing trips and visits with the grandkids is the rising cost of health insurance — an annual fee, he estimates, that would run around $10,000 to cover him and his wife until they are eligible for Medicare. “I’m 62 and have worked in this business pushing 40 years, but unless you you’ve got some kind of health program, you’re out of luck,” he says.

While he has always enjoyed his work, the long, tedious hours at a keyboard and the stress of 2 a.m. emergency calls for system support have taken a toll on his body and his mind.

“I’ve got arthritis in my hands, have had carpal tunnel surgery and get up every morning and soak my hands in hot water so I can work on a keyboard,” Kuhn says. “It’s not like I’m a construction worker out there in the cold with frostbitten fingers, but in some ways, it’s just as hard on your body and your mentality.”

With his retirement delayed, Kuhn doesn’t anticipate any radical late-career changes. Instead, he’s keeping his nose to the grindstone and carrying on with the work at hand. Since he’s chosen to stay in a more technical role, bypassing management, Kuhn knows he has to keep his skills fresh. In that vein, he’s taking classes in Unix and doing informal research to keep up with emerging technologies.

Kuhn’s biggest hope right now is to be able to preserve the flexibility of his job, which currently allows him to work from home. “There aren’t a lot of mainframe programmer jobs in northern Wisconsin,” he says. “If my boss calls and says, ‘We want you back in the office,’ I’m going to get the hint real quick and say OK.”

53 and hoping for contract work

Steven Pratt, an eDBA for the Illinois State Police, has long had a Phase 2 career plan to leverage his specific set of mainframe and DB2 programming skills. Pratt, age 53, had intended to take advantage of the state’s early retirement option, which he became eligible for last year, and dive into contract work to make up the difference in pay.

“Up until three years ago, there was a little niche of short-term contract opportunities,” says Pratt, who envisioned traveling to Iowa or Boston or anywhere else in the U.S. to work on projects for several weeks while having plenty of downtime in between assignments.

“I saw it as an opportunity to have a second phase of my career, slow it down a bit and travel,” he says. “But the opportunities all dried up with the change in the economy and put a monkey wrench into my plans.” Now, his plan is to continue working full time for another two to three years and then reassess the market for contract work.

Pratt is brushing up his mainframe programming skills, specifically taking courses in assembler language — a skill that may be out of date for many markets but is still valued in state government.

Pratt sees a future where he has a leg up — not by learning new Internet programming technologies, but rather by staying faithful to the mainframe skills that he knows best. “They still need my skills — it gives me job stability,” he says. “There are plenty of job opportunities if I want to work full time. I just didn’t want to work full time anymore, but that [part-time] opportunity has dried up on me.”

67 and still working 40 hours

Richard Langford, 67, also feels the pressure to ride out another couple of years in state government so he can take advantage of his state’s full retirement benefits.

Langford, a project manager in Utah’s Department of Technology Services, jumped around a lot during the course of his career, which shut him out from any company-sponsored pension. By his own account, he was lax in proactively planning for retirement with an individual retirement savings plan or 401(k). In fact, he didn’t think much about retirement until it sneaked up on him. “I moved around so many times, I didn’t worry about it,” Langford admits. “Suddenly, at age 60, it became my real focus.”

Now, while most of his peers are pursuing interests like fishing and hunting, Langford is still putting in a full state-mandated workweek — four 10-hour days. The load can be stressful and tiring for someone his age, he concedes. “My plan now is to retire at 69,” Langford says. “My Social Security benefits will almost be at their max, but my health will probably be shot.”

Langford is realistic about what it will take to remain an asset in IT for another couple of years. He is planning to get his Project Management Professional certification, which is rare among IT employees in the state of Utah and, he hopes, will put him ahead of the pack.

59 and happily going strong

Some career veterans, of course, are never ready to throw in the towel, regardless of age and financial position. Doug Sharp, an information systems specialist with the Michigan Department of Information Technology, says he’s eligible for retirement now, at age 59, but has no interest.

It’s not about the money — he’s already eligible for the state’s defined benefit program, so the recession hasn’t impacted him. Rather, he still enjoys the challenge of the job. “I had thoughts about retiring a year ago, but after considering it, I couldn’t figure out what I would do,” says Sharp, who has since boned up on technologies such as .Net and SQL Server, which are still critical for his industry and his organization in particular.

Sharp also feels a responsibility to keep up maintenance on the 75 production applications he supports. “If I left, they’d be hurting a little bit,” he says. “It’s their problem, but it’s also my opportunity.”

At 59, George Hanrahan, director of information systems for Spokane Transit, is also in no hurry to leave his post. The recession has had no significant impact on his retirement plans, and as long as his health holds up, he sees himself spending perhaps another decade at this job, guiding the transit company through its transition to newer technologies like IP security cameras, IP phones, ERP systems, even social media.

“I enjoy the job enough to stay,” he explains. “If I could craft what I want, I’d work this into a part-time position and stay until 68 or 69, assuming my health is good,” Hanrahan says.

Recession or no, Hanrahan aims to accomplish what most IT professionals ultimately hope for at the end of their careers — success, and then closure. “I [hope to] see my vision put in place, hire my replacement, and then ride off into the sunset.”

Stackpole, a frequent Computerworld contributor, has reported on business and technology for more than 20 years.

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