Mainframe skills, pay at a premium

IT managers looking to cut labour costs during the ongoing recession might want to think twice before laying off any of their workers who have mainframe or data centre skills.

With mainframe shipments on the rise and legions of traditional mainframe IT workers nearing retirement age, technology managers last week said it’s becoming increasingly difficult and costly to replace employees who have deep experience in Cobol, CICS and other mainframe technologies.

For example, the Workplace Safety and Insurance Board of Ontario is shelling out 10 percent to 15 per cent signing bonuses to new workers with mainframe skills. The Toronto-based board, which oversees workplace safety and workers’ compensation issues for the province of Ontario, also pays “hot skills” premiums to mainframe experts. That can boost their annual salaries by as much as 10 per cent, said David Londry, director of the board’s corporate information centre.

At the Automobile Club of Southern California, a Costa Mesa, Calif.-based affiliate of Heathrow, Florida-based AAA (formerly known as the American Automobile Association), IT manager Bill Reinl said he’s using part of his annual training budget to bring younger workers up to speed on mainframe technologies.

And the skills crunch is only going to get worse, according to Stamford, Conn.-based Meta Group Inc. As part of preliminary results from a survey of 300 midsize and large companies, Meta last month said it found that 55 per cent of IT workers with mainframe experience are over 50 years old.

A bigger problem is that more than 90 per cent of the companies that have mainframe staffs said in the survey that they have “zero strategy” for dealing with the diminishing pool of skilled workers, said Meta analyst Maria Schafer. Meanwhile, all indications are that legacy mainframe systems and applications not to mention new technologies such as IBM Corp.’s zSeries servers will be around long after those workers have retired.

Companies continue to add a total of about 5 billion lines of Cobol code annually to their data centre systems, according to Bill Ulrich, president of management consulting firm Tactical Strategy Group Inc. in Soquel, Calif. And IBM in January said its annual mainframe revenue grew last year for the first time since 1989.

Industries that are expected to be hit particularly hard by the mainframe skills shortage include telecommunications, banking and finance, insurance and government, all of which have huge installed bases of mainframe systems.

“The mainframe is the foundation that everything is built on [here],” said Don Greb, first vice-president and manager of information processing engineering services at Mellon Financial Corp. in Pittsburgh. “The majority of our data is still residing on a mainframe, even though a lot of it is front-ended through the Web and e-commerce applications.”

Among other steps it is taking aimed at preserving its mainframe know-how, Mellon has launched a summer internship program during which the company teaches mainframe skills to university students it hopes to recruit after they graduate, Greb said.

But David Lewis, CIO for the Massachusetts state government, said he’s more concerned about the skills that can’t be taught and have to be learned by workers through hands-on experience.

“Where you start running into really tricky issues is around the products that run on the mainframe and how they interrelate to each other,” Lewis said, calling that “an acquired skill” that will take time for new workers to grasp.

“You don’t go to school to see how CA interacts with IBM,” Lewis said, referring to software vendor Computer Associates International Inc. in Islandia, N.Y. “You learn it by experience. That’s where I frankly think the greatest risks exist [for companies].”

Bill Payson is sick and tired of debating whether Cobol is obsolete. “The fact is, there’s so much Cobol out there that companies are going to have to deal with it,” said Payson, president of The Senior Staff, a Campbell, Calif.-based online job information data bank for IT workers who are 35 or older.

Payson is helping to organize the Legacy Reserves, which he described as “a free-agent initiative” for retired, semiretired or out-of-work Cobol programmers who are seeking freelance assignments. The plan will be formally launched in June at the Cobol Expo 2002 conference in Chicago.

The Legacy Reserves is being set up by a partnership that also includes the Pleasant Hill, Calif.-based Professional Association of Contract Employees (PACE) and Micro Focus International Ltd., a Rockville, Md.-based vendor whose products include a Cobol software compiler.

Payson, who is working from a database that contains the names of mainframe programmers, many of whom previously were tapped to work on Y2k projects, said he has identified 3,000 to 4,000 Cobol veterans who want to return to work on a contract basis.

“They don’t want full-time jobs, but they’re sick of sitting on the beach or playing golf all the time,” he said.

Although all the details have yet to be worked out, the idea is that companies would go through PACE to contract with workers who are listed in Payson’s database. PACE would function as the employer of record for the workers.

The Legacy Reserves also plans to offer workers training in Java and other technologies that can be used to Web-enable mainframe applications, Payson said.

Bob Schwartz, CIO at Matsushita Electric Corporation of America’s Panasonic Co. division in Secaucus, N.J., said Payson’s database of experienced workers “may become intriguing to use when we need those skills.”

But other IT managers said they would prefer to hire full-time employees, not contractors.

“With contractors, there tends to be less of an organizational affiliation,” said Louis Gutierrez, former CIO at Harvard Pilgrim Health Care Inc. in Wellesley, Mass.

“With full-time [employees], you can really work on staff development and incorporating them into an organizational mission,” added Gutierrez, who’s now a principal at Exeter Group Inc., an IT consultancy in Cambridge, Mass.