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Preparing for an IT Talent Squeeze

October 1, 2009
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Related Topics: Intranets/Extranets, Workforce Planning, Featured Article
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Information technology leaders shouldn’t be lulled by today’s sluggish hiring market into thinking IT employees won’t be on the move anytime soon. With the race to computerize the nation’s medical records poised to take off, that’s going to change, industry watchers say.

The federal government’s tight time frame for computerization, along with a steep implementation curve, will require more bodies—soon, and in the thousands at least, they say. The federal stimulus bill, which earmarked $19 billion for incentives related to computerization at hospitals and physician practices, also included financial penalties beginning in 2015. Just 9 percent of hospitals use electronic records on even a limited basis, according to a recent study.

Based in recent discussions with IT experts, the debate seems to be less about the likelihood of a hiring surge and more about how many jobs it will fuel and how soon that surge will happen.

Job projections range widely, from at least 41,000 positions to more than 200,000, depending upon the analysis cited. The 41,000 figure is likely on the low end, says Dr. William Hersh, one of the researchers involved. “That data is probably an understatement—it looked mainly at hospitals,” says Hersh, who chairs the Department of Medical Informatics & Clinical Epidemiology at Oregon Health & Science University.

At the moment, though, many health care leaders are in a holding pattern, waiting for the outcome of health care reform, as well as the finalization of key health IT regulations and related grant funds, industry watchers say. In late August, Vice President Joe Biden announced the distribution of nearly $1.2 billion in grants to assist hospitals. The funds won’t start being distributed until October. “Everybody is hunkered down right now,” says John Stevenson, a Dallas-based IT executive consultant and a past president of the Society for Information Management, an IT professional organization.

But once hiring starts, likely by early 2010, watch out, says Walt Zywiak, a principal researcher for Computer Sciences Corp.’s Healthcare Group, based in Falls Church, Virginia. Zywiak was among those who predicted that talented IT employees, including systems administrators, database engineers and security architects, will be recruited from other industries.

“When it [the hiring] does happen, I think there is going to be a tremendous shortage of people,” Zywiak says. “There will be a tremendous competition to get staff out there to install systems.”

Projecting a squeeze
A hiring frenzy may seem more like a mirage now, given that many IT employees have been sidelined by the recession. IT unemployment can be difficult to track, given that positions fall across a number of job categories as characterized by the Bureau of Labor Statistics. But a recent analysis of second-quarter data by Information Security Media Group, a publisher, found that unemployment across a range of IT professional jobs had reached an annualized rate of 4.1 percent. That may sound low, compared with unemployment overall, but for IT, it’s the highest figure in at least five years.

And IT leaders don’t yet appear to be in much of a hiring mood. Just 8 percent reported plans to add staff and 85 percent reported maintaining current levels, according to a spring survey of more than 1,400 chief information officers by Menlo Park, California-based staffing firm Robert Half Technology.

Nor are health care jobs immune to layoffs. In mid-August, officials at Kaiser Permanente announced that roughly 1,850 jobs in California (out of 135,000 employees) would be eliminated.

But the long-term IT staffing forecast has been bullish, even prior to the $19 billion commitment under the American Recovery and Reinvestment Act. In the spring, officials at the U.S. Bureau of Labor Statistics predicted that the demand for network systems and data communications analysts would increase by 53 percent from 2006 to 2016 and other technology jobs, including information-research scientists and database administrators, by at least 20 percent.

Initiatives by the Obama administration are projected to boost IT-related federal spending—with a particular focus on health care, energy and green building projects— from $76 billion in 2009 to $90 billion by 2014, according to Input, a Reston, Virginia-based research firm.

Meanwhile, the federal stimulus bill includes both carrots and sticks. Hospitals and physician practices that achieve meaningful use of their electronic health records can reap financial incentives starting in 2011. The term “meaningful use” is still being defined, but for those who don’t make the grade, reductions in Medicare reimbursements begin in 2015.

Just 1.5 percent of hospitals have a comprehensive electronic records system, and an additional 7.6 percent have implemented a system in at least one unit, according to a New England Journal of Medicine study published this year. “To this point, the health industry is basically the backwater of IT technology,” says Tom Pettibone, founder and managing partner at Transition Partners, an IT management consulting firm.

Still, Pettibone senses some reluctance from hospital leaders, who already are financially stretched by the economic downturn. He says they tend to say, “ ‘Look, if I get a few dollars, I need it for beds. I don’t need it for electronic health records.’ ’’

Hiring and poaching
In the Denver area, physician practices and other health care organizations started computerizing medical records several years ago, and so Denver may serve as one harbinger of the staffing challenges organizations will face, says Shannon Salter, a Denver-based information technology practice manager for Hudson IT, a recruiting and consulting firm.

There’s definitely been poaching, she says: “We’ve seen a lot of health care clients recently taking top talent in the IT field out here from other industries.”

Nationally, Zywiak predicts that two primary tech groups will be in high demand: people who can install systems and those who can troubleshoot, forming a bridge between clinicians and tech experts in resolving workflow problems and other implementation challenges.

Security architects and other related specialists also will be hot commodities, given the inherent privacy concerns involved with storing and sharing personal medical data across large hospital systems or even regional networks, says Kurt Roemer, chief security strategist at Fort Lauderdale, Florida-based Citrix Systems. For similar reasons, technologists who specialize in cloud computing—storing vast quantities of information over the Internet rather than on individual servers—will likely find numerous health-related employment opportunities, he says.

Employers in non-health industries typically hold one advantage, say Zywiak and several others interviewed. Health IT salaries, particularly at hospitals, tend to be on the lower end compared with other industries, such as financial services. Salter says the difference is not substantial—roughly 5 percent lower than other types of IT jobs— and can be offset by non-salary perks, such as good health insurance and generous time off.

But any pay discrepancies likely will fade away once hiring heats up, says Marty Witrak, who chairs the workforce subgroup of the National Rural HIT Coalition, a cross section of rural health professionals and other interested parties.

“If hospitals are in jeopardy of losing their Medicare and Medicaid payments, they will find ways to pay people a competitive wage to get them to come and work for them,” she says. “They will have to.”

At Hudson’s Denver office, Salter can attest to that ripple effect. In the last six months, Hudson has been approached by several human resources specialists outside health care, she says. They wanted more information about local salary scales to keep their IT specialists from straying.

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