The worldwide shortage of information technology talent, expected to last for years and affect all skill levels, has hit the banking industry hard, forcing institutions to plot new recruitment and retention strategies.
"Thirteen years ago in Silicon Valley there was a shortage of talent," said David Foote, managing partner at Cromwell Foote Partners in Stamford, Conn. "All that has now come true for the general world population."
A survey of senior financial institution technology executives by Richmond Events Inc., organizers of the CIO Forum for Financial Services, found that 72% were having problems finding technical expertise in some areas. Only 4% said they have remained unaffected by the short supply.
Though enrollment in computer science has increased over the last two years, these courses suffer high rates of attrition, according to Avron Barr, co-director of the Stanford Computer Industry Project.
"People will be drawn into software training for the money-but that doesn't mean they're talented," Mr. Barr said.
"Schools do not teach it well," he added. "They have neither the staff nor the resources to do hands-on training. Students end up not being trained in what the industry needs."
Edward Goldberg, executive vice president of operations services and technology at Merrill Lynch & Co., said his company has had to adjust to this phenomenon. "You have to look at the school system because we're not turning out computer scientists like we used to."
Merrill's global reach is helping it overcome the problem. It hires local people in all the countries in which it does business, sends them to New York for training in technology and business, then sends them back to work in their regions.
Mr. Goldberg said, "We have had to relax the rules" on experience required. "In the old days, if someone had more than three jobs, you became suspicious. Now we want people with lots of experience in new technologies."
BankBoston Corp. is also tapping the global work force in its struggle to find programmers for an AS/400 legacy system. With an increasing number of technologists interested in working with newer client/server technology, the AS/400 is not something "people are going head over heels to run," said Darnell Straker, senior manager of international technology and operations at BankBoston.
Two years ago BankBoston hired a company in India to handle programming for certain projects. Bangalore-based Infosys Technologies Ltd. helped the bank fill the gaps left when positions had been open for months, even years.
"They had resources we couldn't get in the United States," Mr. Straker said. "We found them to be disciplined and knowledgeable."
BankBoston sends specifications to Infosys, which does the coding in India. The bank receives the code back with few errors, Mr. Straker said. "The programming itself is cheaper, but we have to spend time outlining and specifying exactly what we need."
He added, "Costs were not the driving factor" in deciding to send the work overseas. "It was getting the resources to do our work."
First Union Corp. is addressing the talent shortage by beefing up its information technology recruitment staff. The bank, which employs 2,600 technologists, has 14 full-time technology recruiters, up from only two in May 1997. It expects to have 20 by yearend.
"We have more openings than we can fill," said Brenda Anderson, vice president of the Charlotte., N.C., banking company's human resources information technology services division. She said 40% of open positions are in programming or systems management, and 20% are for senior project managers.
"We have definitely recognized the importance of the recruitment process in helping us be successful in our other objectives," Ms. Anderson.
The most successful method has been employee referrals, said Ms. Anderson, accounting for 30% of current hires. First Union aims to double that in 1999.
Employees making referrals receive a bonus based on the type of position being filled. Technology employee referrals yield "above the corporate average," Ms. Anderson said.
The human resources division approaches technology recruitment like a marketing campaign. It is rolling out a new compensation plan Oct. 1. First Union offers signing bonuses for people with "hot skills" and premium pay to people who can handle highly specialized projects. It also emphasizes a competitive relocation package and flexibility through telecommuting.
First Union is exploring new avenues of recruitment, including a partnership with a consulting company, Nteli Corp. of Dallas, to help it recruit domestically and overseas.
For the past four years First Union has put college graduates it hires through a three-month curriculum called Ready Talent. They are introduced to a broad range of technical competencies and taught about the business functions of the bank.
Partnerships with universities are a viable approach, said Mr. Barr of the Stanford project. In one example, Computer Associates International Inc. of Islandia, N.Y., sends staff to teach, develop curricula, and run internships at State University of New York at Stony Brook. The joint computer science program is expected to double the number of graduates earning computer science degrees at the university.
"I wouldn't be surprised if financial services companies adopted the same approach," Mr. Barr said.
This summer Wells Fargo Bank formed an educational partnership with the University of Phoenix to provide information technology courses customized for Wells employees.
The six-month courses, taught at campuses in Phoenix and California, earn the employees continuing education credits. Course content includes programming languages, operating systems, network technology, data base management, project management, designing and building new and legacy systems, and security and encryption.
In June, Canadian Imperial Bank of Commerce launched an initiative to train 700 college students to identify and report potential year-2000 problems among the bank's more than 15,000 small-business borrowers.
To prepare for the reviews, students undergo a two-week training program with a consulting firm. Students do not need formal training in computers - just a general interest in and knowledge of technology.
John Beran, chief information officer of Comerica Bank, said, "Not only have we gone to the colleges, but also to the high schools, to find bright students and to train them."
Like First Union, First Chicago NBD Corp. has revamped its employee referral program in its search for technology workers.
"We do pretty much everything to find people," said Pam Kruse, assistant vice president and senior technology recruiter for First Chicago. "But we know we have to move quickly."
The bank has 2,700 systems people in its technical center in Chicago and expects twice as many after its merger with Banc One Corp. is complete.
Few if any of the information technology staff members will lose their jobs in the pending merger, Ms. Kruse said. She predicted this trend would last at least five years.
The Chicago-based bank points to its ranking for the past four years on ComputerWorld's list of the 100 Best Places to Work in Information Systems. With policies that include flexible hours, First Chicago also earned a place on Working Mother magazine's list of Best Companies for Working Mothers. Women make up nearly two-thirds of First Chicago's 36,000 employees and more than half of managers.