With worker retirements looming, IT starts to prepare for a workforce exodus

With 10,000 U.S. baby boomers turning 65 every day until 2030, the IT industry is among those that must plan how its workforce will be impacted when these employees eventually retire. 

While the tech industry emphasizes the new, legacy system skills are still valued since some companies run critical systems on dated technologies. Even when firms migrate to current IT, workers with older skills are needed to help with the transition and IT professionals who love their industry may want to keeping working after 65, but not necessarily full time.

Companies keen on retaining veteran workers, and their knowledge, are initiating retirement conversations early to increase the likelihood that these employees will stay on in some capacity after they stop working full time, said Matthew Ripaldi, senior vice president at IT staffing firm Modis.

Businesses need to develop a structured plan that explains to employees “how do we retain you because you’re so valuable but at the same time give you the flexibility you need,” he said.

This flexibility can take the form of contract work, which allows employees to stay engaged with IT while allowing them to create their schedule, Ripaldi said.

“The thing about technologists is they love what they do,” he said. “They’re constantly driven by newer technologies. So that means that they want to stay involved somehow. They just may not want to stay involved full time.”

The contractor ratio, already high in tech, will continue to increase as companies allow retiring staff to work part-time hours or hire them for short-term projects, said Ripaldi. Mentoring programs will also expand as these contractors impart legacy system information to younger employees who will be expected to link the new technologies they use to the older applications they’re learning.

“If there’s an upgrade, if there is a new technology, it will be more effective if they understand how the legacy technology works and how their end users were using it,” he said.

The benefits of new technologies may drive companies to phase out legacy systems and replace them with modern platforms, another situation where retirees could serve as consultants to help with the transition, said John Engates, CTO of cloud hosting company Rackspace.

“For some of these baby boomer retirees there maybe an opportunity to start their own consultancy in helping companies get off these older systems and modernize.”

Transitioning from legacy platforms to the cloud, for instance, requires “a whole chain of people, some of who really know the legacy, some who know the modern and people in the middle to help with this transformation,” he said.

For retirees who prefer to stick with the technologies they worked on during their careers, they too will have consulting opportunities, said Engates. Many companies still depend on older systems — and the skills required to maintain them — to run their businesses.

“It’s interesting how we have a handful of really important systems that have held on,” he said. “The mainframe tends to be the one we all point to but I’m sure there’s others out there. We hear about applications that still run on what we call legacy from our standpoint, like an old Windows NT server or an old 1995 machine.”

While these companies are wed to legacy systems, they don’t want to deal with the economic and labor issues tied to maintaining older technologies. Instead, they’ll outsource upkeep to consultants, who may land lucrative contracts if there is enough market demand for their skills.

“It’s probably going to be cost prohibitive or just so hard to find that one guy that knows that technology who’s willing to work on one or two legacy systems,” Engates said.”Your demand goes way up if you’re a consultant that’s managing hundreds of mainframes. They’re still out there.”

At companies that have modernized their systems as technology evolved, retirement may not be as much of an issue since employees learned new skills when the IT changed, avoiding the challenge of transferring knowledge between staffers.

“You need to be proactive on optimizing your ecosystem,” said Verizon Enterprise Solutions CIO Ajay Waghray. “And that forces the retirement of multiple processes and systems that tend to have created that long living complexity that creates all the challenges.”

Last year Waghray retired approximately 160 systems and has so far retired 60 in 2103.

“Even before this whole cloud orientation became a buzz we were already applying those techniques to stay lean and agile,” he said.

Verizon is also proactive in maintaining “a pretty good [employee] progression map, particularly in managerial roles,” helping the company plan for future employment needs, some of which maybe caused by retirement, Waghray said.

“We tend to know if we have a certain group of people that we have a need for, be it retiring or otherwise,” he said.

To fill employment needs, Verizon uses mentoring programs, college recruiting, telecommuting, job sharing and part-time positions.

As for the possibility of retired employees returning as consultants, the demand isn’t there now at Verizon.

“I haven’t really heard the need to say will you come back,” Waghray said. “We might have that in the future but we’ve not seen that.”

At Intel, which is in the early stages of exploring the impact of employee retirements, flexibility extends to helping workers take positions outside the company at nonprofits.

Last year the chip maker launched the Intel Encore Career Fellowship, a pilot program that gives near-retirement employees a US$25,000 stipend and allows them to spend one year applying their skills to new positions with social value. The program is part of a greater effort by nonprofit Encore.org that aims to help retirees use their skills in second careers with social purpose.

“We don’t have the need yet to say with enormous numbers departing how do we retain some skills, how do we retain some of the institutional knowledge,” said Julie Wirt, the company’s global retirement design manager. “We’re just starting now to sit down and think about how we’re going to approach that. In five years we’ll be in a different situation.”

As employees near retirement they question whether to update their skills or consider other ways to use their IT backgrounds.

“At a certain point they say ‘It’s probably time for me to reskill again. Do I want to do that or do I want to think about something new as I’m kind of on the brink of retirement,'” said Wirt.

The Encore program paired Ken Wolff, a 23-year Intel employee with Music for Minors, which provides music education programs to elementary school children in the San Francisco Bay area. At the nonprofit, Wolff, who retired from the company in June of last year, works on projects that combine his tech background and love for music. He studied early music at a European conservatory and holds a master’s degree in church music.

Wolff’s first project took him a year to complete, working five or six half days each week, and involved putting hundreds of music and training documents online, he wrote in an email. He continues to volunteer at Music for Minor and his current project involves shooting training lessons for teachers and posting them online.

“Most of my IT work doesn’t directly apply but the basic orientation makes solving software tool challenges a lot easier,” wrote Wolff, 60. His background helped when converting sheet music into digital files using high-end scoring software, he wrote. Additionally, shooting and editing video is easier with a technical background and having website development skills helps when posting material online.

Intel is using the fellowship program to understand how to discuss retirement with employees and their needs. Additionally, the program helps people who lack clear retirement plans start thinking about what they may want to do next.

“Many employees [at Intel] want to stay engaged in some manner past normal retirement, but they’re looking to do that in a different way,” said Writ.

Jose Alvarado planned to work part-time work as an instructor or IT professional after he left Hewlett-Packard where he worked as a senior software engineer, he said in an email.

Through the Encore program, which HP participates in, and his own efforts, Alvarado is volunteering in both those roles. Alvarado recently began volunteering for 20 hours per week at the Homeless Prenatal Project, which provides poor and homeless San Francisco families with resources to improve their lives. In September he will start teaching a data networks course at the University of the People, a nonprofit that offers free academic courses online.

In both roles, Alvarado draws on his enterprise IT career, which spanned nearly 23 years at HP. His background in data networks as a software engineer has proved useful at HPP and UofP, he wrote. HPP has a medium-size computer network and uses cloud services. “I am also learning quite a lot as a member of the HPP Technology Team. Additionally, I have used my knowledge in network security to perform vulnerability testing on HPP public internet interfaces.”

His transition into volunteer work has been gratifying.

“The idea of a second act for the greater good just sounded perfect for me after leaving HP,” he wrote. “I see my fellowship as both an interesting/stimulating part-time job and an excellent opportunity to help HPP’s wonderful mission.”