A downturn comes home to roost

Where has all the training gone…
Where have all the people gone…
Why is the country facing a dearth of technical people?

I keep seeing, that one after another, organizations are squawking about a lack of engineers, or a lack of programmers. Well, hello! Corporate America is waking up to the fact that they laid off 1.5 million IT staff, and have trashed the lives of millions more engineers over the last decade. These companies are finding that there are fewer and fewer people capable of creating the products they need to survive, even if the products are manufactured abroad…

But behind these recent announcements of engineering job mayhem, is the story of the gradual destruction of the side of business that always just seemed expensive and unnecessary to some, that of training their own employees. I guess in these days of job surfing, and limited employment durations, it is fanciful to think that companies should train their own people, after all they can simply go to a recruiting company and hire the people with the skills they need… can't they? Not any longer. With training budgets slashed, and efforts to internally develop employees - not just to fast track MBA's to the executive suite - but to train each successive generation of company employees in the corporate way, there is no educated skills pool anymore. People have the skills they have, they may acquire more skills by hook or by crook (there are an awful number of bold faced lies on a lot of peoples resumes), but they are certainly not being imbued with new skills in the modern corporate workplace.

In the technical arena, where one technology replaces another at a bewildering rate, the lack of training is beginning to hurt two ends of the spectrum; on the one hand smaller, entrepreneurial, bleeding edge software development companies have fewer evangelistic clients willing to sing new software's praises, and at the other end there are fewer people capable of creating the types of technologically sophisticated software that corporations think their products are going to require to be successful. These two issues are not unrelated.

I can't altogether fault companies for laying off IT workers in droves;. 2001 through 2003 were hard years for all of us. However, corporate America has a dirty secret it has been trying to hide for some time: It's been profitable through almost the entire period. The workers were punted, but the bucks still rolled in. When the economy started to recover, rather than bring people back that had been thrown aside, they started to farm work out abroad, and pocket the rest. Corporate America today sits on the largest pile of free cash it has ever had. Corporate America is a net creditor to the world (unlike the US Government). We have spent several years with corporate executives of Fortune 1000 companies gloating over ever bigger corporate bank balances, and executive salaries, while all the same time refusing to extend investment into their own company futures. No training, no skills coaching, just profiteering. Now the hurting really starts.

As the old saying goes Penny wise, Pound foolish. By saving all that extra bottom line and dispensing with all those wasteful technical people, companies have built up large stacks of cash. Unfortunately, cash on its own is good for nothing except burning. Foreign predators, more intent on product development to generate their profits may have made their fortunes more slowly, but they are now strong and positioned to take on the biggest and dullest of Americas corporations. All the talk of not being able to find the skilled workers must place questions in the minds of these predators as to whether when they buy they will keep anything or just rape and pillage for the few remaining gems, and toss the product-less carcasses aside.

Its about to happen. Watch Indian and Chinese companies start to nibble at buying US corporations. Lenovo's purchase of IBM's laptop production may be an MBA textbook example of how to get rid of business you no longer fully comprehend, but its also the way you fritter away decades of good work by competent people all because of inept management and warped vision, with no way of recovering the product development skills or whatever the future might hold. And I can't see laptop sales plummeting any time soon, can you?

Will GE, a paragon of the corporate scene, be foreign owned in 5 years if it can't find the skilled workers and make the new products?