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INNOVATION
& DESIGN Home Page Architecture Brand Equity Auto Design Game Room SMALLBIZ Smart Answers Success Stories Today's Tip INVESTING Investing: Europe Annual Reports BW 50 S&P Picks & Pans Stock Screeners Free S&P Stock Report SCOREBOARDS Hot Growth 100 Mutual Funds Info Tech 100 S&P 500 B-SCHOOLS Undergrad Programs MBA Blogs MBA Profiles MBA Rankings Who's Hiring Grads | | SEPTEMBER 1, 2000 MANAGEMENT Tech Labor Crunch? This Company Has a Do-It-Itself Solution When Terasys couldn't find enough skilled help, it trained its own
His program, called TeraTRAIN, is a two-month boot camp for nontechnical workers who want to move into specialized IT jobs. When they complete the program, they're guaranteed a job either at Terasys or one of its client companies, which pay $5,000 to defray training expenses. Students like Lance Courtley and Michelle Swann, former riverboat-casino employees, have been studying everything from soft skills like customer service to the nuts and bolts -- literally -- of computers. Other trainees have included a former nursing assistant, a grocery store clerk, a biologist, and a legal secretary. WORSENING SHORTAGE. These days, all employers are struggling to fill available openings, whether it's for entry-level workers or marketing execs. However, the need in the high-tech field is particularly acute. The Information Technology Association of America (ITAA), a trade group, says more than half the 1.6 million IT jobs created this year will go unfilled. Worse, analysts predict that demand will only intensify as traditional brick-and-mortar businesses make the high-tech leap, upgrading computer-based operations and expanding onto the Web. And small employers, those with less than 100 people, are getting squeezed hardest. "Five years ago, we began to feel the pinch," Sutton says. "We were spending hundreds of thousands of dollars on recruitment, and we thought: 'What if we could redirect those funds?'" While only a finite number of employees have three to five years of IT experience, he reasoned that there were plenty of people with that much general business experience. TeraTRAIN, he explains, is designed to "overlay a technical background" on the knowledge these people already have. Not only has the program provided a steady stream of trained employees, but it's been a bargain. Before TeraTRAIN, Sutton says the company spent about $10,000 to recruit each new employee. Now it's only $1000 -- the cost of putting someone through the program. In return for intensive free training, TeraTRAIN's grads agree to work for Terasys at a $25,000 starting salary. While that may be a bargain for Terasys, employees can move up the ladder fairly quickly, with $10,000 pay increases for each software certification an employee acquires. About a third of the trainees drop out early, but since 1997, more than 500 people -- mostly midcareer workers -- have graduated from TeraTRAIN. That's far more than Sutton needs to keep his 10-year-old, 125-employee company's staff replenished and growing. GRADS GENERATE GROWTH. Hence, TeraTRAIN has expanded its horizons, training workers not only for its own use but for its client companies and other area employers as well. About 70% of its grads end up employed at other companies, and often, those companies become clients, too, if they aren't already. Sutton estimates that these connections have helped boost his business by 30%. Now, TeraTRAIN boasts eight classrooms, which take up about half the available space at Terasys' Silicon Prairie headquarters near Chicago. The program now graduates about 400 students a year. At Web marketing software developer Visual Technologies, also in Naperville, finding enough trained people has been the biggest challenge to growth. Spun off from Lucent Technologies in 1999, the 70-employee company has been expanding at a rate of five new positions monthly. So far, Dallas Van Slyke, technical support manager, says he has hired one employee from TeraTRAIN's program and would use the service again. In fact, TeraTRAIN has proven such a hit that Terasys' board of directors is discussing whether to spin it off as a separate business. But for now, the plan is expansion. Late last year, the company opened a branch in Sydney, Australia, as part of a strategy to develop a Pacific Rim beachhead. The IT labor shortage is critical there as well, so the program has helped simultaneously build up a workforce while developing new Terasys clients in a fast-growing market. Plans are also under way to develop an online version of the TeraTRAIN curriculum, since the program turns down 80% of its applicants due to space limitations. Also in the works: affiliations with schools to offer college credit. DROP IN THE OCEAN. But despite TeraTRAIN's success, it's simply too small scale to address the intense crunch, where workers are needed not by the hundreds but the hundreds of thousands. "There's no silver bullet," concedes ITAA President Harris Miller. He also points out that the Terasys model is rare: "IT companies are not educators. It's hard to take someone whose last math course was in eighth grade and turn them into a programmer." Miller adds that the problem has to be solved at the high school level: "If you run more ads and go to more job fairs, it doesn't solve the problem.... Education and training are critical." To that end, Terasys developed a program called TeraU, which is aimed at middle and high school students. And in a few years, when the IT crunch gets even tighter, a few students may even sign on with the company. Meantime, TeraTRAIN should keep the company well supplied with employees -- with one notable exception. The receptionists at Terasys never seem to last. Take the most recent one, Alivia Hunter, who just moved across the hall to join Class 2000-I. After talking to co-workers who had been through the program, Hunter was inspired to give it a try herself. "I don't think I'll ever have a problem getting a job" she says. With nearly 850,000 job openings, the odds are certainly in her favor.With nearly 850,000 information technology job openings in the U.S. expected to go unfilled this year, one company decided to take matters into its own hands. If you can't find 'em, make 'em, figured Greg Sutton, CEO of Terasys, a $10 million IT consulting company based in Naperville, Ill. His program, called TeraTRAIN, is a two-month boot camp for nontechnical workers who want to move into specialized IT jobs. When they complete the program, they're guaranteed a job either at Terasys or one of its client companies, which pay $5,000 to defray training expenses. Students like Lance Courtley and Michelle Swann, former riverboat-casino employees, have been studying everything from soft skills like customer service to the nuts and bolts -- literally -- of computers. Other trainees have included a former nursing assistant, a grocery store clerk, a biologist, and a legal secretary. WORSENING SHORTAGE. These days, all employers are struggling to fill available openings, whether it's for entry-level workers or marketing execs. However, the need in the high-tech field is particularly acute. The Information Technology Association of America (ITAA), a trade group, says more than half the 1.6 million IT jobs created this year will go unfilled. Worse, analysts predict that demand will only intensify as traditional brick-and-mortar businesses make the high-tech leap, upgrading computer-based operations and expanding onto the Web. And small employers, those with less than 100 people, are getting squeezed hardest. "Five years ago, we began to feel the pinch," Sutton says. "We were spending hundreds of thousands of dollars on recruitment, and we thought: 'What if we could redirect those funds?'" While only a finite number of employees have three to five years of IT experience, he reasoned that there were plenty of people with that much general business experience. TeraTRAIN, he explains, is designed to "overlay a technical background" on the knowledge these people already have. Not only has the program provided a steady stream of trained employees, but it's been a bargain. Before TeraTRAIN, Sutton says the company spent about $10,000 to recruit each new employee. Now it's only $1000 -- the cost of putting someone through the program. In return for intensive free training, TeraTRAIN's grads agree to work for Terasys at a $25,000 starting salary. While that may be a bargain for Terasys, employees can move up the ladder fairly quickly, with $10,000 pay increases for each software certification an employee acquires. About a third of the trainees drop out early, but since 1997, more than 500 people -- mostly midcareer workers -- have graduated from TeraTRAIN. That's far more than Sutton needs to keep his 10-year-old, 125-employee company's staff replenished and growing. GRADS GENERATE GROWTH. Hence, TeraTRAIN has expanded its horizons, training workers not only for its own use but for its client companies and other area employers as well. About 70% of its grads end up employed at other companies, and often, those companies become clients, too, if they aren't already. Sutton estimates that these connections have helped boost his business by 30%. Now, TeraTRAIN boasts eight classrooms, which take up about half the available space at Terasys' Silicon Prairie headquarters near Chicago. The program now graduates about 400 students a year. At Web marketing software developer Visual Technologies, also in Naperville, finding enough trained people has been the biggest challenge to growth. Spun off from Lucent Technologies in 1999, the 70-employee company has been expanding at a rate of five new positions monthly. So far, Dallas Van Slyke, technical support manager, says he has hired one employee from TeraTRAIN's program and would use the service again. In fact, TeraTRAIN has proven such a hit that Terasys' board of directors is discussing whether to spin it off as a separate business. But for now, the plan is expansion. Late last year, the company opened a branch in Sydney, Australia, as part of a strategy to develop a Pacific Rim beachhead. The IT labor shortage is critical there as well, so the program has helped simultaneously build up a workforce while developing new Terasys clients in a fast-growing market. Plans are also under way to develop an online version of the TeraTRAIN curriculum, since the program turns down 80% of its applicants due to space limitations. Also in the works: affiliations with schools to offer college credit. DROP IN THE OCEAN. But despite TeraTRAIN's success, it's simply too small scale to address the intense crunch, where workers are needed not by the hundreds but the hundreds of thousands. "There's no silver bullet," concedes ITAA President Harris Miller. He also points out that the Terasys model is rare: "IT companies are not educators. It's hard to take someone whose last math course was in eighth grade and turn them into a programmer." Miller adds that the problem has to be solved at the high school level: "If you run more ads and go to more job fairs, it doesn't solve the problem.... Education and training are critical." To that end, Terasys developed a program called TeraU, which is aimed at middle and high school students. And in a few years, when the IT crunch gets even tighter, a few students may even sign on with the company. Meantime, TeraTRAIN should keep the company well supplied with employees -- with one notable exception. The receptionists at Terasys never seem to last. Take the most recent one, Alivia Hunter, who just moved across the hall to join Class 2000-I. After talking to co-workers who had been through the program, Hunter was inspired to give it a try herself. "I don't think I'll ever have a problem getting a job" she says. With nearly 850,000 job openings, the odds are certainly in her favor.  By Janet Ginsburg  | | |
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