06:06 PM

Back Up Your Reserves

With war looming, CIOs will have to help their companies manage through employee shortages.

Despite the planned resumption this week of U.N. weapons inspections in Iraq, prospects for a war-and a huge call-up of reservists and National Guard troops-remain very real. As many as half a million of the country's 1.3 million reservists may be activated, according to sources in the federal government, and Air Force reserve personnel will be serving longer, two years instead of one. The call to duty could take its toll on some CIOs, who may lose key personnel on critical projects at a time when many IT departments are already doing more with less. Yet there's a chance for business-technology leaders to be heroes of a different kind, by putting in place the software and processes that can help their companies better cope with sudden employee departures.

CIOs at companies that have suffered significant layoffs in recent months are taking note of activation plans. Garrett Grainger, CIO at writing-utensils manufacturer Dixon Ticonderoga Co., which has shed 20% of its IT staff because of the poor economy, says he's fortunate that none of his technology employees is an active reservist. "I'd be in deep stuff" if they were, he says. A study released last week by outplacement firm Challenger, Gray & Christmas Inc. says that even the call-up of a single employee can severely disrupt operations in companies that are already short-staffed because of downsizing.

Relatively few businesses have felt a significant pinch from activations so far, even after the call-up in June of 85,000 reservists, the most in a single month since last year's terrorist attacks. The piecemeal approach to call-ups that the government has employed over the last year may have some business-technology executives assuming they'll be able to fill a few unexpected holes caused by further activation of troops by divvying up responsibilities among remaining staff. United States Steel Corp. CIO Gene Trudell says he only recently inquired into how many of his 500-person IT staff are in the reserves-it's less than than 1%-and notes that absences because of call-ups so far have been insignificant to the IT operation. Trudell's biggest concern would be retraining returning software-support staff on possible code changes by vendors.


Call-ups affect less than 1% of U.S. Steel's IT staff, CIO Trudell says.
But Circuit City Stores Inc. has learned from experience how call-ups can disrupt important projects. The electronics retailer had to identify a new IT project team leader when U.S. Marine Corps reservist Master Sgt. Roy Jordan was called for active service a little less than a year ago. Jordan, who was two days into his annual two-week training stint on Sept. 11, 2001, also was transitioning at work to lead an eight-person team responsible for maintaining warranty-tracking software and integrating it with a third-party application. "We were hoping it would be for three months or something," he says, "but I was activated for a year."

Some CIOs say changes in staffing in the last few years have put them in a good position to manage through a potential war. Automotive-parts and building-controls supplier Johnson Controls Inc., which employs about 1,000 IT professionals, has reduced its reliance on outsourced workers to save costs, but CIO Sam Valanju says the company could quickly fill any gaps because of the relationships it still maintains with services vendors. And the presence of more women on Valanju's staff in recent years also helps, he says, since proportionately fewer women join the military. "Whatever happens, it should be manageable," he says.

Not every IT executive should assume there won't be immediate and pressing concerns, says Bob Hollingsworth, a retired Marine Corps major general and executive director of Employer Support of the Guard and Reserve, a private nonprofit organization that helps employers and working reservists deal with call-ups. There has been a huge increase in the use of National Guard members and reservists since 1992-they worked 13 million cumulative days last year, compared with the 1 million cumulative days just before the Gulf War, Hollingsworth says. Defense- and security-related industries, as well as government agencies, traditionally have the greatest concentration of employees who are reserve and National Guard members. They're likely to feel the most pain from a large call-up, Challenger Gray CEO John Challenger says.

Defense contractor and systems integrator Northrop Grumman Corp. expects to face some challenges, CIO Tom Shelman says. The number of reservists on the 3,500-person IT staff is small, but Shelman notes that one who's been activated manages 200 people. "That's a point of pressure," he says. "If a manager's doing a good job, certainly this is going to be a disruption."

To avoid disruptions, Oracle customers, particularly those in the federal government, are starting to use its human-resources software to collect or cull through data to find out who their reservists are and to determine how they can redeploy people to manage staff shortages, says Deepjot Chhabra, VP of global human-resources management systems development at Oracle. "It's more prominent now [because] of recent events," he says.

PeopleSoft, SAP, and other vendors also include HR apps as part of their enterprise suites that can help companies manage workforce reductions, no matter what the cause. The recent economic belt-tightening, with attendant layoffs and hiring freezes, has prompted PeopleSoft to refocus its HR products to help companies make the most of existing resources. Products due next month, such as PeopleSoft's Enterprise Learning Management Application, which is designed to let companies deliver training programs where they're needed, will help. Additionally, the vendor's Workforce Planning software lets companies assess skills gaps and realign staff via training, contract workers, or new hires. Smaller vendors such as Workbrain Inc. and Kronos Inc. also have human-capital management apps that track staff skills.

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