Labor shortage makes Yr 2000 problem costly to fix
By Ruth Morris
NEW YORK, Jan 23 (Reuters) - A dearth of workers available to tackle the Year 2000 computer glitch will push costs for fixing the problem higher as the clock ticks toward the new millennium, experts say.
As companies roll up their sleeves and dive into the tasks of finding and correcting computer code, concern is mounting that the work force needed to handle the problem is becoming harder to come by, and harder to retain.
One measure of the shortage is that city newspapers now bulge with page upon page of want-ads looking for technology experts. While not all those ads correspond to the millennium bug, they often pull from the same labor pool.
''Just the IT (information technology) section alone in Sunday's Washington Post had 84 pages of ads,'' said Mark Uncapher, an advisor to the Information Technology Association of America. ''That was as thick as I've ever seen it.''
Uncapher noted that much of the work involved in fixing the millennium bug is time-consuming, thankless labor, and that freshly-trained staff might be tempted away.
The Year 2000 bug, or ''Y2K'' problem, refers to a long-standing programming technique that records the year using only the last two digits of the number, with the prefix ''19'' presumed. As a result, many date-sensitive programs will put a ''19'' in front of the ''00'' that corresponds to the year 2000, misreading the year as 1900.
Unless routed out and corrected, the problem could snag any number of computer transactions, from calculating interest on loans to figuring expiration dates on medical prescriptions.
So marked is the labor shortage to fix the problem that some consultants are issuing guidelines to ensure that Year 2000 staff will stay around to see remediation projects to the end. And most of those measures involve additional expense.
''I would over-compensate the army,'' said George Colony, president of research firm Forrester Research Inc (FORR - news), of the ranks of programmers already toiling to overcome the Year 2000 bug.
Forrester urges companies to orchestrate 'crash course' training programs to reassimilate employees when they've finished their millennium work and to offer project managers the opportunity to earn wages above their expectations.
While some companies have set up in-house training courses to meet their needs, others are relying on ''outsourcers''-- companies that specialize in providing computer services.
''You will not be able to get an outsourcing contract this time next year with a high-level contractor,'' Colony forecast at a recent conference in New York. As a result, outsourcers will be able to demand top dollar for their expertise, he said.
Forrester estimates that service revenue for outsourcers working on the millennium bug will peak at $20 billion in 1999, before dropping back to roughly $15 billion in 2000. That compares with only $12.5 billion in 1997.
Colony also predicted that companies that only begin looking for Year 2000 staff in July or August ''won't get the people.''
And with remediation costs expected to rise, securities experts are looking for Year 2000 expenditures to spill over onto earnings reports.
''It's going to be a defining business issue of 1998 and 1999,'' said Dennis Grabow, chief executive of financial advisory firm Millennium Investment Corp.
Not only do non-compliant companies risk losing customers, they may run into problems raising capital as banks probe more deeply into compliance as a loan requirement.
Grabow said he would look to the banking and securities industries for an early indication of the problem because federal regulators are pushing those sectors to begin testing their corrected systems this year.
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