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Tech Unions Speed Up as Economy Slows Down

Some IT workers looking for job security are turning to unions as employers trim payroll. Will this trend affect the insurance industry?

Like weather, many trends start on the West Coast and travel east. One of the latest fads is the unionization of IT workers. And the trend is gaining steam as a number of corporations tighten their belts in response to the sagging economy.

But will this movement of organized labor in IT reach financial services? At first glance, financial services companies would seem to be good spots for unions. IS support staffers, such as network support and call center reps, work in what are commonly the first areas to be hit with job cuts, and thus are the first to seek the job security many union contracts provide.

In fact at, call center reps began to organize with complaints such as "last-minute mandatory overtime" and concerns about job security as the Seattle-based dot-com began to outsource some call center operations to India.

However, the state of the economy may not drive mass unionization in financial services, says Chuck Johnston, vice president and director, insurance information strategies, at Stamford, CT-based META Group. "I have not seen any concern from insurance management about organized labor," he says. "Microsoft had predatory policies for temp workers. I have not seen anything like that in insurance because the culture is different. Salaries in insurance do not tend to be as high as financial services or technology companies, but the benefits are good." It is a classic case of "high risk, high reward" that separates insurance from some other markets, adds Johnston.

The high-risk culture in technology is what attracts many workers, says Erin Tyson Poh, local representative of the San Francisco-based Northern California Media Workers' Guild. "The culture and the risk, that is how many people perceive themselves in IT," Poh says. "The last two yearshave been a honeymoon for tech workers. But IT is becoming a more bottom line-oriented business."

IT workers from all markets are turning to unions for a variety of reasons, says Gretchen Wilson, organizer at Seattle-based Washington Alli-ance of Technology Workers, known as Wash-Tech. "People are finding themselves with legal issues," Wilson says. "For instance, employment contractsIT—common in some areas of IT—where people have to sign immediately. What does the contract mean?" Workers contacting WashTech include administrative help, call center reps, network staff, technical writers and Java programmers.

However, even with the economic slowdown and some firms cutting staff to reduce costs, IT workers are still in high demand. The number of unfilled IT jobs in the US will increase to 1.2 million this year, says Maria Schafer, program director, executive services, META Group. "I do not see the economic slowdown changing the number, but it is becoming easier to hire the high-skill folks," she says. "The people that were working in dot-coms have been reabsorbed in the larger technology market."

The dot-com shake out, and even the move to unionize some areas of high tech, may be a good thing for insurance carriers. "The first place we are seeing the softening is the technology vendors," as some cut back, adds Schafer. The cutbacks and the organization of some unions in IT may send workers looking for more stable employment, such as at traditional brick-and-mortar companies.

"The really major factor is IT salaries are very high," she notes. "Technology users are still trying to meet the demands of customers. The economy may have slowed, but it is still in an expansion mode as far as IT usage goes."

Greg MacSweeney is editorial director of InformationWeek Financial Services, whose brands include Wall Street & Technology, Bank Systems & Technology, Advanced Trading, and Insurance & Technology. View Full Bio

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