Last year, dangling five-figure signing bonuses and BMWs in front of IT job candidates was considered business as usual. Now it's all about offering job security.
The demand for IT workers has slowed, and the tables are turning in the IT hiring process. Employers, not IT job candidates, now have the upper hand in negotiations. While last year some employers were desperately tacking $25,000 signing bonuses onto $75,000-salary job offers, "the pendulum has swung the other way," says Bill Coleman, vice president of compensation for Salary.com, which publishes data on compensation trends. Companies now are selling candidates on job stability and growth potential -- not preposterous perks.
The slowing economy and a surge of entry-level workers taking many of the open IT jobs have decreased the demand for IT professionals in the past year by 44 percent, according to a report released in April by the Information Technology Association of America (ITAA), Arlington, Va. Even so, many IT jobs are unfilled, and there are few qualified applicants for these posts: An estimated 425,000 IT jobs are open today, versus 850,000 in 2000.
So companies are getting more selective in their hiring, looking mainly for talented IT professionals with proven track records, the proper education and certification, and strong experience in key areas such as programming, database administration, network management and systems administration. But unlike in the recent past, they are hiring slowly.
Take Cisco Systems, which earlier this year laid off 8,500 workers, 2,500 of whom were temporary and contract employees. "We were hiring as many as 5,000 employees [mostly in IT] per quarter in 1999. And we still are hiring now, but at a much slower rate, less than 1,000 per quarter," says Mark Jennings, an IT recruiter for Cisco.
As companies scale back technological expansion and even lay off workers to lower their overhead costs, it's getting tougher for job candidates to find positions that offer both interesting work and a modicum of stability, never mind the flashy perks. "People who are out of work will likely be able to find a job," says Brett Walker, vice president of marketing at FlipDog.com, which was recently acquired by TMP Worldwide/ Monster.com. "It may take a little longer than it did last year, and they may need to relocate or even change fields, but jobs are still there." (See "The Flip Side: Pounding the Pavement.")
FYI
Information technology (IT) employment currently accounts for approximately 7% of the nation's total workforce.
-- Information Technology Association of America (ITAA, www.itaa.org)
Analysts say the talent pool of experienced IT employees has been in turmoil for some time now, even before the economic shift. From the Y2K crunch, the push to ERP (enterprise resource planning), the drive to e-commerce systems and, most recently, the dot-com downfall, these professionals are finding that there's no fast path to riches anymore. "Many are figuring out which companies are at least somewhat interesting and offer job satisfaction along with much-needed stability," says Phyllis Klees, a principal with Deloitte & Touche's Human Capital Advisory Services, San Jose, Calif.
Companies, meanwhile, want candidates who are better prepared for their interviews than the previous wave, who could snag a big job despite attitude, torn jeans and Birkenstocks. Polished shoes, business attire and upgraded résumés are back. "One good aspect to the economic downturn is I don't need to make ridiculous offers to job seekers," says Vivek Wadhwa, CEO and founder of Relativity Technologies, a Cary, N.C., software maker. Just a year ago, Wadhwa offered some prospective job candidates up to 10,000 shares of stock and thousands of dollars in bonuses. He doesn't have to do that anymore. Wadhwa is still hiring as many as 10 employees per month, mostly in IT, but it's a lot less costly now. Using traditional recruiters in previous years, his company paid up to $20,000 for each employee hired. Now Relativity has a full-time recruiter who cruises the Internet, including job sites, and the average cost per new hire has dropped to less than $2,000.
Companies also are finding they can fill vacant positions with more experienced workers these days. Shelley Godwin, recruiting manager for Nimble Technology, a Seattle-based middleware company, says that, though her company took a risk hiring less-qualified personnel last year because of the shortage of IT talent, now it has many qualified candidates.
Cisco's Jennings says he searches primarily for executive-level candidates with leadership experience, using the Internet to uncover prospects who aren't actively posting their résumés online. He doesn't use online job boards. Instead, Jennings has been trained by Advanced Internet Recruitment Strategies (AIRS), one of the largest providers of Internet recruitment-training services. Jennings uses AIRS' advanced online search tools and strategies for finding these so-called passive candidates on the Internet. Passive job candidates are those who are already employed but may be open to job offers if the right opportunity comes along.
Even with the Internet as a search tool for recruiting potential hires, employers still need strong communication skills, especially when it comes time for the interview, Jennings says. "You need to know how to listen, how to persuade, how to ask intelligent questions and how to probe for answers -- and, when it's time, walk away" during an interview, he adds.
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