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The Morning Call

Hiring easier in computer technology
With a softening economy, more workers are available and willing to work for lower pay.

04/08/01

By JULIE BENNETT
Of The Chicago Tribune

Technology hiring has undergone a sea change. Just a few months ago employers complained about a drought of information technology candidates. Now, in the aftermath of dot-com failures and corporate layoffs, the marketplace is flooded with unemployed technology workers.


"It's very much an employer's market," said Ilya Talman, president of Roy Talman & Associates, a Chicago recruiting firm that specializes in information technology. In Atlanta, Brett Stevens, president of IT recruiting firm SearchLogix Group said, "Just a little while ago we couldn't get IT workers to talk to us. Now they're bombarding our office with phone calls."


Finding talent in this climate is "tons easier," said Rob Williams, chief architect for ClickAction, a Los Angeles software company. Williams, who has been hiring computer programmers regularly since last July, said his last recruiting round was "unbelievable. We're hiring people we couldn't have come near a year ago. Many Internet firms have collapsed in the last three months and a lot of other companies are folding. A few months ago we had standing orders with four or five recruiting companies and we'd take anyone who'd consider a full time job. Now most of our hires are coming in through referrals from other employees."


The make-up of ClickAction's work force is also changing. To acquire the hottest skills before, Williams often had to resort to computer cowboys, independent contractors who commanded wages of $75 to $125 an hour.


"Now I'm telling recruiters not to send me any contractors," he said. "I'm only hiring full-time programmers with six to seven years of experience."


And U.S. passports. When IT employees were scarce, ClickAction and other employers turned to workers from other countries who are here with H-1B visas -- special visas that allow foreign workers with special skills to work in the United States for a limited time. The number of such visas are regulated by Congress.


"It's a melting pot," said Williams. "Out of 32 developers, I have programmers from China, India, Russia, France, Vietnam, Korea and Australia."


But, Williams said, filing paperwork on all those visas is a hassle and though workers are plentiful, ClickAction's new hires will be U.S. citizens. While some employers contacted say they will continue to hire H-1B's, others, like Williams, now plan to seek workers without visa restrictions.


The pay scale for technical workers has also shifted in the employer's favor.


When the market was tight, dot-com and professional services companies like Internet consulting firms "paid people more than they were worth," Williams said. Now candidates have more realistic expectations.


New ClickAction employee Amy McLaughlin, for example, used to work for Internet high-flyer Razorfish. Today, the Java developer said she's earning less and was just glad to find a job in her field.


"Employers are definitely hiring for less money," said recruiter Stevens.


Sign-on bonuses are gone and public companies are reducing the stock options they offer.


"A year ago, companies were luring in technical workers with car allowances of $500 to $700 a month," Stevens said. "Now those have been reduced or have disappeared."


"Job market changes have given individuals a reality check on what they can command," said Steve Colbourn, products market unit director of recruiting for Accenture.


The Chicago-based consulting company will hire about 4,000 technical people this year, Colbourn said, including new recent college graduates. Last year, many top graduates shunned traditional consulting companies like Accenture for dreams of making it big in the land of dot-com opportunity. This spring, grads are returning to traditional organizations with track records of success, he said.


All employers aren't sharing in the bounty, however, because many of them can't afford to hire new employees, even at low-tide prices, a situation that is dramatically affecting the nation's $8.3 billion recruiting industry.


"Three of our top clients are on hiring freezes," said Stevens. "We even had one company that paid us upfront for a retained search, then couldn't afford to take on the candidate we found."


First-quarter revenue at SearchLogix is down 30 percent from last year's high, and except for all those calls from laid-off candidates, "it's deathly quiet right now," Stevens said.


AIRS, a Hanover, N.H.-based company that provides Internet recruiting training services, recently surveyed its alumni and found that 73 percent of corporate employers plan to reduce their lists of approved recruiters this year and almost half of all recruiting firms are slashing their staffs and budgets. Companies that are still hiring can often find job candidates on their own.


Andrew Knott, vice president of marketing for White Rock Networks of Dallas, a telecommunications manufacturer, said the market shift has allowed his company to banish recruiters. Last October, Knott said, his company asked current employees for referrals. When employees recommended an engineer friend, they got a chance at a BMW.


"We received 438 referrals that resulted in 198 interviews and 82 hires," Knott said, "saving us over $2 million in recruiting fees." The convertible cost White Rock $37,000 and the campaign was so successful that Knott is ready to try it again.


But other employers, like Chicago-based Bank One Corp., are turning to outside services to help them sort through the new glut of applicants. Michael Rubino, Bank One's vice president of national desktop services, said he's using Directfit, a technical staffing company, to find contract workers.


Directfit, with offices in 17 cities including Chicago, prescreens technical contractors and provides clients like Rubino with online videos of the best candidates.


"I'd never have time to interview all those candidates myself," Rubino said. "Directfit narrows the search process and I can tell by a video clip if someone will be a good fit in our environment."


Despite the newly crowded technical marketplace, all employers cannot count on an easier hiring process, warns Mary Ellen Brantley, an Atlanta leadership consultant and co-author of "Winning the Technology Talent War," with Chris Coleman.


"Unless a company is completely folding, management won't cut their muscle and bone, and will hold onto people with the hottest skills until the very last," Brantley said.


Thus, while there are plenty of midlevel IT workers on the streets, the market is still tight for the hottest skills, like Java 2 Enterprise Edition, C++ and Unix systems administration, said IT recruiter Talman.


"We can find more candidates at the margins, for customer service and entry-level programming jobs," said John Blegen, director of implementations and customer service of Authentify Inc., a provider of e-commerce security software in Chicago. "But it's still challenging to find senior people with encryption experience."


Technical superstars, executives earning more than $150,000 a year in chief information officer and other top positions, are also rare, but they're getting easier to reach.


"In the past, IT managers would be lukewarm to our calls,'' said Jim McSherry, managing partner of the Midwest practice of recruiter Battalia Winston International. "Now executives who are still working in dot-coms realize their visions of grandeur may never come true and they're willing to talk to us."


No matter what the skill level, employers are being more cautious about hiring technical help.


"Last year, if an employer came across a star, they'd hire her, and then find something for her to do," said Umesh Ramakrishnan, vice president of executive search firm Christian & Timbers in Cleveland. "Now they're making sure all hires are winners and have drastically increased their scrutiny, by checking all references and questioning past employers."


Candidates, too, are being more careful. They're asking for more cash upfront instead of waiting for stock options and are wary about joining what Ramakrishnan politely calls "prerevenue companies." This new hiring beachhead was reached, he said, because people on both sides of the hiring equation made a lot of mistakes.


"No one can afford to repeat the mistakes they made last year," Ramakrishnan said.