Demand for tech workers drives up pay, perks
MINNEAPOLIS -- An advertisement in the current issue of City
Pages features a long-haired, mustachioed man dressed in black under
the headline ''Byte Hog.''
The 28-year-old's favorite non-alcoholic beverage is green Tabasco
sauce, and he remembers ''watching 20,000 Brits in a stadium doing a
sing-a-long with the Sex Pistols.''
The punk rock group's lawless message, with lyrics such as ''I wanna
be anarchy, it's the only way to be,'' apparently didn't take hold. The
man in the advertisement is a computer systems integrator working for
the country's largest legal information publisher, West Group, which is
searching high and low for technology employees.
The message the Eagan, Minn.-based company is trying to send?
''West is a cool place to work. We have cool people, we're not just a
bunch of lawyers writing books,'' said Michael Wilens, West's
executive vice president and chief technology officer.
As Minnesota enjoys all-time low unemployment, handily beating the
national average, the squeeze on companies to find information
technology workers has led to sky-rocketing salaries and human
resources managers scrambling to find innovative ways to recruit and
retain employees with scarce skills.
While small, entrepreneurial companies dangle dreams of public stock
offerings, West Coast firms offer the glitz of working on the bleeding
edge in Silicon Valley, and consulting firms can compensate generously,
large Minnesota companies work their own angles.
A large corporation often can offer more training, a larger variety of
challenges, and more resources than a small firm. Also, large
companies offer stability that a consulting firm might not, so that a
person would be able to see a project from inception to completion.
Companies are fighting to stay out of a bidding war that some see as
inevitable.
''You can't win at the numbers game,'' said Gregory Rich, information
technology recruiting manager at Minnetonka-based Cargill Inc. ''A
small firm, if they have to pay an extra $20,000 to keep a person, they
can do that. If we don't have a certain amount of salary equity across
divisions, we could have some problems.''
The extent to which hiring has taken on a mercenarial atmosphere,
however, could be the fault of those large corporations.
''When companies were loyal to their employees, employees were loyal
to their companies,'' said Paul Hawkinson, publisher of The Fordyce
Letter, a recruiting newsletter. ''That's no longer true.''
Workers, particularly in information technology, now look out for
themselves, having learned from the layoffs of the 1980s to look warily
at large corporations.
''Technical people have a much stronger affiliation with their
profession
than their company,'' said Tim Walsh, vice president of research for
Blessing/White, a human resources firm. ''When you ask them what
they do, they'll say 'I'm a systems engineer,' and who they work for is
kind of irrelevant.''
Because of the emphasis technical people put on self-reliance and the
speed with which technology changes, offering training ranks high
when it comes to recruiting technology employees.
''Technical people have this very strong fear of obsolescence, they
always feel that they have to be up to date,'' Walsh said. ''If they
feel
that they are working on a technology that's getting old and they aren't
getting opportunities to hone their skills, they're going to move.''
Of course, that opens up a Catch-22: Train them, and they become
more valuable and attractive to other companies; don't train them and
they'll leave on their own. But large companies know their interest lies
in not getting into a bidding war.
''It's a zero-sum game,'' Wilens said. ''When we do recruiting, we steal
from some local company, and they steal from us.''
Hiring processes have shortened from months to days, with some
companies offering jobs on the spot at job fairs.
''You can't go through this week-long interview process,'' said Eileen
Pinto, Honeywell Incorporated's manager of information systems
human resources development. ''If you get someone in the door and
they're good, you have to be prepared to make that offer right away.''
To make themselves more attractive on a lifestyle basis, companies are
developing flex-time and telecommuter programs that could be
employed company-wide but are being tested first with their technical
employees.
To keep a technical person happy, human resource experts said, a
company must continually offer challenging and cutting-edge
assignments. Every company, however, has its share of ''grunt'' work,
and not all of it can be outsourced.
Sometimes a person might start out in, say, technical support, answering
questions from both inside and outside of the company on how a
program works. After six months, however, that person might be
proficient enough to develop applications, an area which tends to be
more glamorous and have greater compensation.
Informal networks among technical people allow word about a
company to be spread quickly.
''People tend to go to companies in hordes, and they'll leave in
hordes,''
Walsh said.
In 1996, three out of five software companies increased their work
force an average of 42 percent, while only one in 10 decreased in size
by an average of 26 percent, according to a survey by accounting firm
Coopers & Lybrand.
Overall salaries in the software industry rose 6.5 percent in 1996,
compared with a 4 percent increase in the overall work force, the
survey showed. Colleges and universities are not keeping up with
demand.
The U.S. Labor Department estimates that job openings and
replacements will demand 95,000 new information technology workers
every year until 2005. However, in 1994, the latest year for which
statistics were available, only 24,553 students earned bachelor's
degrees in computer and information sciences, and the growth trend
had been relatively flat.
In 1996, only 921 doctorate degrees in computer science were awarded
by U.S. universities, according to the National Science Foundation, and
that was a 7.6 percent decline from 1995.
''Companies are shutting down projects, they are just unable to staff
things they have in their plans that have to do with being
competitive,''
Walsh said. ''Companies have strategies, and they just can't execute it
with the people they have.''
Traditional recruiting tools such as job fairs and newspaper
advertisements are inadequate, while Internet-based advertising has
been only marginally successful. Employee referral programs have
become popular, with companies even offering vacations to Florida to
employees who find technical recruits. Headhunter firms can be
expensive, charging from 20 to 30 percent of a hire's first-year salary,
and their tactics can be extreme.
''I've heard of guys stealing fishbowls full of business cards out of
restaurants,'' said Rich, who had been with a recruiting firm before
going to Cargill. ''They're getting ahold of employee directories and
pounding through them to find folks.''
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