Name That Salary

Dec. 21, 2004
With their skills in demand, IT workers can write their own tickets.

Computer programmers, software designers, and systems analysts are in such demand that for the last two years they have been able to virtually name their own salaries and conditions of employment. "You cannot get enough people who are familiar with PeopleSoft, SAP, and Oracle," asserts Nick Lento, who, as chief operating officer of Select Appointments North America, a professional staffing firm in Wakefield, Mass., is responsible for its worldwide IT staffing. "People who know these high-end, database projects can write their own job tickets." What's more, the demand for such workers isn't likely to lessen anytime soon. "The rapid change in technology is creating a need for IT workers in all industries," says Lento. "There is a need for companies to be more productive in a low-inflation economy." Hard to believe? Then just listen to the lengths some companies will go to either recruit information technology workers or motivate them to stay:

  • Software designer Autodesk Inc., San Rafael, Calif., flew a team of recruiters to San Diego to hire seven workers from a company it had heard was in financial trouble.
  • Viewpoint DataLabs International Inc., Orem, Utah, shares revenues with employees. Workers in its product-technology groups receive no base salary. Instead, they are paid benefits and 26% of the money the company receives from customers who use its 3-D software products.
  • In an effort to compete with the kind of financial incentives that high-tech startups can offer, Sun Microsystems Inc., Palo Alto, Calif., is experimenting with a pilot program that offers key electronic engineers in its microelectronics chip division bonuses (at the end of three years) based on the performance of the division as a whole. The experimental phantom stock plan could mean an extra $20,000 to $30,000 for the engineers who remain at Sun. "We believe it has improved the retention and motivation of key workers," says Connie Russell, Sun's director of compensation and benefits. Other companies are luring the IT professionals they need through perks such as employee lounges with big-screen TVs, wet bars, and fully stocked kitchens, or by letting programmers and designers work wherever they want. An increasing number of firms give current employees who are nontechnical workers aptitude tests and then train them to become entry-level IT professionals. And some firms, such as Trilogy Development Group Inc., Austin, let new hires dream up and work on their own projects for their first three months. Yet, while such programs may entice IT professionals initially, companies must approach retention of IT employees in many different ways, because no single approach will meet the needs of all companies or all IT professionals. "There are no simple or uniform solutions, because the skills each company is looking to obtain vary, as do the opportunities and compensation that a company can offer," says John Rhodes, president of Moran, Stahl & Boyer, the Atlanta-based business-location-consulting subsidiary of Prudential Real Estate and Relocation Solutions. What's more, Rhodes believes that it is imperative that a company first look at what it can offer new and existing employees before it assesses its hiring needs. "Before you begin to chase them [IT professionals] down," says Rhodes, "you have to ask yourself what you have to offer these people. That is, what is your leverage compared with other companies, how progressive is your culture, and what is your image? Equally important, a company must understand what type of career opportunities, lifestyle, and compensation IT workers want." "High-tech IT people want autonomy. They are achievement-oriented and have a high need of recognition," says Peter Alexander, senior consultant in the San Francisco office of Blessing/White, a Skillman, N.J., consulting firm. "You must make sure that you are addressing [their] key issues. You have to understand their needs and what motivates them." For example, IT employees don't want their skills to become obsolete, says Alexander, "so one of the things you have to give them is the opportunity for career development by letting them work on different technologies and different projects." That goes hand in hand with the IT professional's attitude that he or she will be moving around. "IT people do not look at a company as a long-term career opportunity," agrees Rhodes. "They look at an employer as a place for one or two projects and as a place to build their portfolio of types of assignments." That's why challenging work assignments and career-development opportunities -- not compensation -- top virtually every list of what IT people want from an employer. "IT people want an assignment where they can apply and demonstrate their skills, while expanding their competencies in preparation for future opportunities," says Rhodes. "It is the type of work that attracts the best IT professionals," adds John Thompson, CEO of Stamford, Conn.-based IMCOR, a division of Norrell Corp. "So creating an exciting atmosphere where they want to work is probably the best way to attract them. You have to talk to people not just about a job, but about how the content of the work will help them in the future and how the job will help their career -- even if that career is something else somewhere else. You have to offer them the chance to manage projects and take them to the next level in training." IT professionals also are looking at companies' levels of technology. "IT professionals are gravitating toward companies willing to make investments in cutting-edge technology because they love to be on the cutting edge, not maintaining a technology," says Select Appointments' Lento. "Money is not the motivating reason they take jobs. Their No. 1 motivation is: How will this job help me advance my skills and my career? Their No. 2 motivation is how will this job help me live life the way I want to live it? Money is No. 3." As a result, says Lento, "these people are hungry for training" and want it to be part and parcel of their job. That means companies must allow IT professionals "time to hone new skills during working hours," he says. "If training is only after hours or on weekends, it sends employees a message that they are not important." In their efforts to find and retain key IT professionals, companies must also remember to think out of the box. "Seeking IT knowledge workers has become much like exploring for oil," says Rhodes. "Companies are having to look farther, consider the less obvious, and be more innovative in their approach." Indeed, the need -- and competition -- for IT professionals has prompted numerous companies to set up nontraditional in-house programs to give workers high-tech skills:
  • State Farm Insurance Cos. gives liberal-arts graduates information-technology skills through on-site training.
  • Prudential Insurance Co. of America gives interested and qualified workers the opportunity to take seven weeks of intensive Microsoft NT training and become Microsoft certified systems engineers.
  • Williams Cos. Inc., Tulsa, has transformation training for payroll clerks, dispatchers, and others who want to take a seven-week course and become associate systems analysts who develop and test client/server systems.
  • Blackbaud Inc., a Charleston, S.C., software firm, had trouble finding qualified programmers so it created a 12-week basic training program for employees interested in moving into those positions. It's also imperative, says Rhodes, that companies be "much more location-conscious" with regard to IT professionals. If you have a hot new product, for example, "You may want to move that operation into a college town and feed off that," he says. "You have to ask yourself where you need to be for the type of work that needs to be done. You have to strike a balance between what's [available] where you are, what you can compete for, and what you can import [from other geographic locations]." That's why more and more companies are adding flexible office policies or just letting programmers live where they want when face-to-face contact is not needed. Federal Express Corp., for example, set up remote data centers in Dallas, Orlando, and Colorado Springs to give computer programmers a choice of work locations other than its Memphis headquarters. "When demand for workers is high, the workers have choices," says Rhodes. "And with telecommuting, workers feel that they are less tied to a given location because the technology permits them to work [anywhere]." In addition to developing and implementing a strategy to recruit and retain IT professionals, companies must also know how -- and where -- to find such key workers. And right now, employee referrals, Internet advertisements, and company Web sites are turning out to be the best methods of finding potential workers. Some companies are getting one-third to one-half of their IT hires from referrals. "Involve your own employees and offer substantial bonuses to those who refer candidates [who later get hired] to the company," says John Petrik, director of career services at DeVry Institute, Addison, Ill. "And recruit on the Internet. That is where some high-tech companies are finding their new employees." Iomega Corp., Roy, Utah, gets 40% of its new hires from the Internet, and more than 50% of Cisco Systems Inc.'s new hires come from employee referrals. An integral part of Cisco's referral system: its Friends program in which prospective new hires who pursue jobs from Cisco's Web site listings get a telephone call from a Cisco employee doing the type of work the candidate is considering. That's why it has become commonplace for companies to pay employees anywhere from $1,500 to $5,000 as a finder's fee for referring a friend as an IT job candidate, says Blessing/White's Alexander. Besides, he says, the hiring rate from such referrals is much higher than from blind ads or rsums -- and such hires are twice as likely to still be with the firm two years after they are hired. Long-term, expect corporate Web sites and Internet advertisements to be the primary places where companies advertise for jobs. Posting job openings on corporate Web sites gives companies the ability to "communicate opportunities and screen applicants," says Rhodes, as well as provide easy-to-find data about a company's culture, training programs, and compensation packages. And a company can typically list 200 job openings, for example, over a six-month period on a Web site for the same cost as a modest print ad that runs four consecutive Sundays in a major newspaper.
    Who's In Demand?
    By 2006, the U.S. Bureau of Labor Statistics (BLS) estimates that the U.S. alone will need more than 1.3 million additional computer scientists and engineers, systems analysts, and computer programmers. BLS expects the number of jobs for computer scientists and engineers, for example, to more than double to 912,000 from the 427,000 that existed in 1996. Jobs for systems analysts also will double in that 10-year time frame to 1.03 million. Programmer jobs will increase 23% to 697,000. There's also growing demand for systems integrators, local-area network and wide-area network administrators, and people who can connect data and voice information. And the demand is worldwide, says Nick Lento, who as chief operating officer of Select Appointments North America, Wakefield, Mass., is responsible for its worldwide IT staffing. "In Europe, the demand is increasing because of both the euro and the Year 2000 problems," says Lento. "Besides, many European countries are just beginning to switch to a client/ server approach, so you may have even greater shortages that will be compounded by language barriers."

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