It was a sweltering June night at the Middle East Club in Cambridge, Mass., and Joe Turner & the Seven Levels were about to take the stage. But this was no ordinary battle of the bands, and the alt-rockers were vying to win more than merely the crowd’s affection.
Each of the eight bands on stage -- as well as the 60-plus that auditioned -- had to contain at least one full-time IT professional. And the battle’s sponsor, ITA Software, was in a hiring frame of mind.
When the last guitar chord had sounded, a heavy metal band had won the contest, but it was Joe Turner who snagged a job. Résumés from the event continue to pour in, says Melissa McDonald, director of HR at ITA, which develops back-end search tools for travel sites such as Orbitz, Kayak, and Cheaptickets.
Recruiting drives for most growing software companies don’t typically resemble a scene from School of Rock. But when you’re competing for talent in this hot job market you have to kick out the jams, says McDonald, who has hired 123 people so far this year, most of them software engineers.
The tech job market has rarely been hotter. According to the Bureau of Labor Statistics, unemployment in the IT sector ranges from 2 percent to 3 percent, depending on the job title -- less than half the national average. The number of openings posted on technology job site Dice.com is up 18 percent compared with last year and 63 percent since 2004, says Dice CEO Scot Melland. “It’s a very good time to be a technology professional in the U.S.,” he says.
But it’s not so good if your job is to hire the pros. With more openings than people to fill them, tech organizations have to work harder to attract qualified geeks. They may also have to pay more for them, ratchet down their expectations for new hires, and do a better job of hanging onto the talent they already have.
Enticing new hires
If you think it’s hard to find qualified people over here, try doing it in East Asia, says Lauren Barker, manager of staffing at USi, an ERP managed services provider with 507 employees in the United States and 204 in India. The problem isn’t a dearth of talented techies; it’s cutthroat competition from other tech companies.
Earlier this year a major U.S. online retailer opened offices near USi’s in Bangalore and began luring away some of its best employees, offering salary bumps of 20 percent, as well as the prestige of working for a brand-name company. Worse, says Barker, in India job candidates routinely take their offer letters to the competition to see if they can do better.
“The job market in India is competitive right up to the last minute. They’re constantly bartering for a better title or more money,” Barker says. “You have to design the marketing strategy totally differently than you would for a U.S. position.”
USi realized it had to boost its brand recognition to attract new talent, so it created a direct-mail marketing campaign, sent mass mailings to every home in Bangalore and Hyperabad, and rented highway billboards.
Although U.S. corporations have yet to send out “you may have already won” letters to prospective job candidates, they are being more aggressive in marketing their brands, Dice’s Melland says. “We’ve seen an increase in advertising on the Net, publications, radio, and TV, and not just for job positions,” he says. “Companies are trying to get their brands out there so they can attract qualified people.”
Beefing up recruiting efforts
For example, ITA ran ads on the Boston T subway featuring a series of complex puzzles. “The idea was, ‘If you can solve this, you can work here,’ ” McDonald says. “We still hear from people who remember the puzzles.”
But as have many firms, ITA has also beefed up its internal recruiting efforts. The company offers employees $5,000 bonuses for successful referrals and encourages peer reviews of candidates.
“We have a very bottom-up interviewing process,” McDonald says. “If you were an engineer who interviewed with us, you’d probably meet with one manager and five other engineers. Recruiting really isn’t part of their job, but they want high-quality people as colleagues.”
It also helps to look in industries that you already sell into, says Cindy Jaudon, CEO of IFS North America, a division of the Swedish ERP vendor.
“When we’re looking to add employees, we don’t spend all our time trying to rob people from our competitors,” Jaudon says. “If you do that, you just get into bidding wars. We try to find people who are already working in the culture we sell into, like aerospace, defense, or high tech, and might be interested in joining our services organization.”
Companies have also had to scale back their ambitions and loosen their purse strings, says Brendan Courtney, vice president of Spherion, a major recruiting and staffing company based in Fort Lauderdale, Fla.
“Eighteen months ago employers were able to hold out for the ‘perfect’ candidate,” Courtney says. “Now when they hand us their wish list we say, ‘Well, if you’re willing to pay $130K we can fill this for you, but if you’re only paying $90K, you’ve got to decide what you’re willing to give up.’ ”
Among other things, IT organizations are ratcheting down the years of experience or knowledge of particular applications they require, Courtney says. Meanwhile salaries are going up, and they tend to be much higher at world-class companies, says Erik Dorr, senior business adviser at The Hackett Group, an Atlanta-based research company that measures organizational efficiency and effectiveness. Top-tier companies pay 32 percent more on average for their IT staff, he says.
“If you’re a mediocre company, raising all salaries across the board won’t make you world-class,” Dorr adds. “But as part of a general strategy in concert with other talent management initiatives, you’ll probably end up paying more for your IT staff.”
Life and work in balance
In times of high competition, the best and the brightest gravitate toward companies that are doing more cutting-edge work, Dorr says. He cites wireless technologies, information security, and data mining as three hot areas of interest.
“It’s always exciting for people in technology to work in a place that has a reputation for doing leading-edge stuff,” Dorr says. “It’s essential to make your workplace an exciting place to be. Creating that kind of culture will help attract top talent and keep them there.”
Offering the right life/work balance is also key, Spherion’s Courtney says. The ability to telecommute, work flexible hours, and get on-the-job training may be more important than money, benefits, or a foosball table in the employee lounge.
“What the emergent worker of today wants out a job is very different than what our parents wanted,” Courtney says. “They were willing to swap money for the security of a long-term position. Today’s workers are willing to swap money for flexible work schedule, continuous education, and sexy IT projects.”
At USi, for example, many employees are full-time commuters, whereas others work flextime schedules. That helps the company attract and retain desirable candidates, Barker says.
However, there’s still a significant gap between what employees want and what many companies are willing to give. For example, in Spherion’s 2005 Emerging Workforce Study, conducted by Harris Interactive, 60 percent of employees rated time and flexibility as key factors in deciding whether to take or keep a job, but only 35 percent of employers rated it Click for larger view. as highly. A third of the 502 HR executives contacted said their companies don’t offer flextime, and more than half had no plans for any telecommuting programs.
Reviving old-school perks
To paraphrase an old song, if you can’t hire the ones you love, love the ones you’re with. Business growth is driving a lot of new hires in the IT space. But when possible, retaining and retraining existing employees is a better long-term strategy for success. It’s also cheaper. Courtney estimates it costs companies nearly $60,000 to replace a single employee.
The most effective retention device is paying people to stick around, says Harry Wallaesa, founder of tech consultancy The W Group and a former CIO at Campbell Soup.
“But No. 2 is creating a sense of belonging,” Wallaesa says. “You need to make people feel like they’re truly making a contribution to the organization. In some cases, people value that more than they value money.”
To retain top talent, IT organizations are also dusting off old-style perks such as creating collegial work environments, faster career paths, and more on-the-job training (see “Targeted training keeps workers sharp.")
“Companies are beginning to take a more employee-centric approach, offering workday outings like golf tournaments and after-work cocktail hours,” notes Tracy Cashman, partner at Boston-based recruiting company Winter, Wyman & Co. “But they’re also more likely to offer better raises and faster promotions to deserving employees, rather than risk losing them to their competition and having to put forward counteroffers.”
Finding and keeping top IT talent is always a challenge, especially in today’s red-hot job market. But it’s easier if you’re willing to consider fresh approaches and take risks.
“We still end up kissing a lot of frogs to find one prince,” ITA’s McDonald notes. “But it’s not as hard as it could have been. We have a relatively unique story, so when we attract someone, we really attract them. It’s a good position to be in.”