In-Depth

Careers: Despite Favorable Job Market, IT Pros Stay Put

IT pros have long endured the slings and arrows of an employer’s marketplace. The tables are turning, but there’s still considerable disparity between the thoughts and perceptions of hiring managers and prospective job seekers.

Ever since the early 2000’s economic downturn, IT pros have endured the slings and arrows of an employer’s marketplace. Employers slashed benefits, eliminated perks, froze—or increased only modestly—salary and compensation levels, and through it all placed more responsibilities on the already brimming plates of their employees. Don’t look now, but it might just be payback time.

That’s the upshot of new research from IT workforce watchers Robert Half Technology and Careerbuilders.com. For one thing, the two companies say, more than half (51 percent) of the hiring managers they surveyed for their 2005 Employment Dynamics and Growth Expectations (EDGE) Report indicated that it was difficult to find qualified candidates 12 months ago, while more than 81 percent said the same today. There’s good news for IT pros with experience and certifications, too: more than half of hiring managers who said they had experienced trouble recruiting cited a shortage of qualified professionals as the biggest problem. The result, Robert Half and Careerbuilder.com say, is that almost 40 percent of hiring managers expect to boost starting salaries to help attract new talent.

It hasn’t always been this encouraging, assuming the Robert Half and Careerbuilder.com survey isn’t just an anomalous blip on the radar screen. But a range of other indicators—including a recent report from market watcher Gartner Inc.—point to the emergence of a job-seeker’s market. For example, a Gartner poll of 188 U.S. IT organizations found that approximately 61 percent of respondents project some level of IT staff increase between now and early 2007.

More telling still, respondents reported a 1 percent increase in worker-initiated turnover compared to last year's survey results. The upshot, Gartner says, is that CIOs expect to spend money—in the form of salary increases or other perks—to hire or retain top IT talent. The average 2006 salary increase for IT employees is likely to be in the neighborhood of 3.5 percent, according to the company.

A Long Time Coming

IT pros have long expressed dissatisfaction with their compensation, benefits, and work responsibilities. It wasn’t until recently, however, that many have determined to do anything about it. Consider the case of a former production support engineer with telco giant Sprint Nextel, who says he leapt at the chance to take a voluntary severance package in April after eight years with that company.

“My pay was, for the most part, stagnant after 2001, really until very recently. Just looking at my tax records, [pay was stagnant],” this IT pro—who asked that his name not be used since he’s still seeking employment—said.

This professional was among several hundred Sprint employees who were outsourced to IBM Corp. one year ago as part of an ambitious global services win for that company. He didn’t get a raise or see much in the way of compensation perks when he came onboard with IBM, he says, but he was given a raise when Sprint “backsourced” most of its former employees in March. That was part of the telco giant’s prominent about-face on the outsourcing front.

“I got a raise when I came back, but really, the amount of work [I was expected to do] increased even more. Part of that problem was not that there was more work but that the members of the team had left or had chosen to take earlier opportunities to leave the company and move on. Either way, I had more work and they were paying me the same. That’s why I opted to leave when I had the chance.”

This IT pro hasn’t yet found work, but—with a healthy savings account and the added padding of a three-month severance package, courtesy of Sprint Nextel—he says he’s taking his time and that he’s determined to find a job that he likes. Not everyone will follow his lead, of course. Representatives from Robert Half Technology argue that rank-and-file IT employees are still somewhat cautious about their job prospects and are consequently less willing to try to negotiate higher salaries. Fully 40 percent of survey respondents categorized the job market as difficult 12 months ago, while 85 percent say it is equally or more challenging today. What’s more, nearly 20 percent of workers say they are less likely to ask for more money from a potential employer in the next 12 months, while the number of those who were more likely to try to negotiate for better compensation packages dropped significantly compared to last year’s results, Robert Half representatives confirm.

The Robert Half results jibe to some extent with those from IT staffing specialist Spherion, which—in a survey released last month—found that fully half of IT workers surveyed said that they were unlikely to look for a new job in the coming months. That might not seem all that encouraging, but it’s a marked improvement from Spherion’s previous tally, which found that 56 percent of IT workers anticipated looking elsewhere for new employment in the coming months.

What accounts for the disparity between the thoughts and perceptions of hiring managers and prospective job seekers? Spherion officials chalk the change up to improved talent retention efforts on the part of employers. Rival staffer Robert Half, for its part, says talent retention is only a part of it. More to the point, Robert Half representatives say, it has to do with the kinds of employees companies want to hire: namely, IT pros who are skilled, qualified or certified in often esoteric technology disciplines. As a result, the perception that it’s a job-seeker’s marketplace—but a highly skilled, highly specialized job-seeker’s marketplace, at that—could have a chilling effect on many would-be job seekers, Robert Half officials speculate.

“There is strong demand by employers for highly skilled employees to fill staff-level positions,” said Robert Half chairman and CEO Max Messmer, in a statement. Messmer attributes the strength of this demand to regulatory compliance requirements, which he says up the ante—in terms of complexity and in other respects—for companies.

Employees who have taken the plunge back into the job-seeker’s market—such as the former production support engineer with Sprint Nextel introduced above—have found the going to be somewhat unpredictable. Things are perceived as better than they were last year, to be sure, but job-seekers are still cautious, Robert Half representatives say. Last year, for example, 55 percent of employees said it was difficult to find a job during the 12 months prior, while 42 percent said it was even more challenging at that time (i.e., during July of 2005). In 2006, job seekers are more optimistic, but still relatively sober, too: 42 percent of respondents polled this July said it was difficult to find a job during the 12 previous months, 37 percent said it’s even more challenging today. Another 36 percent believe it will be even more challenging next year.

Salaries Rising—But Who’s Hiring?

The good news—for qualified IT pros, anyway—is that a significant percentage of hiring managers (one-fifth) seem to think that the difficulties they’ve experienced finding qualified candidates can be attributed to the disappointing compensation packages they’ve been offering.

Last year, 28 percent of hiring managers said they had increased compensation levels for job offers in the 12 previous months. Encouraging, yes—but this year that figure increased to 36 percent. While one-third of hiring managers surveyed last year anticipating increasing hiring levels over the next 12 months, 38 percent anticipated doing so over the coming year.

Meanwhile, workers seem less inclined to negotiate more lucrative compensation packages. Twenty percent of professionals reported they were less willing to negotiate a more generous job offer today than 12 months ago. Thirty-two percent of workers said they are likely to negotiate more lucrative compensation 12 months from now, down from 47 percent in 2005.

The Robert Half survey, which was co-developed and hosted by Careerbuilder.com, includes responses from more than 1,000 hiring managers and 3,000 workers, and was conducted from July 27 to July 31, 2006.

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