Tech workers plugging back in, but for some jobs power has faded

Jul 9th, 2006 | By Bill | Category: Employment News



Tech workers plugging back in, but for some jobs power has faded

A growing economy is producing the first sustained high-tech hiring surge since the dot-com stock boom’s collapse threw hundreds of thousands of technology professionals out of work five years ago.

Yet even though a cyclical recovery is creating good opportunities for many workers as employers scramble to fill openings, trends such as outsourcing are making it harder for others to find work.

The varying fortunes of tech workers in a healthy economy illustrate the paradox of an era in which highly skilled workers in a fast growing industry face challenges staying fully employed even in good times.

Nowhere is this more apparent than in technology, where rapid change is constant.

“Even when companies are adding labor they’re also hedging their future,” said Gartner Inc. senior adviser Howard Rubin. “They’ve learned the economy doesn’t always go up. They’re only hiring specialized skills close to home” that are essential.

And for those skills, the market is heating up.

Employers ranging from financial-services giant JPMorgan Chase to software maker Lakeview Technology Inc. are stepping up recruiting and in some cases increasing salaries to attract top software developers, quality assurance professionals, project managers and systems integrators.

“The last time I can remember the market being this competitive was during 2000,” during dot-com mania, said Patrick Frost, recruiting manager at Oakbrook Terrace-based Lakeview Technology.

Hired on the spot

Frost recently identified a software developer his firm wanted to hire, but before he could get an offer approved the candidate interviewed at a firm that hired him on the spot.

In the next go-round Frost made an offer near the top of Lakeview’s budgeted salary range within two days of when the candidate applied.

“We didn’t want to lose this one as well,” he said.

Lakeview’s experience is not unusual, said Bennett Ockrim, vice president of technology for Spherion Professional Services’ Midwest region.

“Employers are recognizing they have to react very quickly,” he said. In some cases, “they’re having to recalibrate between getting the best possible person and getting someone at all.”

Independent tech recruiter Jeff Skrentney in Chicago senses the change in negotiations.

Since 2001, “we’ve been lowering our fees and pandering to our clients, and now the pendulum is swinging back,” said Skrentney, whose fees are up by an average 8 percent compared with last year. “There is a sense tech recruiters can’t be brushed off like in past years.”

Talent was so plentiful during the downturn that 10,000 people applied for 600 positions when the former Bank One decided in late 2001 to buck the outsourcing trend by bringing its technology operations back in-house from IBM.

Now the merged bank’s successor, JPMorgan Chase, is hiring briskly again, this time to accommodate growth and add Internet applications to expand online banking. The financial-services concern is filling about 100 openings in the Chicago area.

“It’s a much more competitive market,” said chief operations officer Maureen Osborne. “We’re starting to see salaries increase. There’s just more competition in the marketplace. More companies are hiring, so we’re all going after the same top talent.”

Yet it’s not uncommon for large companies such as Schaumburg-based Motorola Inc. to be hiring while at the same time laying workers off.

Fastmobile, a wireless start-up based in Rolling Meadows, is hearing from tech professionals who expect to be laid off at Motorola in a divisional merger, said Fastmobile Chief Executive John Hoffman, whose firm is looking to fill 15 to 20 positions. “We’re targeting companies in the area that are undergoing change,” he said.

But while some workers get snapped up quickly, others with skills that are more easily outsourced or replaced remain vulnerable to cost cutting.

“The market is looking better, but there are still large numbers who can’t find permanent jobs,” said Thomas Cunningham, a former software executive who started Lisle-based Exodus Technology Services Inc. three years ago when he was out of work.

His firm hires out-of-work tech professionals to provide support for small and midsize businesses.

“I’m watching incredibly talented people, from database experts to help-desk people, month after month not finding work,” he said.

Contract work

Many end up accepting contract positions, he said. “One just got a nine-month to 12-month job at Motorola with a slight chance it might become full-time.”

Eric Mainz, a systems support manager with 16 years of experience, was laid off more than a year ago from a downtown financial-services firm when his department was outsourced.

“There’s been an awful lot of off-shoring of support positions, which tends to put people here at a disadvantage,” he said. “It certainly puts pressure on salaries.”

To support his family and preserve his options he obtained a real estate license and began selling homes while continuing his search.

“I’m simply not getting responses,” said the Villa Park resident, who averages one interview a month.

Economists who focus on the big picture rather than on individual displacement say the labor market is working well.

Between 2001 and 2005 jobs in computer-related occupations grew more than twice as fast as the average for all occupations, according to an analysis of U.S. government data by Robert Lerman, an economist at American University and the Urban Institute, a think tank.

Nominal wage gains for computer-related jobs matched the average for all occupations, increasing by about 11 percent.

But growth varied widely among occupational groups. The number of computer programmers fell by 22 percent, for instance, while software applications engineers grew by about 26 percent.

Support specialists grew by a slim 1.3 percent, reflecting outsourcing.

Overall, higher skilled, higher paid occupations grew faster than those requiring less skill.

“The data over the last four years have a broadly positive bent to them,” Lerman said. “We’ve created a whole new occupation in the last 30 years, people have gotten trained and found their way to achieve what’s required.

“It fits very much with the economy’s rising demand for skill, which in general is a good thing,” he added. “But it means that people who want to succeed have to learn something.”

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