Hiring rates set to double for Y2K employees

Companies that have yet to begin year 2000 repair work will be in for a nasty surprise when it comes to hiring staff - those who aren't overseas will be charging double the current rate soon. 'Both New Zealand and Australian markets are being actively targeted by not only the UK companies but now by the US as well,' says one recruitment specialist. 'The drain has been going on for about 12 months and it will definitely increase in speed.'

Companies that have yet to begin year 2000 repair work will be in for a nasty surprise when it comes to hiring staff — those who aren't overseas will be charging double the current rate soon.

"Both New Zealand and Australian markets are being actively targeted by not only the UK companies but now by the US as well," says Craig McGrory, general manager of recruitment agency Andrews Partners. "The drain has been going on for about 12 months and it will definitely increase in speed."

The latest trigger is the decision by US Congress to increase the number of H1-B visas from the current level of 65,000 a year to 115,000 a year for the next two years. H1-B visas allow migrants with technical backgrounds to work in the US and the decision to raise the cap is a direct result of increased Y2K work. For the past two years the limit has been reached before the government's fiscal year ends in September. This year it was reached in May, prompting debate on raising the limit. The cap will drop back to 107,500 in 2001 and return to the current level in 2002. The bill also provides funds for scholarships in maths, engineering and computer science for low-income students and job training for US workers. That should lead to a surge in US graduates by 2002.

Wellington-based recruitment agency Duncan & Ryan has already been contacted by a US-based company in need of staff.

"They're looking for staff right down the chain as far as engineers. It's frightening," says director Bruce Duncan. He says US firms like New Zealanders and they're struggling to fill vacancies, which could spell trouble for New Zealand. "What with the UK and now this, it's not looking good for New Zealand."

As reported previously in Computerworld, New Zealand IT professionals are in high demand in the UK. Issues such as Y2K and the European monetary union are driving the shortage and contract workers can expect to earn far more in Europe or the US than here.

"Previously contract rates weren't too dissimilar," says McGrory. That, combined with New Zealand's standard of living, meant it was relatively easy to keep staff in jobs. Now, however, he's not so sure.

"It will drive contract rates up here because a number of companies that are slow off the rank to address their Y2K issues will suddenly find themselves in a market where labour is even more scarce than it is now."

McGrory is seeing more of the so-called "golden handcuffs" arrangement where employees are paid completion bonuses and other incentives to stay in their current positions.

"We're also finding it increasingly difficult to contract people from off-shore because the rates here aren't anywhere near as attractive."

IT professionals moving to the UK have been able to earn at least half as much again on top of their hourly rate, and some have more than doubled the size of their pay packets.

One interesting aspect of Congress' bill is the demand that overseas recruits be paid at the same rate as US employees, to ensure companies don't simply hire foreigners as a cost saving measure. That means recent graduates could be the biggest winners of all.

"It's a good time for university graduates at the moment. Without them knowing it, the world's their oyster if they get it right," says Duncan.

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