Companies to Face IS Talent Crunch in 1998

With today’s tight labor market, a moment’s hesitation could cost hiring managers months of searching.

Or so discovered Hank Reeves, information systems manager at Fruit of the Loom Inc. A critical IS candidate was snatched by another company between Reeves’ first and second interviews with him.

Reeves may never know whether he’d found the right person for the job, which was to implement a large enterprise resource planning software package for the Bowling Green, Kentucky-based manufacturer of underwear and other clothing. But now he understands something else: With qualified applicants choosing from as many as six to nine job offers, IS managers can’t afford to blink.

And it looks as though the situation will only get worse. Half the 270 IS managers nationwide who participated in Computerworld’s annual hiring survey say they expect (or hope) to grow their staff by more than 10 percent next year. In New England, the Mountain States and the Mid-Atlantic, one-fourth of the respondents say they plan to increase their IS head count by more than double that amount.

And yet, there’s no magic pool of job seekers with their resumes in hand. One-third of the job requisitions opened last year never got filled, the hiring managers report.

To compensate, some hiring managers, such as Brian Callahan, are becoming more pragmatic. He no longer holds out for candidates with years of experience or a specific skill set. Now the chief information officer of Taco Cabana Inc. says he look for traits such as flexibility and aptitude.

Callahan says he hopes to increase his IS staff by 10 percent to 20 percent in the new year. But he concedes that “nowadays, you end up taking a chance on people because you don’t find the perfectly qualified candidate.”

That isn’t to imply that the need for people experienced with Java, Windows NT and Oracle has gone away. It’s just that hiring managers are beginning to take a “great deal of latitude in their hiring needs,” says Leo Louden, principal consultant at Winter, Wyman & Co., a recruitment firm in Waltham, Massachusetts. In other words, “if they want four things, they’ll take someone with two.”

That’s mostly very good news for IS job seekers, whether they want to work on the corporate side, in contracting or for vendor companies. The situation makes it easier to hold out for a truly desirable position.

Jason Dubois, a former technical support specialist at Microsoft Corp., turned down six PC tech-support jobs because he wanted to work on a corporate network. Being picky paid off, and he landed a computer analyst job at Taco Cabana. And in choosing his new area, the 26-year-old from Dallas showed a great deal of foresight.

Networking is the No. 1 growth area in every industry nationwide, according to a recent survey of CIOs by RHI Consulting Inc., a division of Robert Half International Inc. in New York. And according to the Computerworld hiring survey, networking is also the most difficult skill to find.

In Dubois’ region alone, more than 46 percent of the hiring managers say they plan to hire people who know TCP/IP; 30 percent need those with Ethernet experience; 27 percent will bring in Novell NetWare experts; and 13 percent want network managers.

But for Dubois, networking was more than a hot new skill. It was the road to job satisfaction. At Microsoft, he says, “I was one of 900 people. I had little significance in the scheme of things.” At Taco Cabana, he’s on a team of 10 that handles all IS-related activities for the San Antonio headquarters and the more than 120 Mexican patio cafes scattered primarily throughout Texas.

“I travel to all the restaurants all the time. I know the managers. I know the employees,” Dubois says. “I can give input on a small level as well as recommend ideas to the people in my department. ... At Taco Cabana, I can be heard.”

Other Hot Skills

For IS job seekers such as Dubois, the supply-and-demand gap could offer a means for getting involved in a new technology or project area. After networking, Internet/intranet development is the fastest area of expansion.

As companies such as Genstar Container Corp. in San Francisco move beyond World Wide Web sites and develop corporate intranets and extranets, you can expect to see a strong demand for IS professionals skilled in Hypertext Markup Language (HTML) and Java programming, Web server administration, and most of all, Internet development tools.

Relational database skills also top the most-wanted lists. Companies are increasingly willing to hire and train individuals who have at least basic relational database management system skills. And hiring managers go gaga over candidates experienced in Oracle development and administration.

Rex Carter, vice president and CIO at Carlson Companies, Inc. in Minneapolis, says he expects to hire 35 IS professionals next year. They will work with existing staff and consultants on an enterprisewide systems installation based on Oracle Financials. The challenge is to create a unified financial view of Carlson’s more than 100 corporations worldwide in the hospitality, travel and marketing/sales-incentive industries. He needs people who understand financial best practices, Oracle applications, Unix and client/server technologies.

Carter was joined by 36 percent of IS hiring managers who told Computerworld they plan to hire people with Unix skills, and 31 percent who hope to increase their staff with Oracle professionals. But the latter task won’t be easy because 16 percent also say Oracle is among the most difficult skills to find.

By far, the loudest cry is for people who know Microsoft’s Windows NT. Almost half of the IS managers nationwide say they also hoped to hire people with this skill. Windows NT Server came in a close second, at 43 percent.

That surge in demand surprises at least one person: Jim Crowe, the new CIO of Constitution Reinsurance Corp., a New York-based provider of property and casualty reinsurance.

“My background is mostly Unix,” says the financial services and defense industry veteran. “When I interviewed in July for this job, they described the environment and said it was going to be NT. I thought they must not be serious about some of these models they plan to run on their server applications.”

But they were. In 1998, Crowe expects to hire more people with experience configuring both NT Server and NT Workstations in a networked environment.

Hands-On Help

Good top dogs will always be in demand, and 1998 promises to be no exception. John Davis, president of John J. Davis & Associates, an IS executive search firm in New York, says seven out of 10 posi-tions for which he now recruits are newly created.

But once you get below the CIO level, the demand for nonmanagers seems to be on the rise. Well over a third of IS managers surveyed by Computerworld said they plan to hire administrators, programmers and analysts, but only a fifth will bring in computer operations managers, and 13 percent plan to hire managers of Internet/intranet technology.

IS organizations are flattening, and teamwork is growing. Consequently, hiring managers such as Carter say, “we need fewer supervisory skills and more doers reporting to fewer managers.” At Carlson a couple of years ago, you could find approximately one manager for every eight nonmanagers in IS. Today that ratio has gone to 1-to-12 or 1-to-14.

Coupled with rampant salary inflation, it looks as if the future may bring new kinds of career paths and alternative means of advancement.

A Double Bind

This gilded opportunity for job seekers contains a darker underbelly. After all, the pressure to hire quickly eliminates some of the interview process’ quality control. The responsibility to find a good fit, it seems, will fall more squarely on the shoulders of job seekers. Those who don’t resist the temptation to oversell could find themselves like one former employee of Genstar Container.

The developer was hired for a major database-driven extranet project undertaken by the subsidiary of GE Capital Service Co. But the candidate lacked the requisite database development skills. Due to that oversight, the new hire could handle the HTML portion of the project, but ultimately ended up in “way over his head,” says Jonathan Fornaci, the CIO who hired the developer.

Unable to keep up with the training provided, the developer was moved to a maintenance role. He left the company shortly thereafter.

As Fornaci learned, “by hiring less qualified people, [you risk finding out] they can’t stretch themselves to learn that quickly. And instead of adding value, they cost the company money.”

Due Diligence

To be sure, hiring managers must act fast, but not so fast that they end up in a tailspin. Often the solution to this quandary involves spending huge sums of money: on recruiting, on salaries and on retention.

Nationwide, almost six out of 10 hiring managers plan to spend more money on recruiting next year. Almost seven out of 10 are increasing starting salaries. And according to Computerworld’s Annual Salary Survey, the average IS salary increase is 9 percent — more than twice the national average for other professions.

That’s part of Callahan’s strategy at Taco Cabana. For the first time in 15 years, he says, “I’m continually having discussions with payroll about raising salary ranges.” He says he also expects to increase his recruiting budget by at least 50 percent.

And IS managers aren’t alone in feeling the pinch. Ruth Dodge, resource manager at IDX Systems Corp., a Burlington, Vermont-based company that provides information technology to the health care industry, says in order to increase her staff by 25 percent, she will have to triple her recruiting budget in 1998.

A Painful Predicament

But wage inflation and higher recruiting budgets are only half the picture. Companies are facing delayed projects, increased workload on existing IS staff, increased use of temporary or contract personnel and an overall mean time of three months to fill an open position.

At Fruit of the Loom, some people are finding they “can’t deliver projects on the same time frames,” Reeves says. And when business users ask for tactical projects, such as older system enhancements, increasingly the answer is “no.”

The IS labor shortage has forced Carter to increase his use of contract labor “dramatically.” It’s an expensive Band-Aid for the multinational conglomerate because agencies are raising their contract fees by as much as 2 percent per month.

Watch Your Step

What does all this mean as we head into 1998? For job seekers, the message is to do your homework. Know your skills and research prospective employers. In 86 percent of the companies surveyed, staff members are shouldering the burden of the growing labor shortage. Is that what the future holds for you?

Also, be sure to stretch, but don’t pull a hamstring.

For hiring managers, the coming year’s hiring dilemma may be one of the most difficult and expensive ever. The message is: Don’t underestimate the problem. It may affect your ability to compete. Don’t neglect your due diligence. And whatever you do, don’t blink.

(Natalie Engler is a freelance writer in Arlington, Massachusetts.)

SIDEBAR: Retention Deficit Disorders

By Natalie Engler

Most methods used to combat IS turnover are the opposite of what IS professionals left to find

It’s a sad state of affairs when more than half the IS managers nationwide worry about good employees being lured away. And yet, strategies for retaining workers don’t always match the reasons they leave.

The top method to combat IS staff turnover is training. It’s used by 39 percent of the respondents to Computerworld’s hiring survey. But only 27 percent of IS professionals who leave for other companies do so to receive more training. Turns out people are far more mercenary than that.

A whopping 70 percent say they left for more money, coupled with 64 percent who also left for career advancement. Despite that, only 27 percent of IS managers say they are raising salaries to keep people. But perhaps the biggest gap existed between the 38 percent of IS professionals who left because of their corporate culture and the measly 4 percent of managers who plan to improve the work environment.

Fortunately, not everyone is blind to the situation. Here are some examples of strategies that IS managers find to be successful in maintaining a low turnover rate:

-- Fruit of the Loom: Two years ago, the company opened an office in Nashville. “We created a separate data center for those who prefer living” in a city larger than the Bowling Green, Kentucky, headquarters, says IS manager Hank Reeves. It makes for some tricky management maneuvers, but as far as retention is concerned, the strategy “worked well,” he says.

-- Taco Cabana: The company just initiated an options program in which the amount of stock an employee owns increases every year for five years. The idea, CIO Brian Callahan says, is to “give people a piece of the company and help them not only make money but stay in it for the long haul.”

In addition, Callahan says, “I’m much more flexible now.” For example, he encourages people to take their family on business trips and schedule a vacation at the end. “There’s a lot more mixing of work with pleasure than in the past,” he says. “I think that adds to the loyalty of the team.”

-- Carlson Companies: Rex Carter, vice president and CIO, hopes to add 200 people to his 1,000-member IS department in 1998. To encourage employee referrals, he instituted a referral reward and an ongoing bonus program that can add up to $6,000 if a referred employee stays with the company for four years.

The company is also improving IS compensation and benefits packages by introducing project-related bonuses and incentives, career development activities and work-life programs, such as flex-time and day care.

The efforts seem to be making a big difference, Carter says. “While our attrition has gone up, we still are well below what we’ve seen in the community and nationwide” — a turnover rate of 20 percent to 35 percent.