For five years, high-tech companies in Washington have been finding mid-level people through the World Wide Web, employee referrals and college recruiting. These days, that is simply not enough.
Companies are now using executive search firms to lure top management as well as stock options, bonuses and 30 percent salary increases as weapons in the war to fill other high-tech positions in Washington.
Competition has heated up in the last year among high-tech companies offering incentives to technical engineers and upper-level managers. The large number of job openings in Washington is allowing technical, mid- and management-level personnel to cash in on the fierce hiring competition among the high-tech community for the best talent.
"For hot technology companies, people are asking and getting what they want," said Burt Heacock, senior vice president of Paul-Tittle Associates Inc., a recruitment and executive search firm in McLean, Va., specializing in information technology.
"Washington is as bad or worse [at recruiting] than anywhere else in the country," he said.
Job searchers currently in the $30,000 to $50,000 salary range are asking, and in many cases getting, 30 percent increases from potential employers, according to local recruiters.
Twenty years ago, job seekers in the computer industry typically sought 15 percent salary increases, and in the early 1990s there were no salary increases, according to Heacock.
But companies in Washington and other hot, high-tech regions in the United States now have far more positions available than there are qualified technical people to fill them. Local universities have long been criticized for being unable to keep up with the pace of technology, and many people outside the area still think of Washington as a place for only government and political jobs.
"We've never seen the marketplace like this before," said Buster Houchins, managing director of the Washington office for Christian & Timbers, a senior executive search firm specializing in infotech.
A radio frequency specialist in Washington recently looking for a job was offered a position at a small start-up. The offer included a pay increase from his current salary of $50,000 to $90,000, plus stock options and a generous annual bonus.
Houchins also remembers the case of a $4 million venture-backed software company that was looking for a vice president of sales. The company had its sights on a prospect working at another company and offered stock options worth 2 percent of the company and $250,000 in cash compensation. According to Houchins, the package was equal to $5 million to $7 million.
"When there is a limited amount of intellectual capital, you wind up with a competing industry," said Ray Pelletier, executive director of the Northern Virginia Technology Council in Herndon, Va.
The council put together a task force in October 1996, headed by Mike Daniels, vice president of Science Applications International Corp., to attract qualified people to the region. The group is currently meeting with local high-tech companies and analysts and will present recommendations to the council later this year.
Jeff Anderson, a product manager for Visix Software Inc. in Reston, Va., experienced the hiring war in November 1996 when he landed his job at Visix. Prior to Visix, he worked at Systems Center in Reston, Va., and Network Imaging Corp. in Herndon, Va.
When he started looking for a new job, he had several job offers from other high-tech companies in the Washington area. He took the job at Visix, which he found in a newspaper advertisement, because the company offered him stock options, which he did not find with other companies that made him offers.
Houchins said the recruiting industry has become increasingly competitive at the executive level as well.
"High-tech is the fastest growing industry, and finding people is difficult," said Houchins, whose firm opened a Washington office three years ago. "There are no boundaries on recruiting." He said the formula for success is presenting an exciting business to potential hires.
"People don't go to companies that don't offer an equity piece in the company," said Houchins, whose firm makes 370 placements per year.
Paul-Tittle Associates Inc. recently announced it will be conducting a market research study online to evaluate attitudes among professionals in high-tech industries on career paths, compensation, job retention, joining start-up companies and the appeal of leading high-tech cities. The study will be released in a couple of months to better understand current and future recruiting trends.
"Five years ago we were looking for work. We're victims of our own success," said Pelletier. "It ... needs to be addressed by industry."