Now It's Official: IT Workers Harder To Hire Than Other Employees

By Gail Repsher, Staff Writer

Everybody in the industry says it, and now it has been officially confirmed: Information technology jobs really are more difficult to fill than other types of jobs.

That's the conclusion of the first phase of a two-year study released late in July by the Information Technology Association of America and human resources consulting firm William M. Mercer Inc.

The study showed that both IT and non-IT organizations had difficulty hiring IT workers, and that companies took an average of nearly 37 percent longer to fill IT jobs as compared to non-IT jobs.

"The IT job shortage continues to impact virtually every sector of our economy," said ITAA President Harris Miller. "In an age where intellectual capital is often a company's primary asset, it is a concern that the capital is a scarce, sometimes rare resource."

Anecdotal evidence of a technology worker shortage, as well as studies capturing a one-time look at the tech job market, gave way to the ITAA-Mercer effort. The ongoing study will analyze quarterly data from about 70 small and large companies in 34 states over two years.

The first phase covered the fourth quarter of 1999. Participating companies have been promised confidentiality.

"We are concerned that in typical surveys, you get a snapshot, but that may not be the best way for companies to see where they're going," said Haig Nalbantian, a principal with Mercer's Human Capital Strategy Group in New York. "There are a lot of debates about shortages of IT personnel that affect government and private-sector policy, and we think information over time can help illuminate that debate."

By including data about non-IT workers in the survey, Mercer will ensure that any trends identified in the IT job market can be distinguished from general labor market pressures, Nalbantian said.

"We don't want to confuse regular economic pressures with pressures on this [IT] industry," he said.

Employers will need to fill 1.6 million IT jobs this year, according to the Arlington, Va.-based ITAA. Employers said the demand for talent has definitely lengthened the hiring process.

"The fact that there is such fierce competition for workers stretches the time from vacancy to fulfillment," said John Skalko, spokesman for Lucent Technologies Inc. in Murray Hill, N.J. "You might find a candidate with more than one offer on the table. That, in and of itself, slows down the hiring process."

Executives are taking steps to close the gap between vacancy and fulfillment.

"In large IT markets, potential employees have a lot of choices, so you can't drag out the process," said Jeff Shuman, senior vice president of human resources at Litton-PRC Inc. in McLean, Va.

For Litton, that means using nontraditional channels to publicize the company's personnel needs.

For instance, Litton employees appear on talk radio shows in the Washington area to offer career advice and market the company at the same time.

"It's almost a branding process, combining recruiting and marketing to attract and retain talent," he said.

The ITAA-Mercer study also found that on average, 76.5 percent of companies offered sign-on bonuses to IT workers, compared with 52.5 percent for non-IT workers.

Large organizations were most likely to give sign-on bonuses to IT workers, reporting they did so more than 90 percent of the time.

"The difference in the use of sign-on bonuses is extraordinarily large," Nalbantian said. "The result seems to be driven by the larger organizations. This is the method larger organizations are using to try to close the gap and get people to sign on quickly."

Employers at large IT organizations said they often award sign-on bonuses, but not across the board.

"It's not a standard approach; it's based on the individual and what our needs are," Shuman said.

While "more companies are offering sign-on bonuses, more companies are offering bonuses to employees for referring other employees," said Renato DiPentima, president of the government sector for SRA International Inc. of Fairfax, Va.

Not only do referral bonuses give current employees the opportunity to earn their own bonus dollars, they also bring good employees to the organization, DiPentima said.

"Employees know the kind of people you're looking for. You get a good, high yield," he said.

ITAA and Mercer also reported that budgeted pay increases for IT workers are roughly 10 percent higher than increases for non-IT workers. Forty-six percent of respondents also said the base pay of new IT workers is higher than incumbents in the same job.

"The budgeted pay increases suggested persistent pay pressure in that [IT] industry," Nalbantian said. "We know that labor markets generally are tight, but when you see the differential in pay rates, that is suggesting this sector is experiencing unique pressures."

DiPentima agreed. "There are upward pressures on wages," he said, and employers often must pay new hires more than incumbents.

"It's not unusual that you could be paying more for a new person coming in than for the person already on the job," he said. "We look at our salaries constantly, adjust them no less than once a year, but ... if we're bringing in new college hires at a better wage than the people we hired last year, we'll adjust [incumbents'] salaries. It makes no sense to bring new hires in and lose the people you hired last year."

The study was "right on target," Shuman said.

"Their looking out to the future caused us all to think very differently," to consider nontraditional recruiting and focus on employee retention, Shuman said.

That's what Nalbantian thought might happen.

"We hope the study over time will spur some creativity of thought in what you can do in attracting and retaining employees," he said.