From InformationWeek

Outlook Brightens For Tech Staffing June 16, 2003

More companies plan to hire I.T. staffers; compensation has stopped falling
By Marianne Kolbasuk McGee


Since the end of the war in Iraq, IT salaries have stabilized and more companies are planning to hire tech staff, according to a new study by management consulting firm Janco Associates.

IT compensation that had been on a "deflationary, spiraling fall" over the last four quarters has stopped its decline since the end of the recent war, says Vic Janulaitis, CEO of Janco, which conducted its most recent semiannual survey of 300 companies at the end of March.

"I think this shows that most companies have realized that there aren't any more places to cut," in terms of IT and tech talent, Janulaitis says. The end of the war as well as positive business outlooks regarding tax cuts seems to be fueling a bit of new confidence for IT investments, particularly in E-business, object programming, security, and voice and wireless technologies, he says.

CIO pay, which had been falling since 2001, has leveled off at about 1998 rates, with mean salaries of about $375,000. Mean salaries for all IT positions in large companies increased to $80,030 in the second quarter of 2003, up from $78,687 in the last quarter of 2002.

Among IT professionals seeing the biggest jumps in total compensation, including bonuses and salaries, were Internet-related managers at midsize companies. Their mean pay rose more than 17%, from $82,500 in the last 2002 quarter to $96,628 in the second quarter of 2003, says the Janco report.

Benchmark pay for Internet managers has been on a bit of a roller coaster: $109,749 in June 2002, sliding to $94,875 in January 2003, now rebounding to $149,259 in March of this year. Janco defines benchmark pay as the total compensation needed to obtain and retain top talent for a particular post.

Also, those in voice and wireless communication and security positions are seeing their status rise--the ranking and seniority of those jobs have been upgraded within many companies. Before 2002, IT professionals with those skills mostly held lower to mid-level positions, but this year those jobs are filled by mid- to senior-level people.

People in the highest IT levels are staying put, particularly executives nearing retirement age, according to the report's findings. Individuals who had planned on retiring in 2003 and 2004 have seen their retirement portfolios shrink in the last two years, so they're deferring retirement. Janco also found that many of these individuals have focused on staying in their current jobs, versus looking elsewhere for increases in compensation.

Janulaitis sees some soft spots, particularly in IT training and infrastructure. "If you have jobs in those areas, I wouldn't try looking for new ones right now," he says. But, "as long as there aren't any terrorist attacks or other negative events," Janulaitis is hopeful that the positive signs in this quarter's survey indicate the beginning of an overall upward trend.

From Yahoo

Job Market Worst Since Early 1990s
By TIM CIGELSKE, Associated Press Writer

MILWAUKEE - Three out of four employers expect to cut jobs or hold off on hiring this summer, contributing to the worst employment market since the early 1990s, a new survey said Tuesday.
About two-thirds of employers said they don't expect to hire any additional workers and 9 percent plan to eliminate jobs during the July-to-September quarter, according to the survey by Manpower Inc.

"Let's try not to get anyone too depressed, but the facts are the facts," said Jeffrey Joerres, chairman and chief executive officer of Manpower, which surveys 16,000 businesses for its quarterly survey.

Although 20 percent of employers in the survey said they plan to add jobs, competition for work is expected to be high. Six percent are uncertain about their employment plans.

But better-than-expected economic data released Tuesday offered some encouragement that the economy is trying to rebound. Consumer prices were flat in May as falling costs for energy products and clothing offset rising prices for medical care and lodging, surprising analysts who predicted prices would dip. Industrial production, meanwhile, posted its first increase since February.

Another report showed good news from one of the economy's few sources of power, housing construction, which jumped by 6.1 percent in May from the previous month to a seasonally adjusted annual rate of 1.73 million new units.

And, in a sign that the nation's battered manufacturing sector is turning a corner, the Federal Reserve (news - web sites) said that production at the nation's factories, mines and utilities nudged up by 0.1 percent in May, after dropping by a sharp 0.6 percent in both March and April.

Stocks have surged for three months as investors grow increasingly confident about an economic rebound by year's end. The three main gauges — the Dow Jones industrial average, the Nasdaq composite index and the Standard & Poor's 500 index — are now trading at levels not seen in a year, but analysts caution that the market could see major pullbacks after advancing so quickly.

Despite the trio of reports suggesting modest improvement in the economy, stocks slipped early Tuesday as investors opted to cash in profits from Monday's big rally, underscoring traders' cautious outlook on the economy.

"It's a buyer's market right now if you're an employer," said economist Patrick Anderson, principal of Anderson Economic Group in Lansing, Mich. "Some of those who are getting a real shock are those who are emerging from college and don't have strong work skills."

Manpower, which is based in Glendale, Wis., and is the nation's largest staffing company, has conducted the survey for 27 years.

The company collected the most recent data in April during the war in Iraq (news - web sites) and the SARS (news - web sites) crisis, which analysts say could account for some employer pessimism.

"April has to be one of the worst months in recent history to take an outlook survey," Anderson said. "We would expect that a war would depress hiring plans."

Joerres said employers face uncertainty in this downturn because of its duration and multiple fits and starts. By contrast, the "classic" recession during the first Gulf War (news - web sites) was followed by a relatively smooth recovery, Joerres said.

"I do think we're in uncharted waters from a labor perspective," he said.

Doug Thomas, operations manager of TemPro Staffing of Green Bay, Wis., called the job outlook for light industrial semiskilled workers, "very, very weak."


"More manufacturing is leaving than coming," Thomas said.

Art Ayre, state employment economist for Oregon, said his state has lost 8,500 manufacturing jobs in the last year, but he is expecting a slight rebound for his state and for the rest of the nation in the third quarter.

"We're still waiting for some indication that we'll achieve stability and then actually gain some growth," Ayre said.

The education and nondurable goods manufacturing sectors are facing the biggest impact, with each group's employment levels for the third quarter the lowest in 20 years, according to the survey.

Education jobs are at their lowest level in 27 years of Manpower data, with more employers expecting to cut jobs than those who are expecting to increase jobs.

Employment estimates across the United States are relatively consistent, with the South reporting slightly stronger hiring expectations and the Northeast expecting the slowest hiring pace for the third consecutive quarter.