Reaching the end of a job interview, the human resources manager asked a young engineer who was fresh out of the Massachusetts Institute of Technology, “What starting salary were you thinking about?”
The engineer said, “In the neighbourhood of US$125,000 a year, depending on the benefits package.”
The interviewer said, “Well, what would you say to a package of five weeks’ vacation, 14 paid holidays, full medical and dental coverage, a company-matching retirement fund of up to 50 per cent of salary, and a company car leased every two years – say, a red Corvette?”
The engineer sat up straight and said, “Wow! Are you kidding?”
The interviewer replied, “Yeah, but you started it.”
This apocryphal scenario accurately describes the upheaval in IT recruiting. The hockey stick of big bennies and stock options has given way to hard-core power plays. As layoffs at once high-flying and seemingly invincible IT vendors such as Cisco Systems Inc. and Sun Microsystems Inc. and hundreds of Internet bombs push IT talent and experience onto the market, the law of supply and demand appears to finally be taking hold.
This means greater availability of experienced IT workers, salaries that are more in line with traditional corporate compensation, more leverage for hiring managers and all the fancy Aeron chairs you might want – at fire-sale prices.
According to Ravi Aron, assistant professor of operations and information management at the University of Pennsylvania’s Wharton School in Philadelphia, the tech bubble of stock market valuations created an artificial inflation of value when it came to hiring IT talent. “If you consider IT as a scarce resource to be allocated, it responds to market prices,” says Aron, “and you had a situation in which the artificial market cap of companies was used to drive up the salaries and compensation of IT personnel.”
The acute shortage of qualified IT professionals even drove Congress to increase the availability of H-1B visas. “Of course,” Aron says, “you would rather work for a company that promised you lots of money in the sexy Internet sector than working at some place like a Boeing.”
But the economics were flawed, like purchasing gold with tulips. So now, IT job applicants are asking questions such as: What’s the salary? Is this company going to be around next year? Does it have real customers?
Companies are now able to hire IT workers whose maturity and understanding of technology value are more closely aligned with more prosaic areas of the enterprise, such as middleware and legacy system integration.
Happily, the technology expertise needed to link internal, back-end systems isn’t that dissimilar from that needed to develop and integrate flashier front-end, Web-enabled ones.
“The big difference is in more complex project design and management,” says Aron.
That’s the type of IT designed to bring value to a company by cutting costs and improving efficiencies. And so what if it isn’t part of the New Economy? It’s more satisfying and rewarding to be part of the permanent economy and the pay is better.