October 31, 2002, 12:00 AM

More Turmoil In the Job Market

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Some of the most generally sought-after skills have application in e-retail as well as other sectors. Hewitt Associates’ 2001 hot technologies survey defines IT hot skills as those in short supply and high demand, resulting in rapid changes in market value. This year, Hewitt lists among hot skills PeopleSoft application and product services and SAP basis infrastructure, application development and product services; Hewitt identified the same skills as hot last year.

But there’s a significant difference between last year and the most recent data. Last year, salary increases were higher for workers with such skills. The data cut for information presented in 2001 actually reaches back into 2000 and reflects some months of a still-pumped dot-com economy. The median infrastructure for base pay for hot skills went up by 7.5% between two years ago and the year that followed, but in this year’s survey, hot skills were receiving lower pay increases than in previous years, with a median increase of 4% in base pay over the past 12 months, Hewitt reported in July.

More security demand

“The economic challenges companies face are extending to hot-skilled IT workers who traditionally have been less impacted by these factors. Today more than half the companies surveyed are experiencing hiring freezes, reductions in salary-increase budgets and layoffs among these IT professionals,” says Lorraine Dunlap, IT consultant for Hewitt.

People3 also found in its most recent survey that employers reported the most difficulty in finding workers with PeopleSoft and SAP experience. Those skills still are commanding 10% to 15% premiums over base pay, but other specific skills are getting 5% to 10% premiums over base, compared to 10% to 15% in 2001. “The economic challenges companies face are extending to hot skills this year, which shift with the times,” Berry says.

Beyond hot-skilled workers, Berry adds, employers in e-retail and other sectors are having the greatest difficulty this year in finding and hiring database administrators. While those with experience and expertise in database security have long been in demand-particularly in e-commerce operations that must allow the databases to interact with the public-demand has been heightened now due to increased concerns about the security of data in the aftermath of the World Trade Center attacks.

“Database administrator has always been on the list of the top five most in-demand positions, but 9/11 pushed it right up to the top,” Berry says. “Look at computer and IT-dependent businesses and how quickly they had to pack up and move to other buildings. Without proper security and back up systems, how are you going to do that?”

Filling out the rest of People3’s top five were Internet/web architect, project manager, network architect and network engineer. While still the most challenging jobs to fill, they are less so than last year. The hiring cycle for such positions is generally two to three months, but that time continues to decrease, according to People3. On average, the decrease in time to fill the positions was 0.7 month from last year to this year, compared to a decrease of only 0.5 month from 2000 to 2001.

One reason IT workers with certain skills are difficult for employers to find is the rapid pace of technology evolution, Legrand says. “When you pass the bar and become an attorney, you’re an attorney for life. You can update your skills with continuing education courses. But with technology, people who are masters of their discipline in one programming language, for example, can find that the world has changed in five years,” he says.

Legrand adds that few schools teach hot skills, which means that much of employees’ training in such skills must come from the workplace. Investing in such training has become something of a double-edged sword for employers, who fear that training workers may lead to them packing up their newly acquired skills and taking them elsewhere.

Indeed, e-retailers and others dependent on IT support would be well-advised to keep an especially close eye on the staffing of IT operations over the next few years, suggest the findings in another People3 research report. IT staffing needs, including those of web site operators, will accelerate over the next five years, with the workload of the IT function expected to increase by 50% by 2005. “It is absolutely essential for IT and human resource leaders in the organization to have the right programs and policies in place to attract and retain IT staff during the next few critical years,” says Linda M. Pittenger, president and CEO of People3.

Keep on training

Despite the seeming risk of training workers in skills they could potentially leverage for higher compensation at another job, however, IT employment consultants universally encourage their corporate clients to provide such training to promising employees. “The benefits to skill development that result from expanded training and development practices outweigh the risks,” Schafer says. “It costs far less to maintain key employees than it does to hire new ones.”

That means retention strategies are assuming new importance. Interestingly, People3’s surveys rank the use of new technologies, training opportunities and providng a challenging technical environment higher than competitive market-based salaries as effective retention practices. And though pay incentives may be smaller but they still provide motivation.

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