The U.S. online shopping world's biggest day is here, but will strong web sales on Black Friday and Thanksgiving cut into Cyber Monday's take?
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Retail salaries haven’t really dipped despite the larger pool of workers in the job market, but employers with jobs to offer are filling them faster. “We see relatively short search times,” says Challenger president John Challenger. “In the second quarter of this year, it took an average 2.07 months to fill a job-normally, it’s about 3.2 months. We’ve seen searches stay under 2.5 months for the past nine months. Many people are getting picked up by companies out of the dot-com realm and going into the rest of the economy-and the rest of the economy is glad to get them.”
Similarly, at people3, Berry has seen a half-month drop in the length of time needed to fill IT positions across all industries, including retail, as the market has filled up with laid-off talent. “It’s gotten easier to fill jobs because there are more people available,” she says. Hiring bonuses haven’t dropped off the face of the earth, but the days of rewarding new recruits from top MBA programs with BMWs are gone. Hiring bonuses have ranged from $20,000 to $30,000 for top-level IT company executives, $5,000 to $10,000 for middle management, and $2,000 to $5,000 for individual contributors. “I haven’t seen those ranges change,” says Berry. “But they’re being used in recruiting much less frequently.”
The slowing rocket
Base compensation levels have slowed their rate of acceleration. Research from people3 shows that salary increases are smaller now than 12 months ago. Berry says that last year’s typical salary increase of 7% to 10% is averaging 4% to 7% this year. So-called hot skills still command premium compensation. “The economic slowdown has impacted the job market, but there is still significant need to recruit, motivate and retain the best and brightest talent,” says Teresa Guelich, IT consultant for compensation consultants Hewitt Associates, Lincolnshire, Ill. “In the IT field especially, the scarcity of hot-skilled employees means the pay and/or perks need to be as competitive as possible.”
According to Hewitt’s data, salary increases for workers with hot skills are higher than ever, averaging a 7.5% increase over the past year, versus an average 5% over the previous year. But now, employers are insisting on track records and demonstrated skill, demanding more in terms of professional experience from the newly hired before shelling out the big bucks. “It used to be that employers would take anyone with a pulse,” says Berry. “If you could spell Unix, you had a job. Now, candidates have to have more proven expertise. Employers are becoming more selective.”
Most of the tech skills that are most in demand have application in e-retail, including , for example, PeopleSoft application development and data warehousing skills. Step outside of IT hot skills, and the employment and compensation picture looks somewhat different for the rest of e-retail. “Last year, e-retailers took people who didn’t have specific experience. In marketing, for example, they would take people who were bright and creative from related fields, such as in-store marketing or marketing for consumer package goods. If they had good credentials, they gave them a shot,” says Eagan. “Because of the huge demand, a lot of people got into it without real experience.”
But now they have the experience and many of the e-retailers they were working for closed or got absorbed back into a parent, creating a bigger pool of qualified applicants looking for jobs. As a result, e-commerce jobs that are less technology-based aren’t the focus of so much competition among employers. Again, compensation hasn’t dropped in that arena so much as have the number of available jobs.
Recruitment firms have a backlog of candidates, because employers aren’t filling as many positions as they were only a year ago. Some recruiters who had made a specialty of filling e-retail jobs have exited that specialty entirely. Ebiz People Inc., for example, a Salt-Lake City recruiter affiliated with MRI, had at one time filled e-retail positions for RedEnvelope.com, Sephora.com and Amazon.com.
Those with jobs are more inclined to hang onto them. Candidates have become much more wary about making job changes and less inclined to chase after riskier incentives associated with Internet start-ups. Until the end of last year, average turnover rate had been about 20%, with some jobs reaching 40% to 50%, says Berry. Now, it’s between 10% and 15%. “Only two years ago, people were jumping to dot-coms for the stock options. Now they’re looking for more stability,” she adds.
Incentives’ new look
A recruitment feature that reached its zenith in the boom days of Internet start-ups, stock options are still used for recruiting, but at many employers, they’re used differently than they have been recently. Companies are rethinking their practices with regard not only to the levels of options offered, but vesting schedules, says Bacon. At the height of the dot-com frenzy, some employers had shortened vesting schedules to use the options as a recruiting tool. The idea was to let employees get at their cash value earlier. “Now companies are reassessing that and delaying the vesting schedule again, and with good reason-it’s a long term retention tool and not just a short-term get-rich-quick scheme,” Bacon says.
With competition still intense for hot-skilled IT workers, fewer resources for hiring new positions across the board, and even the best non-tech professionals more willing to swap higher but riskier reward prospects for a measure of security, no single recruitment, retention or compensation strategy can serve a retailer’s diverse staffing needs. But recruitment and HR experts from IT and retailing say the market itself offers guidance on tailored approaches to staffing and retaining different job functions needed within e-retail.
For IT workers, it’s more about the thrill of working on the leading edge. In fact, in People3’s most recent compensation study, three factors-the opportunity to work with the newest technologies, training initiatives, and a challenging technical environment-ranked higher than competitive, market-based salaries as effective employee retention practices. But as Hewitt’s data show, hot skills are drawing top compensation anyway.