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January 4, 1999

Staffing
Talent Hunt Gets Hotter

Companies strive to find technology workers as demand continues to outrun supply

By Marianne Kolbasuk McGee

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hen the year 2000 marathon winds down next year, lots of talent will be freed up to staff other IT projects and support day-to-day operations. But IT managers, recruiters, and human resources specialists say those people won't be enough to ease the current staffing crunch.

"Year 2000 will have an impact as work is finished, but not much of one," says Dana Milner, director of staff development at the Home Depot in Atlanta. "The industry isn't producing enough new people."

The Information Technology Association of America, an IT professional organization, estimated last spring that there were nearly 350,000 unfilled software programmer, engineer, and analyst positions in the United States. That number would have been doubled if positions such as network specialists, help-desk personnel, and other IT jobs had been tallied, says ITAA president Harris Miller. Supply has improved somewhat, he says, but the demand continues to escalate.

Some freed-up year 2000 staff will go back to their old responsibilities. But others will go to new projects where they'll require training. "It will take a while to transition these people's skills," says Nick Vitalari, executive VP at Concours Group, an IT consulting and research firm.

Internet skills will be highly sought after. "Java, Web-centric skills will be very hot," says Mike Prince, CIO of retailer Burlington Coat Factory. Other areas with sought-after IT skills in 1999 will be networking, Windows NT, enterprise resource planning, database, client-server computing, and legacy systems.

pie chart

While some companies are seeking a few specific types of IT talent, others are searching for an array of skills to staff new project needs. "We're looking for people across the board," says Home Depot's Milner. The new hires will include people with SAP skills, because the company is about to launch an implementation of SAP financial and logistics software. Overall, Milner says, Home Depot expects to add as many as 180 people to its current IT staff of 830.

Federal Express Corp. seeks to add as many as 500 people to its 4,500-person IT staff. The package-delivery company needs skills in mainframes, project management, Web development, and database administration, says Julie Yancey, FedEx's managing director of development services.

Another trend that will continue, says Concours' Vitalari, is companies seeking candidates with a solid mix of technical and business skills.

General Motors Corp. has outsourced many IT operations to service providers such as EDS. As a result, most of GM's 1,800 IT employees need skills that go beyond technical know-how. "We are looking for people with good project-management, consulting, communications, and other business skills," says Priscilla King, personnel director of GM's IS and services group.

Health services provider United HealthCare Corp. in Minneapolis will be hunting for Internet developers and security experts, says CIO Paul LeFort. "The hardest thing to find is security people who have multitier experience--Web to legacy," he says.

The average starting salary for IT professionals is expected to rise more than 7% in 1999, compared with a 3.5% increase in 1998, says RHI Consulting, an IT staffing firm in Menlo Park, Calif. Programmers, database administrators, and Web developers will see the biggest gains in base compensation, says RHI.

More Than Money
But coping with the skills shortage goes beyond money for many employers. Career development, training, and work environment are key to attracting and retaining IT talent, they say.

"Competitive compensation is only part of the picture," says Burlington Coat Factory's Prince. "Our goal is to make our company a rewarding place to work through training opportunities, flexibility, and family-oriented programs."

bar chart

GM will continue to expand its distance-learning programs to train IT and other employees via satellite, says King. Home Depot's policy is to ensure that its IT people are well-rounded and flexible so they can move from project to project. Home Depot expects its IT staffers to be flexible and open to learning new skills. It supports that through training that includes classroom instruc- tion, computer-based lessons, and hands-on training. "We do whatever training is necessary to get people up to speed for the projects we need to do," Milner says.

FedEx and Home Depot also are building facilities dedicated to their IT staffs. Federal Express has already moved in about 200 of 3,000 IT workers that will be housed at a 100-acre IT campus in Memphis, Tenn. "We've tried to make our [IT environment] a place that's casual and comfortable and supportive of teamwork," says Yancey.

By year's end, Home Depot will begin moving its IT staff to a 19-story building in Atlanta. The IT staff and operations are now scattered at facilities around the city.

Concours' Vitalari also expects more companies to focus attention on developing "bench talent" for CIO successions. GM plans next year to enhance career development programs for aspiring project managers and CIOs, says King--and hopes to develop and promote more top IT talent from within.

Some top IT employers are already doing this, says Vitalari. When longtime Sears, Roebuck & Co. CIO Joseph Smialowski left to take the top IT job at BankBoston in November, Sears named VP of logistics Jerry Miller as his successor. "One of Smialowski's legacies at Sears was developing the company's top IT talent," says Vitalari. "You'll see more companies doing that in 1999."

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