InformationWeek

November 1, 1999

How IT Departments Can Fight Back
By Teri Robinson

urnabout is fair play, as the saying goes. So it's only right that while the new-media blitz is great for IT executives seeking jobs, once on the job they have to figure out how to attract and keep valuable IT professionals on their own staff.

Hiring managers have to strike fast and offer high salaries, or at least creative compensation and incentive packages, to avoid hemorrhaging IT talent and to draw new hires into the fold.

"Total compensation, salary, and stock have to be creative or you will encourage employees to leave," says Lauren Day, manager of the permanent staffing division at the Eliassen Group.

But a bidding war over candidates can drive salaries past prudent limits and send expectations into the stratosphere. It's still the rare case where anything goes when it comes to salary negotiations, and there's already some backlash to the exorbitant compensation packages that abound. "I'm a little disturbed at the level of people expecting equity as part of the deal," says Mark Powers, newly appointed chief technology officer at Pseudo Programs Inc.

Although he was given an attractive stock-option plan, Powers sees things getting out of control. "People come in with three to four years' experience and want $90,000 and stock. I say it's more like $60,000, and I may consider stock as a present one year from now."

David Garfinkel, VP of human resources at Datek Online, refuses to get into bidding wars. Instead, he extends what he hopes is an attractive, one-time offer to a candidate and waits for someone to accept it.

Retention is the flip side of turnover. "Until now, we have had to balance how we're compensating original employees with what it will take to recruit new talent," Powers says.

Day says employees may use a new hire's salary as an incentive to seek other offers or as leverage to get a greater counteroffer if they do decide to leave. But they have to be careful the plan doesn't backfire.

A valued IT professional who gets a job offer for $20,000 more than current salary may get his employer to make a counteroffer, but it can leave a bad taste, Day says. And it also sends a signal that the company becomes reactive about its staff.

Day says companies should take a proactive stance, instead. Pseudo, for example, does internal audits to ensure equity. "Almost everyone in the tech division has gotten a raise in last few months," Powers says. "We had to adjust the salaries of old-timers to be on par with newcomers."

The biggest obstacle to successful hiring may not be getting the dollars in sync, but, rather, getting job-seeker and hiring manager in sync. "Most people move every three to four years, so neither side is an expert at what is happening," says Stacy Hayes, managing consultant for the IT practice at the McCormick Group, an executive search firm in the Washington area.

In addition, personalities on a team must mesh, says Pseudo CEO Lawrence Lux, who brought Powers on board. A lot can be determined by looking closely at a candidate's employment history. While candidates who have stayed with the same company come under close scrutiny, so do those who move around too frequently. Says Hayes, "It's like going from one spouse to the next. You're not building a base for the future."

return to "New-Media Companies Come Calling"

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