InformationWeek

The survey also queried workers about contacts from headhunters, and found that staffers and managers involved in enterprise application integration, the Internet or intranet, and ERP projects are the most frequently contacted. Recruiters are also after IT professionals experienced in application development, security, and data management.

As more companies move to Internet distribution channels, everyone pursues the security experts, says recruiter Range. "You can't open the newspaper without reading about online break-ins," she says. "That's why salaries are so high."

Meanwhile, the biggest yearly raises in total cash compensation went to Internet and intranet experts, with staffers getting a median 10.9% raise and management a 12.5% raise. Paul Daversa, president of recruiting firm Resource Systems Group in Stamford, Conn., says the growth of E-commerce and E-business on the Internet will drive the future of IT staffing. "The people most in demand are people with experience in business-to-business software companies or corporate entities that have those functions," he says.

Rowley of Matteson Partners.com also says the hottest jobs will be closely linked to E-business, particularly projects that seek to improve customer satisfaction such as faster delivery of goods through supply-chain management. "Everyone is trying to figure out how to better process the layers to get to the consumers," he says. "It's an area that will only continue to grow."

Even though demand is high, ERP experts received some of the smallest raises: 7.3% for staff and 8.3% for management. Observers say raises were abnormally high in ERP a year or two ago because the shortage of skilled ERP experts was at its most severe, and competition for these people was especially fierce. "Supply and demand pushed their compensation through the stratosphere," Management Recruiters International's Russel says. He says raises in ERP jobs are leveling off to a more reasonable level. "You can only get 10%, 20%, 30% raises for so long."

The relatively harmless passage into 2000 has also shifted IT priorities. Last year, IT pros with sharp Y2K remediation skills could demand big bucks. This year, the skills needed to adopt a company's core business operations to the Internet reign supreme. Toyota's Cooper, who oversees 450 IT staffers and 500 IT contractors, says a range of IT skills are most valuable as companies move into E-business. She says E-business has become increasingly important for the automaker during the past six months. "There's been pent-up demand for new business applications," she says. Before, it was a very discrete set of services; now the company finds it needs hybrid skills. "We need a bridge between telecom, Windows NT servers, application development, and people who know how to architect," says Cooper. "There's a rush to E-commerce--it's put lots of pressure on IS."

The move to E-business also puts pressure on IT managers who are trying to recruit from a limited talent pool. Larry Silverman, director of Internet operations of Rand McNally & Co.'s 7-month-old E-commerce division, plans to build his IT staff from 15 to 60 people by year's end and says nothing in talent-hunting beats a personal recommendation. "Personal networking is the best way to find people," he says.

Depending on the position, Rand McNally pays employees $6,000 to $12,000 for each successful referral. Silverman's group also uses an outside recruiter who combs the Web for candidates. He's also had success finding full-time workers through IT contract agencies. "When we tell them we're not hiring any more contractors, they try to fill our needs--and get those referral fees--by finding permanent hires," he says.

Silverman suggests that managers who try to play the money game with workers won't win in the end. "Someone who does it only for money is going to jump ship at the first sign of greener grass," he says. "Give me someone with passion, who really appreciates the opportunity and wants to be part of something big, or because they want to learn a ton in an exciting environment, or because they're out to make a mark--I'll find a way to challenge them," he says.

Silverman's views about salaries may be idealistic, but his point about worker retention is a good one. As they did last year, both IT management and staff say professional challenge is what matters most by far.

However, the InformationWeek survey finds that companies do a much better job of attracting employees than retaining them. While 45% of IT professionals say their companies are good or excellent at attracting talent, only 38% say they know how to retain it. And 29% say their companies are poor or unsatisfactory at retaining employees.

While turnover is common in IT, the survey indicates signs of improvement in this area. This year, the typical IT staffer has been at his or her job three years--and isn't planning on going anywhere for another two years. The typical manager is four years into what he or she expects will be a seven-year tenure. That's up from last year, when IT staff stayed in their jobs only four years and management stayed five. That suggests either companies are becoming more attentive to the needs of IT workers--or that the workers themselves are doing a better job of selecting the jobs that meet their needs.

Still, headhunters are on the prowl: 64% of IT staff and 70% of IT managers say they've been contacted by a headhunter in the past 12 months. Those percentages are down slightly for staff compared with last year (69%), and the same as last year for managers. Those successfully recruited to a new company in the past year say they've been contacted about three times a month over the past six months. Most of the IT professionals interviewed for this article also reported three or four calls a month; from the recruiting side, Rowley says he talks to 100 to 150 candidates a week.

For Toyota's Cooper, employee retention occupies much of her energy. "We have to work every angle and be very creative" to keep IT talent challenged and happy, she says. Professional development initiatives, such as the company's University of Toyota, offer leadership training for IT professionals, where staffers from disparate IT groups work together on projects across the organization.

Two months ago, Cooper started a "GenX team" focus group to understand what's important to younger staffers. Young IT pros feel a generation gap with staff who are 10 to 15 years older, she says. "They're not interested in everyday or ordinary. They want to live for the consumption of new," she says. "Such is the seduction of the dot-com world."

International travel is appealing to many young people, so Cooper has made it a priority for IT staff development. "Years ago, only senior management would go to Japan. Someone could be here 20 years and still not go," she says. "Now I'm allowing younger staffers to shadow our senior people, learn how the company really works, and be in a foreign country. You won't get that in a 24-by-7 dot-com job."

The majority of respondents say they're satisfied with their current jobs and aren't looking elsewhere. Despite the recruitment activity, only 8% of staff and 7% of managers are actively looking, while 40% of staff and 36% of management say they might consider a new job if someone brought it to their attention.