InformationWeek

IT hiring at Hilton will also be more selective this year, Harvey says. Projects are categorized as strategic or day-to-day; the strategic projects--improving customer services for instance--get higher priority and funding. If necessary, hiring for day-to-day projects will be delayed, Harvey says. Still, that doesn't mean Hilton will be shortchanging IT service and support functions. "The people who carry beepers 24-by-7 are always important to operations," he says. "We can never have enough of them."

Salary generally tends to be a lagging indicator of the economy because compensation packages are usually fixed for about a year. Last year, many companies kept upping their offers to attract and keep much-needed IT talent, making the figures unrealistically high in some cases. "Over the last 14 months, we overcompensated people," says Paul Daversa, president of Resource Systems Group Inc., an IT search firm in Stamford, Conn. "Salaries will start to stabilize as in the pre-Internet times."

Seth Harris, managing director of technology and venture practice at IT search firm Christian & Timbers' Boston office, also sees the dot-com fallout flattening salaries. But demand for the highly trained will stay high. "Companies will still pay for stars," he says, and for people with specialized skills such as those Hilton seeks.

Among those who benefited from the boom times is Clare DeBoef, CIO of Provider Solutions Corp. in Tampa, Fla. He joined the privately held health-care software and services provider in December after leaving a job as a senior IT manager at a New Orleans education software maker. The job at Provider gave DeBoef a hefty 25% hike in pay, plus stock options. The 34-year-old now earns between $100,000 and $150,000, and he's glad he made the move when he did. He knows that the IT job market is tighter than it was just a few months ago.

As an IT professional, DeBoef is acutely aware of the changing technology-employment market; as an employer and CIO, he's looking to benefit from it. "Things have slowed down quite a bit since December," he says. "But the downturn makes me feel more confident that I can retain my people." Unless there's a major recession, there won't be significant changes in salaries or the ability for IT workers to find jobs, DeBoef says. "I don't think there will be a talent overflow. The demand is still there."

But demand is shifting. For the past few years, IT employment was fueled by the shortage of talent. With demand unlimited, salaries could only go up--and steeply. Today, some 425,000 IT jobs remain unfilled, though that's half of last year's 850,000 vacancies, according to the Information Technology Association of America, an IT trade group in Washington. Most companies have slowed the number of IT projects they're doing. "It was nutty there for a year or two," says ITAA president Harris Miller. "IT managers are taking a deep breath." Still, while Miller says he's pleased to see the supply-side increase, he's not happy to see demand slowing. "It's a mixed blessing," he says.

Most of the changes are subtle. For example, IT staff and managers are working longer hours for their pay. On-call hours have almost doubled in the last 12 months, to 25 per week for managers and 24 per week for staffers, the survey indicates. The second shift might be explained by companies' reluctance to add staff during difficult economic times, as well as the difficulty of hiring people with highly specialized skills. The average IT staffer works 45 hours a week, survey respondents say, while managers log a median of 50 hours per week, excluding on-call time.

It seems that employers are beginning to regain control over compensation packages and the hiring process. Prudential's Landon is still looking for people with "E-skills" and hasn't seen big changes in salaries in her industry compared with prior months. What she does see are more people available for each opening--and fewer of her own employees willing to jump ship to startups. That means more stable staffs. In all, 47% of survey respondents rank job stability as one of their most important job-related issues (see WorkLife, "Salary Survey: Reporter's Notebook").

That stability is apparent at Washington mortgage lender Fannie Mae. Last year, 11% of Fannie Mae's IT workforce left for other jobs. But during the first three months of this year, the company, which had net operating income of $4 billion in 2000, saw its projected annualized attrition rate cut in half to 5%, says chief technology officer Julie St. John.

St. John is glad that her workforce is settling down. In recent months, she hired back about 15 people who had left Fannie Mae over the last year or so to take jobs at dot-coms. "They were all good performers and left on good terms," she says. Those people left in hope of striking it rich, but St. John hired them back at the same salaries they were making before they left. "I don't feel comfortable raising salaries [for returnees] beyond those of the people who stayed and walked through walls for me," she says.