InformationWeek: The Business Value of Technology

hey studied hard for years and expected the business world to welcome them warmly, with open arms--and big job offers--upon graduation. Instead, the Class of 2001 is getting the cold shoulder.

Technology positions are getting scarcer, especially at the entry level, as spending slips and the economy slides. Graduating students entering the IT job market this year are learning a lesson they didn't hear in the classroom: In the world of work, nothing is guaranteed.

"Things were really starting to look ugly. I'd done all this work, I'd put out all of these feelers, and nobody was hiring," says Ian Rosi, a 35-year-old May grad of University of Texas at Austin's McCombs School of Business, known for placing IT-oriented MBAs in technology and consulting companies. Rosi's inability to land a job in technology-rich Austin was particularly hard to take because he was much better connected than most of his classmates and many older IT pros. Last fall, Rosi founded Austin Power, a glibly named organization designed to bring Austin's IT community together with MBAs who wanted to stay in the city to work. Austin Power was an initial success, professionally and personally, for Rosi: 200 MBA students signed up and were soon mingling with tech vendors still flush with cash.

Dozens of students indirectly owe jobs to connections made through the group, says Austin Power's CEO, Deborah Trominski, and even more found internships. Rosi landed a prestigious internship with personalization software vendor Vignette Inc. and made a number of other contacts while still a graduate student. "It kind of lulled me into thinking things were going well," he says.

When the fall recruiting season began, he didn't go on any interviews except for consulting firm McKinsey & Co., which approached him. After all, the Vignette people indicated that his position would turn into a full-time job when he graduated. As backups, he thought he was assured a job at software company Motive Communications Inc. and at venture-capital firm Austin Ventures.

But the tide turned quickly. In February, after Vignette was coy abut a permanent position, and Motive suddenly decided that Rosi--who has 10 years of Navy experience, mostly in IT, and two years at NASA--wasn't experienced enough, Rosi was nervous and ready to talk to Austin Ventures. But the VC firm's talent director never returned his call. If that wasn't enough proof that things had changed, Austin Power hosted a job fair that month and four of 10 companies dropped out at the last minute, saying they couldn't afford to hire.

Rosi's experience isn't unique: Good IT jobs for high-level grads are out there, but they're suddenly harder to find. After the feeding frenzy for IT help in the last two years, this year's grads have to hustle to find positions, and they may have to lower their expectations, too. Seemingly invincible IT leaders such as Dell Computer, Cisco Systems, and Intel are rescinding job offers made to students months ago. Some of those affected are Rosi's classmates, who have had to halt plans to buy homes as they try to nail down a job in Austin--or anywhere.

Other companies are taking less-drastic measures. Agilent Technologies Inc., an electronics and communication equipment maker, is including new hires in an austerity program that will cut all salaries by 10% for at least a few months. Consulting firm PricewaterhouseCoopers, traditionally a big college recruiter, hasn't rescinded any offers but has delayed them. Whereas recruits typically join the company in the summer following graduation, 300 new collegiate hires will join the firm gradually over the next six months. An unspecified number were pushed off until the first quarter of 2002. "Obviously, folks prefer to start earlier," says Matt Hamlet, Americas recruiting leader for PricewaterhouseCoopers. "But people would much rather know they're actually going to start." Staggering start dates means that PricewaterhouseCoopers doesn't have to absorb the cost of new hires all at once. It also means the firm can bring on new employees as it needs them for new projects.

While certain mainstay companies have slowed their hiring, indications are that others are looking for entry-level talent, and the best and brightest are still getting hired. A survey of 1,400 CIOs at companies with more than 100 employees released March 30 by RHI Consulting shows that only 3% plan to reduce hiring in the third quarter. Fully 24% plan to increase hiring, while 73% plan no changes to their hiring models. That level is unchanged from staffing levels the IT placement firm recorded during the past two quarters.

Nevertheless, RHI executive director Katherine Spencer Lee notes a slight drop in the number of entry-level hires. "There's a larger pool of available candidates, and it's taking people a longer time to find a job," she says.

Few college students are coming up completely empty-handed, though, and the slowdown is all relative. If IT grads are having a tougher time landing a job than last year, Lee says, it's still a lot easier than it was for IT people even five years ago, because demand is much higher.