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In Search Of Talent

After years of weakness, there's reason to be hopeful about tech employment again. The clues? Selective raises, talent raids, and headhunters.

With Google and Microsoft fighting over who has the right to employ him, Kai-Fu Lee can officially consider himself a hot commodity. And with Hewlett-Packard's cost-cutting CEO, Mark Hurd, throwing a $2.2 million signing bonus his way to jump from Dell, CIO Randy Mott is hot, too. (And on the hot seat.)

Most of us aren't in such great demand. Yet what's happening in these cases--companies upping the ante to get the IT talent they really want--is showing up at other levels of the IT org chart. After several years of slump, the U.S. IT job market is showing some life, at least for the right people with the right skills and experience.

Lee's jump to Google caused Microsoft to say he violated a noncompete agreement. -- Photo by Sipa Press

Lee's jump to Google caused Microsoft to say he violated a noncompete agreement.

Photo by Sipa Press
"Prices for talent are going up," says Jerry Batt, CIO and VP at Pulte Homes Inc., a home-construction company that's been growing its IT staff about 15% annually of late. Pulte Homes isn't increasing pay across the board, something companies had to do in the '90s to keep IT talent. Instead, it has sweetened the pot for a few individuals with select skill sets, like .Net developers, who are particularly hard to find in Phoenix, where the company does much of its development work.

This isn't a swift tide lifting all boats. Offshore strategies still are moving IT jobs out of the country, while layoffs at places like HP push hundreds of other IT pros onto the street. The majority of the 14,500 layoffs Hurd revealed last week will come from IT, finance, and human resources.

Yet offshoring isn't dragging down pay for key IT talent in the United States like it was a year or 18 months ago, contends a new study from research firm Foote Partners. Pay for U.S skills such as application development and database knowledge had been eroding 7% to 10% annually. Now people with those skills are gaining back those losses, says David Foote, president and head of research for Foote Partners, which collects data from human-resources, IT, and business execs. In the first six months of this year, Foote found that pay for networking skills had jumped 5.1%; database skills, 4.3%; and application development, 2.1%. Overall, pay for 89 noncertified skills grew 3.8%. But big bucks aren't raining on every skill set: Pay across 87 certified technical skills crept up just 1.3%.

Companies show few signs of easing up on offshore outsourcing. But the trend may be fueling demand for managers as companies realize how easily offshore projects can sour. That demand could help maintain upward pressure on the pay premium for noncertified skills. "Risk aversion is very popular right now," Foote says.

IT workers have lived through a brutal shakeout the last few years. There are 25% fewer programmers employed today than four years ago, Bureau of Labor Statistics data shows. That's 180,000 jobs gone, forcing people to change roles or leave the IT workforce. But the picture looks better than it has in a while because the number of IT managers, engineers, database administrators, and network and systems administrators with jobs has grown. Total IT employment reached nearly 3.43 million in the second quarter, 3.9% higher than a year earlier. That's the highest number of IT pros employed since 2001.

There's even the occasional perk these days. Silicon Valley-based NetSuite Inc., which competes with Inc. in on-demand applications for small companies, recently sent its director of Web operations and his family to Hawaii, CEO Zach Nelson says. The company also opened a second operations center in Toronto, where it's easier to get and keep talent. With 500 employees, Nelson knows the tech industry's penchant for talent raids.

That's what happened with Mott, who left Dell after five years as CIO to take the top IT job with rival HP. And the hiring of Lee turned the simmering battle between Microsoft and Google combustible. Microsoft last week sued Google and Lee, a top researcher who started Microsoft's Beijing research center, for violating his noncompete agreement. The suit hinges on two explosive areas: Internet search software and China. Google hired Lee to start up a research-and-development center in China, and Microsoft claims he takes knowledge of its trade secrets with him. Google has countersued.

There's a lot of other hiring activity these days that doesn't get the same level of visibility. Companies are calling on recruiters to fill chief technology officer, IT security director, and head of IT architecture jobs that are a step or two removed from the CIO, says Beverly Lieberman, president of executive-recruitment firm Halbrecht Lieberman Associates Inc.

Intermountain Health Care Inc. CIO Marc Probst brought in Kevin Smith, a former consultant and tech startup CEO, as director of IS business operations. "He makes my life bearable," Probst jokes. Still, Intermountain is feeling the talent squeeze. It's working with GE Healthcare to develop a new generation of clinical software, an effort that will create at least 80 IT positions. The health-care company needs database administrators, systems analysts, application developers, and quality-assurance specialists. Probst estimates it will cost 15% to 20% more than the company thought three years ago to fill all those slots.

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