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Mad IT Hiring of 2000 Slows

IT worker demand has decreased from 2000 -- as evidenced by a dip in pay -- but companies are still short-handed

Mad IT Hiring of 2000 Slows - IT salaries have reportedly taken a slight dive, but demand for tech skills remains high.

The IT industry is still short approximately 600,000 workers, said META Group in its "2001 IT Staffing and Compensation Guide. " While this number represents a slight relief from the shortage of one million in 2000, the skills shortage is still severe in networking, database management, Web development, Java, wireless development, supply chain collaboration, business-to-business integration, and commerce chain management.

META Group advises companies to come up with effective policies for getting the most value from their human assets. IT organizations focus too often on technology and technical skills and overlook critical human factors, equally important determinants in the IT value chain. This focus on technical skills may be a factor in the decrease in concern about employee retention: While 77 percent of respondents in 2000 listed it as a serious problem, only 60 percent now believe they are overly concerned with retaining employees. Are IT workers now viewed just as technical skill sets that are easily replaced?

The META study also found that IT workers are realizing a widening pay advantage over non-IT workers. Of the 500 large American corporations surveyed, 68 percent pay IT employees 10 to 20 percent more than non-IT counterparts; in 2000, only 42 percent of companies did so. At the same time, IT pay is the biggest concern among corporations, followed by growing business and infrastructure development and creating and managing e-business applications.

Lower demand drives overall compensation down

IT pay rates may be leaving non-IT compensation in the dust, but salaries are actually down from six months ago. Due in part to the troubled economy and the failure of dozens of dot-coms, the pay decrease applies to all position levels in technology, from e-commerce specialists and services staff to CIOs.

Janco Associates, a management consulting firm that focuses on management information systems, reported in its "Mid-Year IT Salary Survey" that total compensation for IT workers has gone down. Benchmark salaries -- the total compensation required to obtain and retain top performers -- have seen no increases in the last six months, which hasn't happened since 1985.

CIO salaries at large corporations have declined 36 percent since mid-2000, while pay levels for CIOs at midsized companies have dropped 31 percent.

Janco attributes the trend to lower corporate earnings, the California energy problem (which affects the many IT firms near San Francisco), and IT head count reductions designed to boost earnings.

However, because of the economic downturn and dot-com fallout, the supply of senior technology executives is now outstripping demand in North America. As a result, the "total packages for CIOs will remain flat or go down until the end of 2001," says Janulaitis.

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