Neal Kaderabek doesn’t expect to hire any new staff to boost his 50-person IT department next year. Instead, he plans to rely on contractors to fill any new technology needs at the Wisconsin insurance company.
In fact, Kaderabek, director of IS at WEA Insurance Corp. in Madison, WI, hasn’t hired a full-timer since 2000. And he’s apparently not alone: 86 percent of CIOs nationwide don’t expect any staffing changes in the first quarter of the year, according to a recent survey by Robert Half Technology.
Only 11 percent of the 1,400 CIOs polled plan to add staff in Q1 of 2003, while 3 percent plan to cut staff. That 8 percent net increase is unchanged from the last quarter of 2002, according to Robert Half Technology’s numbers.
“In past years, if I’d lose a network person, I’d just go and hire another network person,” Kaderabek said. “Now, we’re trying to be more flexible, so if I lose anybody, I take a look at my inventory of things that need to be done in the next three, six, or nine months, and take a look at what skills I really need for those projects, and then contract in those skills.”
Contracting a popular option
Hiring contractors makes sense for Kaderabek, not only because it may save on the bottom line but because it provides more options. In the past, internal skill sets sometimes dictated IT architecture decisions, he said. Using contractors allows the company to do projects “the right way, the way we really want them to be performed,” he said.
Lisa Verde, director of recruiting for Matrix Resources, which offers IT recruiting services, said contracting on a per-project basis and contract-to-permanent hiring are popular strategies with clients. Matrix Resources has six office locations (Dallas; Phoenix; Atlanta; Research Triangle Park, NC; Birmingham, AL; and Bedminster, NJ).
In 1999, at the height of the dot-com boom, Matrix was placing two to three contractors for every permanent position in its Atlanta market. Now, the contract placements outnumber the permanent hires by a five-to-one ratio.
“For companies, right now, to make a hiring decision, it’s easier for them to hire a contractor,” Verde said. “The contract-to-perm trend has been really strong for us this year. Our clients like contracting if they need a project done, or if they want to reduce the risks of making a bad hire.”
Some still looking to hire on
Howard Kelman, IT director at Boston-based Lahey Clinic, is bucking the contracting trend, at least in a small way. He plans to add four or five IT workers to his staff of 110 in 2003. The hires will be tied directly to the 40-plus active projects in progress, he explained.
Kelman doesn’t often advertise when he needs staff. Last year, when he advertised for a PC technician and a help desk opening, he received 150 to 200 applications for each position.
“When we make it known that we’re hiring, we get swamped with paper,” he said. “It a rare occasion that we make it public—we go searching for people.”
The hiring outlook
Kelman believes the IT job market will pick back up in six to nine months, and Matrix’s Verde is hearing similar predictions from her clients.
“The feedback we’re getting from clients is more hiring in the last six months of 2003,” she said.
Verde noted that she had not received any indication of salary increases, however.
The Robert Half Technology survey predicts starting IT salaries will drop an average of 1.3 percent in 2003, compared to a .1 percent increase forecasted last year.
As a result, Verde says IT workers have to be flexible, both in the kinds of jobs they take and the salary options.
“Contracting is definitely a very strong market right now,” she said. “But that market is getting a little tighter, from a dollar perspective. We’ve seen rate decreases in contractors anywhere from 10 to 20 percent.”
Laurie Prochnow, president of the Wausau, WI, office of Management Recruiters International, is a bit more optimistic than Verde. Prochnow, who specializes in IT recruiting for the Midwest, said she’s still seeing some salary increases, although the range is from 5 to 10 percent, instead of up to 15 percent.
Especially hot are IT jobs dealing with security, such as data security analysis, systems security administrator, and network security, she noted.
For CIOs, the current job market means more candidates to choose from. Prochnow warns applicants that some companies are getting upwards of 100 candidates, and a couple of dozen strong candidates, for every open position.
“They [CIOs] have the luxury of having 30 candidates to choose from, to narrow that process down to the best ones they want to hire,” she said. “Whereas in the dot-com era, they were lucky to get four or five candidates to look at, and in some cases, they hired someone who was average because they couldn’t attract that high performer.”
And despite the Robert Half survey results, Prochnow believes a hiring turnaround may come well before next year ends.
“What we’re seeing right now in the marketplace is a lot more optimism. We’re seeing a lot of companies that are saying they’re going to be doing some hiring into the new year.”