Hiring within the technology industry has changed dramatically—the biggest hurdle isn’t finding the best talent, it’s often getting a new position or replacement employee approved by the executive level. CIOs are dealing with a new set of hiring parameters that typically focus on providing deeper justification of the proposed hire.
You may have to go to great lengths to get requisitions approved at all levels. I’ve seen situations in which the process reached the CEO level. Even if approved, many requisitions aren’t guaranteed. In one instance, the CEO reviewed all outstanding (previously approved) requisitions and then requested that all be resubmitted for new approvals.
CEOs and CFOs are also now getting involved in the details of offer packages—virtually unheard of just a few years ago. The concern isn’t who will be hired; it’s primarily a headcount issue or a compensation package review of IT positions in the $50,000 to $80,000 per-year range. The situation isn’t unique to IT, either—it’s a cross-organizational trend. While the manager and human resources staff may work out an offer that makes sense for the company and works for the candidate, the CEO or CFO may reduce it by $5 or $10K.
I’ll give some strategies for working through this type of hiring difficulty. The first step is understanding why the hiring environment has changed so dramatically.
How we got here
Why is this happening, particularly in companies that were previously known for their decisiveness? First, realize that the past three years never happened. Salaries were outside the norms, and promotions didn't follow any standard "rules." In fact, many people made up to 50 percent more than they would have made in more normal (pre-dot-com) economic times. Managers at all levels have reacted by taming expenses and matching them more closely to revenue levels.
Second, the headcount “tricks” that hiring managers formerly played don’t work now. As companies have reduced or eliminated funding for projects now considered nonessential, there is less ability to transfer people internally. In the past, even with headcount frozen, there were always other projects that needed staff. That generated movement that’s no longer available.
Third, the hiring timidity is symptomatic of a cautious marketplace. Everyone is nervous about expansion and hiring, even industry sectors that are still experiencing strong growth.
Tips for increasing the approval rate
Enterprising CIOs and hiring managers can avert and avoid this type of hiring roadblock on the corporate level. Try these approaches:
- Concentrate on finding new hires that are so talented and so exceptional that they justify the offer package. In these cases, it does become a decision based on the individual, taking it out of the headcount realm. The questions you must ask are:
- How realistic is it to expect that any offer package will be approved?
- How much of a superstar must the applicant be to justify an offer?
- Spend more time getting advance buy-in from all senior management. The hiring decision then becomes a top-down decision and is less likely to be delayed and debated.
- Aim for high-level positions. Amazingly enough, managers are sometimes finding it easier to hire staff at higher levels. More visible positions are easier to justify than the troops-in-the-trenches positions that will have no contact with senior management.
- Circumvent the headcount issue by hiring contractors.
- If your corporate organization is more focused on costs than headcount, consider the reverse—replacing contractors with salaried employees who cost less.
Looking to the future
Industry pundits expect the hiring situation to return to normalcy by the second quarter of 2003. Bear in mind, though, that we have defined “normalcy” as something more reflective of the pre-dot-com era than the immediate past. Here are three hiring trends you can anticipate:
- As the economy begins to expand, corporate priorities will change to accommodate increased demands. The challenge for companies will be to adjust their focus from cost containment to growth strategies. The danger is that the roadblocks that senior managers have installed to delay hiring may remain. These executives, often somewhat removed from the “hiring line,” won’t realize the immediacy of changing needs and may not loosen the reins sufficiently to allow hiring managers to move as quickly as they’d like.
- Even as the corporate culture begins to re-adapt, it will probably remain more structured than it was in the immediate past. This is a positive trend that will ultimately result in more professional management systems.
- Wise managers will become more proficient at presenting clear, compelling definitions of high-priority projects, distinguishing them from lower priorities that will not be funded. This will result in a green light for hiring at the high-priority level.
The swing in the pendulum
Managers and executives have learned their lessons from the past several years. The pendulum has swung all the way from a “run and gun” mentality to one of extreme caution, and may well stay there for some time.
The most successful managers and their organizations will understand the new realities and be prepared to apply the recent lessons of caution in a constructive manner. Incorporating more formal policies and procedures, in addition to eliminating the needless roadblocks, will allow companies to grow smarter and faster.