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Silicon Valley Talent Raid

Living in the Midwest all my life I have learned that most trends, be it music, fashion, slang, and yes employment, start on the coasts and act as a wave across the country and at some point make its way to the Midwest. By the time it gets here the wave or impact is not as big as when it started but well, you get it.

The downturn of 2000 took a while to get to Minneapolis and the impact was not as deep in comparison to other regions. In the same way the upturn took a while to get here too.

So having prepped this too much here is an article “Revenge Of The Nerds--Again" from Business Week.

Google and Yahoo have been raiding Silicon Valley talent to build up their engineer ranks. In the 2nd quarter Google hired 230 engineers. Yahoo has hired dozens more.

My how times have changed. As the article points out Microsoft and Sun Micro used to be the place for the cool techies to go. Now it’s the Internet search that is the next cool thing.

The culture of Google reminds me of the dot-com days with their roller-hockey games, gourmet meals, and digital toilets. Yeah, no kidding, Toilets with seat temperature. Ahh, refreshing…

Sorry.

Sure Microsoft has a lot of cash to pay top talent but it has sued Google and a former employee for breaching a non-compete clause.

The trend to watch is if Microsoft now starts raiding other companies to fill their ranks. If so, we could be off the races again like the late 90’s when recruiting and retaining was as much about foosball and designer coffee than it was about 9-5.


American Indians Entering The Outsourcing Game

I have had two posts on outsourcing to rural America, Outsourcing To Rural America and Outsourcing To Duluth?. This article from AberdeenNews.com talks about how the Oglala Lakota Sioux are doing quality control on data entry done in China for US companies.

This is another example of US companies paying a fair wage for work to be done here. Data entry is not the only work being done:

Ford Motor Co., Dell Inc. and Capital One all are interested in working with tribes instead of sending work to India, Ireland and the Philippines, he said. Language barriers, distance management issues and security-sensitive work that can't be sent overseas are all factors, Brown said.

"In many ways, American Indians are entering the outsourcing marketplace at a good time. There's plenty of work to be had, and for some CIOs the offshore honeymoon is over," he said. "They're looking for a low-cost and high-quality onshore option."

The Cedar Band of Paiutes in Utah is also tapping into government and commercial outsourcing contracts. In 2004 it did $14 million in revenue and 2005 is projected at $40 million.

Four reservations in Utah have created between 150-180 full-time jobs.


What Is The Future Of Outsourcing/Offshoring?

So many articles written by what seem to be intelligent people and so many opinions on the good vs. evil, right vs. wrong, is it sustainable or not.

We hear about offshoring being the new thing, we hear about salaries being driven down in the US, then we hear about baby-boomers retiring and the lack of workers will drive up salaries for the good, ones, but if there is lack of talent does that fuel the offshoring fire?

Ugh.

I confess, I don’t know nor yet have an educated enough opinion. Here is what I do know, if you are a tech person you really need to learn some business skills and vice versa.

Now that you feel enlightened by my simple theory here is some rhetoric from “experts”, or so they seem to think.

In this corner wearing blue trunks we have a study from McKinsey Global Institute written about in Inc.com. It says that by 2008 4.1 million service-side jobs will be outsrouced. They then mention 4.1 is out of 160 million. I grant that the study says 13% of IT jobs will be affected but I come back to how large in terms of % is the baby boomers in IT?

In this corner wearing green trunks we have an article from Outsourcing Journal questioning if offshoring is sustainable. While Indian firms margins are around 20% they are starting to deal with wage inflation and attrition. There answer to this is very similar to US firms years ago. They are locating offices to Tier 2 locations and reviewing business models.

In this corner wearing white trunks we have this Wall Street Journal article saying that projects are getting sent overseas to save money and time. Much of the work is automation and testing of the technology.

We then have a corner wearing red, whit and blue trunks, (getting the analogy yet?) from VNU Network in the UK. Prudential after benchmarking a data center deal with Cap Gemini is bringing the operation back in house. A consultant from Deloitte is quoted as saying some companies are realizing deals should never have been done in the first place.

Finally in the same corner we have this article from Legal Week. In an effort to keep tax dollars and jobs at home US state and federal laws are being passed limiting the amount and kind of outsourcing/offshoring that can be done. It will be interesting to see how these laws stand up to constitutional tests as stated in the article.

Moral to this story? I am not sure I have one. Maybe that common sense needs to be on the front burner when thinking about security, costs, time, etc.


Negotiating Your Worth

This article from CIO.com is a great reminder of how to do negotiate a compensation package. While the article focuses on CIO’s these tips are universal from the Help Desk to the CIO. In fact, these can be tailored for any position in any industry.

With all the talk about raising salaries and a tightening labor market, see yesterdays post titled IT Pay Increasing, Labor Market Tightening, this is a good primer on how to be compensated for your value.

Every one of the nine points is crucial in negotiating a compensation package.

Now the recruiter in me comes out. Please, please, please follow Phase Two #3:

Honesty pays: Over-inflating your current compensation is a novice error in negotiation. Instead, create a complete advance calculation of your entire package (benefits, accrued bonuses, base) and be able to articulate what works and doesn’t going forward. Wanting to increase your pay is assumed; waiting to see how the organization codifies compensation can be informative and favorable to you.

Take note of the last paragraph and the statement on doing your homework.

Book mark this article and send it to your friends.


CIO Pay: A Good Trend But Interesting Timing In Two Situations

I am all about any person being compensated as much as a market is willing to pay. It is about time that CIO’s are getting into the boardroom and involved in critical operations decisions. I am all for that. But talk about bad timing with public relations…

Baseline has come out with their 2005 CIO Compensation Survey. Worth noting that Northwest Airlines CIO, Philip Hahn, ranks 6th in compensation. He made a pinch over 3 million dollars in 2004. Not bad for a guy whose company is saying they need concessions from the labor unions to survive.

How ironic.

And then we have this story from Forbes on Randy Mott the new CIO of Hewlett-Packard who was lured away from Dell. $15.3 million, not bad for a guy who took a job and then in a matter of weeks his company announced the layoff of 15,000 employees, or 10% of the then workforce.

Maybe I am still jaded by the comments of Latrell Spreewell of the Minnesota Timberwolves last winter. He felt his contract with the Wolves should be redone. He said he needed to feed his family.

Huh, $10 million just did not seem to cut it.

I need to give the CIO’s a break. At least they are assisting in creating shareholder value.


IT Pay Increasing, Labor Market Tightening

There have been quite a few articles in the last 45 days written on the increase in pay and the number of available jobs for IT workers.

InformationWeek cites the Labor Department in June showing an increase in jobs created over the same period of 2004. The article states that some companies are still jittery about hiring so are doing more to retain their current employees including salary increases.

No large hiring increases are predicted but a continuation in moderate hiring is. A recent Foote Partners study has been mentioned in a few of these articles including CRM Buyer, SearchSAP.com, Computerworld, and NetworkWorld.

Foote Partners notes that offshoring is playing less of a role in pay and the number of jobs. They have found that many companies have not managed offshoring well and as a consequence are staffing more internally. Also, offshore salaries are increasing raising the overall cost of development.

A perspective from across the pond, read that as the UK, on the greater need of IT staff with business skills not just technical skills. The Silicon.com article suggests that it is time for the IT industry to “grow up” and start thinking about career paths and that many workers view IT as a job and not a career.

Datamation has this article on some of those in IT that have been left behind in the recovery of jobs and pay. While I am sure there are many stories such as those in the article there are more good ones than bad.

Scot Melland of Dice.com states job posting have increased 180% from July 2003 and that IT unemployment is at 3.7%, much lower than the 5.0% overall average.

That being said we are 20% lower in IT jobs from 2000. While that is a significant decrease 2000 was the height of the Internet bubble and it was unsustainable.

There is still a lot of contradictory information in these studies. Yes IT hiring is moving in a positive direction and salaries are increasing and no it is not like it used to be. I am reminded that the way it used to be, 1996-2000, was an anomaly and not at all consistent with historical patterns.

Hopefully we are back to normal growth and hiring patterns.


A Must Read Job Ad

This is precious. Clearly the owner of this anonymous posting on Craigslist has had enough of the many unrelated, not qualified, poorly written resumes with third grade grammar that were not spell checked.

I often get asked about horror stories I have encountered with candidates or hiring managers during interviews. I have stated before that I have been very fortunate, both good and lucky, to only have a couple of stories in eight years and nothing of significance worth sharing.

That being said, I can start sharing resume, cover letter, and email stories…