It's no secret that today's hiring managers need high-impact talent with technical skills and practitioners with domain and industry knowledge. However, the demand for these professionals is quickly draining the talent pipeline. Simply put, there aren't enough candidates with the necessary skills to fill the number of positions available in today's IT job market.
This shortage is leaving hiring managers hard-pressed to find candidates with the right combination of skills and industry expertise. As a result, they will be forced to wade deeper and deeper into the talent pool to find them.
Some factors contributing to the struggle to find top talent include the recent healthy economy and low unemployment rates. Last year, the domestic unemployment rate hit a five-year low. And this year will be just as robust, according to the Bureau of Labor Statistics. In January 2007, the unemployment rate was a mere 4.6%, with total employment hitting 146 million.
On the flip side, IT professionals now have the upper hand in this relationship. In a recent employer survey by CareerBuilder.com nearly half of the respondents said they expected to increase salaries this year. One-sixth of those surveyed said they expected the increase to be 5% or more. Still, many of today's hiring managers don't expect astronomical salaries and absurd perk packages of the dot-com era to once again become the norm. However, companies with the foresight to implement savvy recruiting and retention practices today will benefit as the IT talent pool continues to shrink.
It's simple supply and demand economics. With a limited number of professionals with technical skills available, hiring managers are forced to stretch their budgets and place an increased emphasis on wages and compensation packages to obtain top-calibre talent.
Wages in the Pressure Cooker
The demand for IT talent is growing at a steady rate, driving wages in the technology field higher each quarter. In fact, according to the U.S. Department of Labor, the technology sector is expected to grow at an average of 18% to 26% in the period from 2004 through 2014.
These numbers are in line with Yoh's research. The Yoh Index of Technology Wages, a quarterly compensation index that many Fortune 500 companies use to determine salary scales, shows that technology wages increased 1.2% by the middle of last year's fourth quarter and ended with a 3.1% increase in December, when compared to the same months in 2005. This rise is expected to continue through 2007.
By the end of last year, the technology sector continued to demonstrate solid year-over-year growth. What job seekers can expect in 2007 is strong demand for project managers, biostatiticians, business objects managers, firmware engineers, hardware engineers, Java developers, mechanical designers, Microsoft developers (.Net, C#), Oracle consultants, Oracle database administrators, SAP consultants, SAS programmers and systems architects.
As new technologies continue to enter the business world, the demand for these skills will continue to grow this year and beyond. Therefore, wages will continue to increase as hiring managers put a premium on candidates with these maturing skill sets. One recent example is the SAP and Microsoft co-launch of Duet, a software application so new that it has relatively few practitioners thus far. With SAP technology constantly evolving and new upgrades introduced regularly, practitioners with domain experience and the skills to plan, build and maintain these systems will be in high demand and will help drive wages upward.
In addition to strong IT backgrounds and extensive industry experience, experience in handling crisis situations will be another characteristic driving candidates to the top of the resume stack and wage pool this year. In today's competitive job market, those who demonstrate how they have helped organizations meet and overcome crises will have a strong upper hand.
One final factor to consider is demographics. As baby boomers near retirement, we will see organizations and hiring managers looking to quickly fill positions. However, with more and more college students not pursuing IT programs, the demand for skilled talent will skyrocket.