Phoenix Rising: Not All Dry Land and Desert

BOSTON (05/15/2000) - If you think of Phoenix as an arid desert town with little to offer, start reconsidering. Although it's hot as blazes there, so is the job market, with 60,000 new residents per year and a steady unemployment rate of 2.9 percent, according to a market report commissioned by the Greater Phoenix Economic Council.

Increasing industrial and high-tech activity has been acting as a magnet, drawing even more companies and employees to the region. With plenty of work and a low cost of living, Phoenix has become more attractive to information technology experts.

Technology, in one form or another, has been a part of Phoenix's business landscape for many years. Starting with New York-based American Express Co., which established its worldwide processing center in the area, and reaching a peak in the 1990s, Phoenix has become one of the capitals of the back office.

Forest City, California-based Visa International Inc. also does its processing in Phoenix.

Weather is a big reason: The area doesn't experience tornadoes, snow or other climatic shakedowns that can cut power and render a processing center useless.

"It's not known as a headquarters office location," says Tom Graunke, CEO of KnowledgeNet Inc., a Web-based IT training firm. "But the size of businesses that are here is impressive. What that has done is create a talent pool."

Graunke says he's had no problems filling IT and technical positions, but his company of 285 employees has seven people recruiting candidates. It typically takes two months to fill a job opening, he adds.

Although corporate headquarters may not be a mainstay, Avnet Inc., MicroAge Inc., Phelps Dodge Corp. and Allied Waste Industries Inc. - all Fortune 500 companies - have their main corporate offices in the greater Phoenix area.

Other companies with a major presence include Intel Corp., Honeywell Inc., Motorola Inc., The Dial Corp., Citibank, AlliedSignal Inc. and US West Inc. The dot-com presence, although growing, isn't yet a major factor in the economy.

The Hiring Picture

Finding IT professionals is never easy. Even the companies that claim they have an easier time of it than others often bring some percentage of workers in from out of state.

"Hiring capable software talent or any other technology expertise today is difficult, no matter where you go," notes George Wallner, CEO of Hypercom Corp., a $350 million provider of electronic payment systems and telecommunications equipment.

Wallner has to look both locally and out of state for employees, with software engineers experienced in C++, Visual Basic and HTML key targets. Particularly difficult to find are project managers who can handle an entire project, from learning the business requirements to its completion.

Money Matters

If there's any bad news, it's that compensation is probably a little lower than national averages. "We're relatively comparable [to other areas]; perhaps a little bit less," says Rob Owen, vice president of IT and the information systems group at Microchip Technology Inc. in Chandler, Arizona.

Owen says salary ranges are broader now than they have been in the past and that both employers and employees should plan to be flexible. He says that ideally, he would like candidates to be "highly skilled in IT, then with a strong background in semiconductor manufacturing." But he concedes that such candidates are scarce.

The good news is that expenses are low, so employees may keep more of what they earn. Housing is relatively inexpensive, with a median home sale price of $126,500 last year; the U.S. average was $133,300 during the same period, according to the National Association of Realtors in Washington. Property taxes on a typical home could run from about $1,580 to $2,530 per year. Last year's personal income tax rate was a graduated amount that topped out at 4.72 percent unless an employee earned more than $150,000 annually.

Housing is plentiful, so employees can live near their workplaces. That's good, because the greater Phoenix area is comparable in area to Rhode Island, and driving from northern locales to the south can take 60 to 90 minutes.

Phoenix itself may be in the middle of scrub desert, but mountains with standing lakes and trees are within a two-hour drive. The weather ranges from shirtsleeve temperatures in the winter to summer averages well above 100 degrees.

Public schools are ranked above the national average, with a pupil-to-teacher ratio of 18.6 to 1.

Sherman is a freelance writer in Marshfield, Massachusetts.

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