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Archive - 2012 Houston IT Hiring Trends

By James Del Monte, JDA Professional Services, Inc.

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At-risk Compensation is Key as Demand Exceeds Supply
A new trend emerged across various IT firms through 2012 in response to the massive amount of layoffs and downsizings that occurred over the 2009-2010 recession. Many companies began to incorporate a move towards total compensation packages in which all benefits, bonuses, and perks are factored in with base compensation. These at-risk packages offer incentive-based compensation and additional perks that extend beyond cash-based bonuses and are used in opposition to just a base salary.

Through 2012, we have seen demand for good IT workers at an all-time high. Firms have posted pay increases of 3-5 percent. However, the supply of new workers is nowhere near matching the level of demand. As such, companies are practically obligated to offer an additional 10-40 percent to attract top talent.

This discrepancy is causing existing staff to look elsewhere; thus we have the beginnings of employment churning. Existing employees are seeing their peers receive substantial pay raises while their pay increases are merely in line with the 3-5 percent rate of inflation. Many IT professionals are therefore being lured away from their current positions. In addition, we are also seeing companies embracing new strategies involving total compensation which includes base salary, various forms of bonuses, stock options, vacation time, flexible schedules, and virtual working among other perks in attracting the right person. This at-risk compensation has even become prevalent among staff-level employees.

This is a time reminiscent of what we saw with the .com bubble and Y2K bug back in 1999/2000. New IT staff was brought in at unprecedented levels, and the best were offered large pay increases to do so. Over the past ten years, the focus on efficiency in IT has resulted in significant improvements to the fields of supply chain management, operational management and reporting, and customer sales and interaction. The value of IT has risen substantially from a strategic perspective leading to an increased dependency in today's businesses, especially with an industry-wide focus on new technologies such as mobile applications and cloud computing.

These new technologies have changed the business landscape. The wide usage of smartphones and tablets, both personally and in business contexts, has become an indispensable tool in the methods by which many companies do business today. This reliance on portable technologies is becoming the standard by which companies are judged and in the next few years, is projected to become an even more critical component. Implementing support and accessibility has driven demand for IT professionals at all levels well beyond the current supply.

Demand Exceeds Supply
College enrollment in IT-related fields is only 40 percent of what it was in 1999/2000. Demand, in addition, is substantially higher today, especially as baby boomers retire. Both of these coupled with the fact that upwards of 95 percent of IT professionals are currently employed show us a rather difficult issue emerging. There really aren't many good people out there. This presents quite a significant challenge. How are companies going to find and retain top IT talent? In short, there is no simple answer.

In a recent survey conducted by JDA, 55 percent of companies are planning to increase their level of staff in 2012. On average, the increase will be between 3-7 percent. However, with only 5 percent of firms indicating a decrease in their staffing levels, where will these people come from?

Even with many Houston businesses embracing a global and offshore workforce, reliance on this to offset the shortage proves, in many cases, ineffective and inefficient. Recent increases in wages and international turnover suggest it may not be as cost effective as previously considered.

The fact is there are no new people right now to fill these gaps. Again, parallels can be drawn to the .com bubble/Y2K hiring frenzy that occurred in 1999. The distinction comes with the corollary that the trend emerging today is an increase in productivity, as businesses get far more output with each work hour. This is spurred as a result of technology and will continue to drive demand for more skilled workers.

How JDA can help
With over 30 years of experience actively recruiting IT professionals in Houston, JDA is a great resource to indentify and recruit the passive job seeker either full-time or on a contract basis.  For more information on how we can help you build a great IT department, contact James Del Monte at 713.548.5444 or jdel (at) jdapsi (dot) com.

About the survey
The results of this survey are based on the collective input of over one hundred of Houstonís CIOs and IT Directors from companies spanning across a variety of industries and various sizes, from Fortune 100 to small and midsized businesses.

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