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Study: Skills Shortage Boosts Salaries

An annual study on hiring and compensation trends revealed that IT professionals may have more negotiating power than they think, and VARs may soon be paying more for their services. According to the study, conducted by IT staffing consultant Robert Half International and online job site CareerBuilder.com, 81 percent of hiring managers said it is […]

Written By: Deborah Rothberg

Aug 30, 2006

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An annual study on hiring and compensation trends revealed that IT professionals may have more negotiating power than they think, and VARs may soon be paying more for their services.

According to the study, conducted by IT staffing consultant Robert Half International and online job site CareerBuilder.com, 81 percent of hiring managers said it is equally or more difficult to find qualified candidates than it was 12 months ago.

The report surmises that a skills shortage is paying off for workers, as 52 percent of hiring managers who were having trouble recruiting cited a shortage of qualified professionals as the primary culprit.

Nearly two-fifths of hiring managers said they planned to increase starting salaries in the next year to attract new talent.

The report spells particular trouble for the channel, where smaller companies are the first to get squeezed when competition for jobs heats up.

M.J. Shoer, president of Jenaly Technology Group, of Portsmouth, N.H., remembers the IT shortage of the late 1990s, when salaries rose to extremes as big companies hired every possible candidate and smaller companies were left competing for scraps and paying dearly for them, he said.

“I can remember getting resumes for desktop techs requesting $70,000,” Shoer told The Channel Insider in a previous story on the diminishing pool of IT candidates. “It raises the costs for everyone, end users included, and the whole market will be in trouble.”

Click here to read the article, “Keeping Them Happy: Retaining Staff is About More Than Money.”

Thirty-seven percent of hiring managers in the survey said that professional and technical staff-level positions were the hardest to fill, followed by administrative/clerical workers (16 percent); directors, managers or supervisors (15 percent); temporary/contract workers (12 percent); and CIOs, chief financial officers and CEOs (4 percent).

Max Messmer, chairman and CEO of Robert Half International, based in Menlo Park, Calif., said that the demand by employers for highly skilled employees to fill staff-level positions is strong.

“The need has been especially pronounced in accounting and finance, where corporate governance mandates have resulted in the creation of accounting jobs that did not exist five years ago,” he said.

According to the survey, 45 percent of workers said that health insurance is the most important benefit and for 24 percent, it is flexible work hours.

Twenty-six percent of employees said they were looking for a new position. Thirty-seven percent of workers said that they thought it would be more difficult to find a position today than it was 12 months ago, compared with 42 percent last year.

One in five hiring managers expressed feeling constrained by not being able to offer applicants competitive compensation. The three most popular measures to improve employee retention were salary increases, bonuses and flexible work schedules.

“While competitive compensation and benefits are important to employees, so is working for a stable company with a positive work environment,” Messmer said.

“Firms that cannot offer top salaries should look at what they can offer that others do not, including professional development programs.”

Check out the latest issue of eWEEK Strategic Partner for a special report on finding and retaining employees in the channel.

Study: Skills Shortage Boosts Salaries

Deborah Rothberg

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