Employment: Echo of Dot-com Boom Heard

First, the good news: Hiring is up in the tech world. Next, the bad news: Hiring is up in the tech world. If the dot-com bubble of the last decade taught us anything, it's that too much good news can be bad news. It's too early to predict that the turnaround in the tech sector is going to lead to the overindulgences of the past, but it's still a specter that haunts every piece of positive data that arrives on the relative health of the technology job market. In this month's issue of Spectrum, contributor Terry Costlow, who covers engineering careers for us, reports -- in "Hiring Heats Up" -- that tech jobs are plentiful again and wages are on the rise to meet growing demand.

The boisterous era of workplaces filled with foosball tables may be out of fashion in most settings, but that doesn't mean that perks small and large aren't being dangled in front of potential new hires nowadays.

"It's gotten a lot harder to find talent," Amy McKee, senior manager for global staffing at Autodesk, of San Rafael, Calif., told Costlow "There's a lot more venture capital money in Silicon Valley. Candidates now have multiple offers."

The industry trade group AeA (formerly the American Electronics Association) estimates that the United States added 150 000 high-tech jobs in 2006, nearly twice as many as in the previous year, for a two-year increase in total employment of 2 percent. The group estimates that unemployment is now 2.5 percent among computer scientists and less than 2 percent among engineers, Costlow writes. In economics, that's the equivalent of full employment.

Moreover, pay raises of 4 to 5 percent are considered the norm for U.S. tech employees. Plus, job security looks much more stable than in recent times. "There's much less job hopping," Elaine Peacock, the rewards manager at Freescale Semiconductor UK in Glasgow, told Costlow. "That's why the market is not moving as much."

While stock options are still being used as incentives for employees, the preferred new reward is an old standby, bonuses. Costlow notes that employers tend to favor bonuses because they allow them to retain talent without ratcheting up base salaries. For example, Freescale is holding wage increases to 2 to 4 percent in Europe, about the same level as last year, but the company is becoming much more generous with bonuses.

"We're rolling out a new bonus program," Mike Bristow, manager of compensation and benefits at Siemens VDO Automotive of Farmington, Mich., told Costlow. "Those who are eligible will see a significant increase." Bristow said that bonuses are tied to company performance, as well as to individual achievement. "When we're doing well, the program funds itself. When we're not, it doesn't cost us anything."

As if on cue, an item labeled "Dot-Com Work Culture Making a Comeback?" appears in today's line-up at the techie community site Slashdot. Citing a report from Deloitte Touche Tohmatsu, the international business consultancy, a Slashdot contributor noted that, "[H]igh on the agenda of CEOs around the world is the shortage of tech talent." The posting links to a column by Brendon Chase for builder.au, a software developer resource out of Australia. In it, Chase writes:

The word is out. IT rock geeks are back in demand and stereotypical "dot-com" culture (and smell) is back in vogue. Managers are again in a bidding war to compete with their rivals and new Web juggernauts like Google to retain their best employees by offering a laid-back environment to benefit staff moral, retention and productivity.

So the sands of time have seemingly erased the pitted landscape of the tech wreck of this decade and restored a competitive environment for workers to grow once more. It may not yet be appropriate to demand Hacky Sack breaks in the afternoon (oh, those were the days). But the doom and gloom have lifted. And talented employees are getting the benefits they deserve again. Tattoo parlors the world over must be rejoicing.


Tech Talk

IEEE Spectrum’s general technology blog, featuring news, analysis, and opinions about engineering, consumer electronics, and technology and society, from the editorial staff and freelance contributors.

Newsletter Sign Up

Sign up for the Tech Alert newsletter and receive ground-breaking technology and science news from IEEE Spectrum every Thursday.