HDIHDI

"The Next Labor "The Next Labor Crisis..DéjàCrisis..Déjà

vu to the 1990’s All Over Again" vu to the 1990’s All Over Again"

2.14.072.14.07

James Del Monte CPCJames Del Monte CPC

JDA Professional Services, Inc.JDA Professional Services, Inc.

#1 Success Factor of Executives

• Hire Good People

Hard Questions Part 1Hard Questions Part 1

1.1. Who are you and what does JDA stand Who are you and what does JDA stand for?for?

2.2. What is going on in the employment What is going on in the employment market?market?

3.3. Why is it taking so long to find a position Why is it taking so long to find a position I want if unemployment is so low?I want if unemployment is so low?

4.4. Why don’t recruiters return my calls?Why don’t recruiters return my calls?

5.5. What does the future employment What does the future employment outlook look like?outlook look like?

Hard Questions Part 2 Hard Questions Part 2

1.1. What positions are moving off shore What positions are moving off shore and how does this impact me?and how does this impact me?

2.2. Are help desk positions going more Are help desk positions going more contract or Full-Time?contract or Full-Time?

3.3. Why is it that when I am hiring Why is it that when I am hiring someone the recruiter's won’t stop someone the recruiter's won’t stop calling?calling?

4.4. What is the future of the support What is the future of the support center?center?

Hard Questions Part 3Hard Questions Part 3

1.1. Where are the people we need to Where are the people we need to hire going to come from?hire going to come from?

2.2. How do I position myself for a How do I position myself for a senior management position? senior management position?

3.3. How much difference does How much difference does education or certification make?education or certification make?

4.4. What suggestions do you have to What suggestions do you have to keep my staff?keep my staff?

5.5. Are you done yet?Are you done yet?

What JDA Does. . .What JDA Does. . .

JDA provides clients with a full full complement complement of information of information technology professionals.technology professionals.Our services are designed to meet Our services are designed to meet the unique and changing the unique and changing requirements of our clients.requirements of our clients. Full-Time Staffing

Contract /Temporary Staffing

Special Projects Staffing

JDA

Sooo, Tell Me About Your Career.Sooo, Tell Me About Your Career.

Law of Supply and DemandLaw of Supply and Demand

The demand for skilled professionals peaked 4Q99 and has decreased, bottoming out 3Q03. The current cycle indicates that

once again there are more positions than skilled professionals, and this is projected to continue past 2010.

Labor Surplus vs. Skill Shortage

1984

1995

2Q01

4Q04

Demand Bottomed

4Q99

Demand Peaked

Demand Bottomed Supply

Demand

1989 3Q03

Most Requested InformationMost Requested Informationon JDA web site on JDA web site

How to write a How to write a resignation letter resignation letter articlearticle

High cost of High cost of turnover article turnover article

Job Creation

1 million new IT positions from 2004 – 2014 that’s a 30% increase(BLS)

Labor Surplus vs. Skill ShortageLabor Surplus vs. Skill Shortage

The job market has shifted from an Employer’s MarketEmployer’s Market to a Job Seeker’s MarketJob Seeker’s Market - to a Combination MarketCombination Market.

Candidate

Candidate

Candidate

Position

Position

Position

Position

Candidate

2000 - 20032000 - 20032000 - 20032000 - 2003 2004 - 20102004 - 20102004 - 20102004 - 2010

Market ShiftMarket Shift

Candidate PopulationCandidate Population

25% A Players25% A Players

50% B Players50% B Players

25% C Players25% C Players

National Economic Stats for 2006

• National unemployment rate is at a 6 year low of 4.6%

• National average hourly wage increased 3.85% from $16.10 to $16.72 in 2006, the greatest increase since 2000

• National average annual expenditure for 2005 was $46, 409, a 6.9% increase from 2004, and the highest increase since 1989

• Stock market prices have been on the rise since early 2003 and they are currently at their highest point since early 2001

Houston’s Economic Stats for 2006

• Houston’s unemployment rate averaged 5.1% for 2006, our lowest since 2001 when it was just 4.7%

• Houston’s average hourly wage was at $19.57 in December 2005, more than $3 above the national average at that same time

• Consumers in Houston spent an average of $52,998 per household in 2005, 10.3% higher than in 2004 , an increase which is unmatched in at least the past 20 years

National vs. Local Economies

STATISTIC NATIONAL HOUSTONHOW WE

COMPARE

Unemployment Rate (Avg. for 2006)

4.6% 5.1%(p) +.5%

Average Hourly Wage (Dec 2005) $16.35 $19.57 +19.7%

Average Consumer Spending Per Household (2005)

$46,409 $52,998 +14%

• Will come from companies with less than 100 employees

• In Houston there are less than 4,000 companies with over 100 employees

• These companies need the same services as large companies - just not all the time

80% of Job Growth80% of Job Growth

Big VS Small Big VS Small

Traditional business don’t create jobs Traditional business don’t create jobs or invent products they buy them or invent products they buy them

Job Growth vs Job CreationJob Growth vs Job Creation Risk Aversive – more committee Risk Aversive – more committee

decision make to limit career riskdecision make to limit career risk

Increase Staff, 44%

Remain the Same, 56%

Decrease Staff, 0%

2007 Houston IT Hiring2007 Houston IT Hiring

2006 CIO Survey Results

QUESTIONS INCREASE DECREASESTAY THE

SAME

Company Growth in 2007

77.10% 2.90% 20%

Department Budget in 2007

74.30% 8.60% 17.10%

Staffing Level in 2007

44.40% 0% 55.60%

Base Salaries in 2007

89.30% 10.70% 0%

Employee ChurningEmployee Churning

CompA

CompB

CompC

Position Demand . . .Position Demand . . .

% Skills Yrs. Exp.

10 Mgmt./Conslt. 8+ Yrs.

30 Sr. Tech/ 4 – 8 Yrs 1st Line Mgmt

60 Staff/Tech 0 – 5 Yrs

Talent PoolTalent Pool

% Skills Yrs. Exp.

60 Mgmt./Conslt. 8+ Yrs.

30 Sr. Tech/ 4 – 8 Yrs 1st Line Mgmt

10 Staff/Tech 0 – 5 Yrs

Position Demand . . . Position Demand . . .

Talent Pool . . . Talent Pool . . .

% Skills Yrs. Exp.

10 Mgmt./Conslt. 8+ Yrs. 60 8+ Yrs

30 Sr. Tech/ 4 – 8 Yrs 30 1st Line Mgmt 4 – 8 Yrs

60 Staff/Tech 0 – 4 Yrs10 0 – 4 Yrs

Future IT EmployeesFuture IT Employees

Disconnect Disconnect

28018

3188133583 33848

2779424640

18046

0

5000

10000

15000

20000

25000

30000

35000

40000

Fall 99 Fall 00 Fall 01 Fall 02 Fall 03 Fall 04 Fall 05

Employment of workers in IT Occupations

3,150,000

3,200,000

3,250,000

3,300,000

3,350,000

3,400,000

3,450,000

3,500,000

3,550,000

3,600,000

3,650,000

3,700,000

Source: National Association of Computer Consultant Businesses (www.naccb.org)

IT employment levels exceeds pre recession or pre-bust levels. New college enrollment for MIS, CIS, and CS students from 99 to fall 00 increased 13.8% from 28,018 to 31,881 and remained at record highs through 2002. New enrollment numbers plummeted 17.9% from 02 to 03 and another 26.8% to 18,046, the lowest number on record.

Where Do All of the People Come Where Do All of the People Come From?From?

Internal Full-Time Staff

Low Cost Providers

Network Integrators

Hardware Support Providers

Software Developers/Support

Software Providers

Voice Data Providers

Contract or Temp Labor

Training Companies

Management Consultants

How Work Gets DoneHow Work Gets DoneOff-shoring

Out-sourcing

Services used for Services used for Help Desk/Call CenterHelp Desk/Call Center

7%

29%

64%

Off-ShoreOut-SourceIn-House

Customer Satisfaction ComparisonCustomer Satisfaction Comparison

Service Service LevelLevel Off-ShoreOff-Shore Out-SourceOut-Source

BetterBetter 25%25% 50%50%

SameSame 0%0% 14.3%14.3%

Not as Not as GoodGood 75%75% 35.7%35.7%

Top Reasons People Work Top Reasons People Work Contract Contract

It will lead to permanent employmentIt will lead to permanent employment Flexibility of scheduleFlexibility of schedule To obtain experience/trainingTo obtain experience/training Diversity in jobs/challengeDiversity in jobs/challenge Only work available Only work available Money is betterMoney is better Family or personal obligationsFamily or personal obligations Changing careers and need more Changing careers and need more

experienceexperience

Source: American Staffing Association Source: American Staffing Association Workforce MetricsWorkforce Metrics Choosing Temporary WorkChoosing Temporary Work

Sets the Price Yes NoAnnual Increases 5-15 % 3-6 %

Today’s MenuBusiness Analyst $50K - $ 80KProject/Team Leader - $65K - $110K Large CompanyData Center Manager $75K - $105KData/Voice Comm Spec. $55K - $ 95K. NET Market Value

Positions of TomorrowPositions of Tomorrow

Current globalization creates a market for PM, BA, and Functional Analysts who areneeded to manage 3rd party resources.

70% of CIO’s Use Help Desk as a Point of Entry70% of CIO’s Use Help Desk as a Point of Entry

InfrastructureManager

Help Desk Manager

NetworkAdministrator

Communications

Level 1 Support Level II SupportService Desk

Analyst

Where do Help Desk team members usually come from?• External candidates with experience and certifications• New technical school graduates• Internally promoted employees

Top 3 Retention ProgramsTop 3 Retention ProgramsOnly 16% of CIO’s currently have special retention programs in place for Only 16% of CIO’s currently have special retention programs in place for

their Help Desk employees.their Help Desk employees.

#1 Training – 57%#1 Training – 57%

#2 Career Mobility – 29%#2 Career Mobility – 29%

#3 Bonus Program – 14%#3 Bonus Program – 14%

Skills CIO’s Look For Leadership Positions

Business/Functional Project Management Communication - written and oral Presentation Problem Solving Critical Thinking Leadership Organization Skills Time Management Attention to Detail Learning Ability Flexibility

Experience vs Degrees for Experience vs Degrees for Management Management

71.9%

28.1%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

Advanced Degree

Experience

Degree

Both

Value of Education Value of Education

71% of CIO’s prefer an advanced 71% of CIO’s prefer an advanced degree before promoting to a degree before promoting to a leadership role.leadership role.

A faithful employee is as refreshing as a cool day in the

hot summertime. Proverbs 26:13

Who’s LookingWho’s Looking

21%

32%

47%

Active – 32Active – 32 Passive – 47Passive – 47 Not at all – 21Not at all – 21

Why People LeaveWhy People Leave Bad management Lack of recognition or reward Too much travel Bad work environment Lack of job security Lack of training Long commute Pay/benefits Uncertainty about future Lack of career advancement

Why People StayWhy People Stay Like the people they work with – Like the people they work with –

mostly their managermostly their manager Control and independence over Control and independence over

workwork Flexible work schedules Flexible work schedules Decision makingDecision making Increased levels of responsibilityIncreased levels of responsibility Reward and recognitionReward and recognition A sense of belonging A sense of belonging FunFun

10 Ways to Keep Them!10 Ways to Keep Them!

1.1. Hire the right type of person: A or BHire the right type of person: A or B

2.2. Have people grow into the position vs. out of the position Have people grow into the position vs. out of the position

3.3. Rotate responsibilities and cross-train, offering a variety of Rotate responsibilities and cross-train, offering a variety of functions and responsibilitiesfunctions and responsibilities

4.4. Pay above-market cash or bonusesPay above-market cash or bonuses

5.5. Use non-cash rewards and recognition for results/ effortsUse non-cash rewards and recognition for results/ efforts

10 Ways to Keep Them!10 Ways to Keep Them!

6.6. Create a team environment / team buildingCreate a team environment / team building

7.7. Use temps or contractors for more routine Use temps or contractors for more routine workwork

8.8. Encourage communication with managerEncourage communication with manager

9.9. Make proactive counteroffers when you Make proactive counteroffers when you have someone you want to keep have someone you want to keep

10.10.Set clear expectations and give feedback Set clear expectations and give feedback on how they are doingon how they are doing

Bad SeedsBad SeedsGet rid of bad seeds and people who Get rid of bad seeds and people who don’t want to be there – the don’t want to be there – the dominant attitude will proliferate dominant attitude will proliferate through the group and pollute the through the group and pollute the team.team.

How All This Impacts YouHow All This Impacts You

EmployerEmployer Higher Turn OverHigher Turn Over Higher Employee Higher Employee

Cost Cost Positions Open Positions Open

LongerLonger Higher Hiring CostHigher Hiring Cost Add Fees to BudgetAdd Fees to Budget

EmployeeEmployee More Career More Career

OptionsOptions Training Training Bonuses Bonuses Increase Base Increase Base

SalarySalary

Solutions for JDA Clients

Review and Revise Retention Plans Review and Revise Retention Plans

Make Salary Adjustments Based on Market Make Salary Adjustments Based on Market Rates (see JDA Houston Salary Survey)Rates (see JDA Houston Salary Survey)

Spend Time & Money Training & Developing Spend Time & Money Training & Developing Staff (includes cross training)Staff (includes cross training)

Hire Interns &/or Part-Time StudentsHire Interns &/or Part-Time Students

Encourage Entrance into the Field by Getting Encourage Entrance into the Field by Getting Involved with Local High SchoolsInvolved with Local High Schools

Adopt a Proactive Recruiting Model – CALL Adopt a Proactive Recruiting Model – CALL JDA!!!JDA!!!

JDA ResourcesJDA ResourcesWWW.JDAPSI.COMWWW.JDAPSI.COM

Salary SurveySalary Survey Hiring TrendsHiring Trends Cost of Turn OverCost of Turn Over Counter offersCounter offers Hi-Tech CalendarHi-Tech Calendar Hot JobsHot Jobs Interviewing Tips Interviewing Tips

701 North Post Oak RoadSuite 610

Houston, Texas 77024-3818

Phone: 713/548-5400www.jdapsi.com

Contract and Full-time Staffing Information Technology Staffing Specialists Consulting and Special Projects