"Hot" IT Professionals Enjoying Higher Salaries and More Flexibility, According to Hewitt Study.

Business Editors

LINCOLNSHIRE, Ill.--(BUSINESS WIRE)--Aug. 9, 2000

These days, many Information Technologies (IT) professionals are not only seeing their salaries skyrocket on an annual basis, but they are now receiving unprecedented flexibility from their employers as well, according to the new Hewitt Associates 2000 U.S. HOT Technologies Survey.

Hewitt Associates, a global management consulting firm, recently surveyed 216 large companies, reporting data on 38,465 IT employees with hot skills (skills in short supply, high demand and experiencing rapid changes in market value). This study found that IT professionals with the hottest skills often are averaging base pay increases of more than 10 percent per year, compared to national average annual increases of approximately 4 percent for non-IT salaried exempt U.S. employees.

On top of base pay, these IT professionals are garnering additional compensation through a variety of bonus structures and stock options. While bonuses are holding steady from last year to this year, with 66 percent of hot skills employees receiving a bonus of some type, the percentage of stock options granted has increased to 13 percent from last year's mark of 10 percent. However, only 1 percent of IT workers are now receiving stock grants, down from 7 percent in 1999, which can be attributed to the completion of Y2K projects.

"This study shows that while hot skills compensation is still growing, it is doing so at a slower rate than we've seen in years past," said Faye Lott, a Hewitt Associates IT compensation consultant. "However, there continues to be rapid pay movements for skills with the highest demand, which is a trend that should continue well into the future."

Today's Hot Skills

Network Engineering and Data Visualization are the two specialties currently commanding the highest pay, according to the Hewitt study. Network engineers are typically responsible for client/server and Internet/Intranet network development, while data visualization professionals apply techniques such as virtual reality to scientific and engineering projects.

Other skills earning the highest compensation include:

-- Web Infrastructure--designs, implements and supports Web

servers and applications servers;

-- Data Warehousing--gathers and organizes information, creating

a warehouse for the end-user;

-- Numerical & Non-Numerical Research--develops and implements a

variety of models and techniques, such as numerical algorithms 

and libraries, that enable the solution of engineering, basic

science, finance and economics problems;

-- Supply Chain Management--applies software tools that execute

and plan operations such as managing warehouses, inventory

supplies and distribution channels;

-- Voice Systems Engineering--designs, develops and supports

communications systems (PBX, CBX) in multi-switch

environments, and designs voice mail, dialing plans and

interswitch networking; and

-- Web Security--manages the selection, implementation and

maintenance of firewalls, application of security patches and

updates/modifies security design.

Non-Monetary Benefits Increase as Turnover Decreases

Hewitt's HOT Technologies Survey also indicates that a growing number of employers are opting to increase non-monetary benefits as a way to attract and retain high-tech talent. For instance, 83 percent of the companies surveyed now have flextime programs in place for employees with hot skills, compared to 57 percent a year ago. The same holds true for telecommuting programs, which have increased to 62 percent from slightly more than 40 percent in 1999. In addition, employers are relaxing dress code policies for these IT employees, with 73 percent allowing casual dress versus 58 percent a year ago.

"Early indications show that companies are beginning to find the right mix of compensation and perks to help retain hot IT talent," said Lott. "In fact, turnover of hot skills employees now averages 12 percent, which is a decrease from last year when it averaged just below 16 percent. It's important to note that this 12 percent mark is also lower than the non-IT employee turnover rate of 13 percent."

According to companies that participated in the study, the average time reported for filling an IT position was two to three months. And, although 26 percent of companies said that at least 10 percent of their IT positions were vacant, the majority reported that contract workers make up no more than 10 percent of their workforce.

Tomorrow's Hot Skills

Companies in this study have projected the highest increases of short-term needs in the following technology areas:

-- Web Content Development--directs, oversees, reviews and edits

all Web content, establishes links and flow of information on

and between pages;

-- Web Design and Development--designs, prototypes, develops and

implements applications using a number of Web programming

languages;

-- Web Infrastructure--designs, implements and supports Web

servers and applications servers; and

-- Web Security--manages the selection, implementation and

maintenance of firewalls, application of security patches and

updates/modifies security design.

"With the ever-growing dot.com industry and the evolution of traditional companies to an e-business environment, IT professionals specializing in various aspects of the Internet should soon claim the honor of `hottest of the hot skills,'" said Lott. "I think it's safe to say that the Internet may impact business in ways we've never seen before. As a result, IT and compensation managers everywhere may have a tremendous challenge on their hands to be competitive enough to attract the top talent with these specific skills."

The Hewitt Associates 2000 U.S. HOT Technologies Survey examines the dynamics of attracting and retaining IT talent in the highest demand, providing comprehensive trend data on what's hot, upcoming skill shortages, compensation packages and non-cash practices. To learn more about Hewitt's 2000 U.S. HOT Technologies Survey, visit the Hewitt Web site www.compensationcenter.com, or call the publications desk at [phone].

Hewitt Associates LLC (www.hewitt.com) is a global management consulting firm specializing in human resource solutions. With 1999 revenues of nearly $1.1 billion, the firm ranked among the Top 200 of Forbes magazine's listing of the largest private companies and as the largest employee benefits consulting firm in the U.S.

Tips on Attracting and Retaining IT Talent

Companies in an e-business environment must be competitive enough to attract and retain talent with the specific skills needed to meet the company's current business objectives, but avoid paying inflated salaries when demand for those skills cools, according to Hewitt Associates IT compensation consultant Faye Lott. Lott suggests the following to develop an effective strategy for attracting and retaining hot skills talent.

Develop a Compensation Philosophy. "Compensation offerings should support business strategies," said Lott. "Be responsive to the market in base pay, bonuses and stock in accordance with those strategies, and balance that with non-compensation benefits."

Provide Room to Learn and Grow. Most of the top high-tech talent is looking for challenging opportunities to grow and work with the latest technologies. Companies that provide this type of environment are sure to have the upper hand.

Partner with Key Departments. Managers are encouraged to forge relationships with the HR department, IT management and recruiters (if applicable) to effectively package company offerings. These departments are usually the first to spot trends and competitive activity. It's also a good idea to determine if recruiters are gathering applications from within closely associated industries or from business-at-large. Competition for hot skills talent is global and not limited to individual industry sectors.

Get Employee Input. "While most exiting employees will say they're leaving because of pay they can't refuse, the bigger question should be what had them looking or receptive to offers in the first place," said Lott. "You need to determine why the employee is really leaving; rarely is it just money."

Assess Every Six Months. "Conduct a retention assessment among IT employees and managers every six months, and take action on the results," said Lott. This evaluation should include questions related to:

-- How well an individual is performing in relation to the

business objectives;

-- The level and quality of training and development

opportunities;

-- Employee access to cutting-edge technology;

-- The performance management system;

-- Work and work/life environments;

-- The degree of collaboration between Compensation/HR and IT;

-- Coherence of the compensation strategy; and

-- Effectiveness of leadership.