Employers still grapple over IT pay, skills

According to Sommer Owens, manager of IT contract division at Robert Walters Hong Kong, IT salaries in the Chinese territory have been holding steady, but some employees are prepared to lower their pay expectations.

"Candidates who have been caught up in corporate restructuring are willing to accept a lower salary than they were previously getting to stay competitive in...[the] market," Owens said in an e-mail interview.

However, E. Balaji, CEO of India-based recruitment agency Ma Foi Management Consultants, noted that while it is true the bargaining power has swung in favor of employers, the expanding workers pool and lowering salaries relate more to generic IT skills.

A year ago, Balaji explained in an e-mail, most prospective candidates had more than one job offer and candidates were aggressively negotiating salaries and benefits, thereby pushing up the cost of quality talent. "With the current slowdown, this has subsided," he said, adding that the economic downturn has provided cash-rich companies with the opportunity to recruit quality talent at optimal cost.

"[However], for specific levels of expertise and niche skills, potential candidates in a company are generally 'ring-fenced'. Hopes of attracting them at less attractive terms may not materialize," he noted.

Yeo Gek Cheng, director of IT and telecommunications at Hudson Singapore, said the perception that employers now have a wider pool of candidates from which to choose "cannot be further from the truth", particularly for mid- to senior hires who are strong in their field.

"Those who are gainfully employed are unwilling to move due to the perceived risk of changing jobs now," Yeo told ZDNet Asia in an e-mail, adding that employees' annual salary increments have also remained unchanged.

While businesses still face a challenge recruiting candidates, this is less of an issue now as there are fewer job offers available to IT professionals, she said. Yeo noted that the lack of candidates in Asia cannot be resolved simply by an economic downturn. "What is a tight labor pool remains tight," she added.

Agreeing, Owens said some IT skills are still in short supply.

"Within the banking sector, there is a shortage of skills in systems that support flow trading (where investment firms trade on behalf of their clients)," she said. "In the wider commercial sector, candidates with strong enterprise platform skills and solid business understanding are also hard to find."

Peter Ferries, executive manager for IT at Randstad, a Singapore-based HR services company, said since major multimillion-dollar projects that have already commenced are rarely axed, these continue to drive demand for the appropriate IT skills.

In addition, businesses are looking to increase their IT investments in several areas, Ferries told ZDNet Asia in an e-mail. "A good example of this is business intelligence," he said. "Many of our clients are investing heavily in technologies to assist them with reporting, so their management teams can quickly access statistics and reports about their business operations."

"In an economy like the one we are in today, access to real-time information from your systems is essential, and this is just one area that is seeing broad investment and therefore demand for talent."

When the axe falls
Axer Goh, senior consultant at the IT contract division of Robert Walters Singapore, noted that some employers may take advantage of the increased availability of candidates to remove non-performers and replace them with new talents. However, in most cases, this is not the primary reason workers are laid off, Goh said.

"They may not be underperformers, but may have been retrenched due to reasons beyond the employer's control, such as the company's decision to consolidate its business back to the home country or to shelve the project the workers were tasked to do," Goh said in an e-mail.

For the majority of workers, she noted, redundancy is not associated with performance. "However, employers and recruiters need to ascertain the real reasons behind the retrenchment through evidence-based interviewing and reference checks," she said.

Yeo noted that formal reference checks are the best way to confirm the circumstances under which the worker was laid off. While informal reference checks may be an additional source, these must be balanced with formal checks, she said.

"Bear in mind that no candidate is perfect and there will be both good and bad comments in most instances. Thus, it is key to focus on competencies, achievements and track record rather than simply relying on hearsay," she said.

Owens added that when evaluating candidates who have been retrenched, it is also important to establish the candidate's motivations for wanting the job. Companies need to be confident the person has a genuine reason for applying, she stressed.

"Step into the candidate's shoes and consider how this role can truly add value to that person's career progression," she said. "If it seems like an illogical choice for the candidate, for example, to be willing to settle for a significant salary reduction or more junior position, it is quite likely the candidate will be very tempted to move on when the economy improves."

However, if the person is a good fit for the role and the employer can offer genuine career progression, the company is then more likely to be able to retain the person even after the market picks up, Owens added.

Balaji said companies forced to reduce headcount can continue to ensure staff loyalty if they follow sound HR approaches, such as continued or increased investments on retained employees, for example, by providing them with career development programs and training.

Goh said giving an employee the opportunity to work on new technologies can also help attract and retain strong talent in the organization.

And while the current economy has encouraged more workers to accept lower salaries just to stay employed, it is important companies reciprocate their employees' sacrifices when the economy improves, he said. For instance, employers should review their staff's pay package to ensure it is in line with the market standard, Goh said.

Yeo said treating every employee with respect is the first step to making all staff feel good about a company. "Offer a candidate a scope and salary that remains competitive, and do everything you would do in normal economic circumstance so no one feels marginalized by the current state of things," she said.

And when retrenchment is inevitable, Balaji advised companies to secure outplacement services to soften the impact on retrenched workers. Such services, usually provided by recruitment firms, create "a sense of humane handling and care" for staff affected by downsizing measures, he said.

"Some of our candidates are even proud they worked for former employers that helped them get suitable opportunities through career transition programs initiated by these ex-employers," he noted.

When the economy turns around and companies will again require staff in large numbers, employee goodwill will be of paramount importance, Balaji emphasized.

"The dividends in the form of superior commitment levels, loyalty, low attrition levels and motivation will be based on the HR brand equity," he said. "Companies with a low HR brand equity could then lose their quality talent, as employees may seek to move on when opportunities begin to increase."

Goh said leveraging the market downturn to depress salaries of strong talent will hurt the company in the long run."These companies will soon face the challenge of retaining good employees when the market picks up. Hence, it is important for companies to pay candidates a fair salary package, even during the downturn."