Q&A: Scot Melland, CEO, Dice
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Want a health check on the IT industry? Scot Melland would be happy to give one.
No, the boyish-looking Melland is not a CNBC talking head, a trade group honcho or a government economist.
But as president and CEO of Dice, the job board for IT professionals, he can analyze jobs data from the site and tell you the following: If the rebound is for real, what skills employers are willing to pay for and which U.S. markets are the hottest for programmers (hint: it's not Silicon Valley or Boston).
The former head executive of VCommerce Corp. recently sat down with internetnews.com to discuss the rest of his findings from his daily IT examinations.
Q: You took the helm at Dice in April 2001. What have the last three years been like in the IT job market?
The crash started in the beginning of 2001. In our business, we saw half of our customers [companies and recruiters] just go out business. But by the summer of 2003, we saw a steady increase and rebound in technology jobs. For a while, we were the lone voice in the wilderness. The market has come back. The number of jobs posted has grown 58 percent year-over-year. We have 40,000 positions. So, the big news is the tech employment market is now getting better.
Q: How much bigger will this hiring wave get?
It won't be like the craziness in 1999 and 2000. There were two artificial factors that drove a tremendous amount of spending [then] -- Y2K and the telecom/Internet bubble. We will probably never see that again in our lifetime. But as tech spending increases, jobs increase. There is a lag time between companies seeing a uptick in business and then investing in technology and hiring fulltime staff.
At first part-time and contract work goes up. Those jobs can turn into full-time positions.
Q: Looking at your current listings, what IT skills are most in- demand by employers?
In full-time jobs, the traditional technology skills -- java programmers, application programmers, sys admins, database admins, nuts-and-bolts engineers. People with .NET capability and experience, people with Linux backgrounds are in demand.
Q: What's your assessment of the IT offshoring trend?
Offshoring has definitely had an impact on the number of positions [available] domestically. If offshoring hadn't taken off to the extent it has over the last three years, we would have seen the recovery a year earlier. But in a lot of respects it's over-hyped; the number of jobs going offshore is still small in [proportion to the] total number of positions.
Long term, if you believe the ongoing rise in tech development and spending will continue, then we could find ourselves in a shortage because of the number of engineers, computer science and math and science graduates we have.
Q: To date, Dice has focused on the U.S. market, will that change?
About 20 percent of our traffic to the site comes from outside the United States -- from the UK, the Middle East and Canada. We are looking at launching Dice services in India and other countries as well. We will be doing it with local partners but we're looking for the best way to do that.
Q: Dice recently expanded the scope of its services. Can you talk about that?
We are expanding into broader technology fields. Our biggest entree is in security-cleared professionals. There is a huge demand for that. The defense industry is very hot right now. All the defense contacts require experienced tech professionals, especially people with active security clearance.
Defense is also affecting Washington, D.C. The demand for tech help there has been huge and is continuing to grow. New York City is being driven by financial services. Boston and the Bay Area are recovering a lot more slowly.
Q: What about salaries?
What we saw in our 2003 survey was that the average tech salary increased 2 percent, but that's after the fact that they've been declining over past two years. As a profession, [IT is] still a tremendous career. In the same survey, we asked how satisfied workers were. Eighty percent said they had a foot out the door, or going out the door.
Traditionally, there is a 20 percent turnover in IT. Over the period of the two-plus years, people haven't changed. There's an undercurrent of dissatisfaction. When we're talking to customers, that's something they need to think about as the employment market gets better and better. We could be on the cusp of huge turnover, especially in tech.
Q: Then what's your advice for companies looking to retain talent?
What builds loyalty? Money is first. After money, it's training, the ability to work on high-impact projects. What we are telling our customers is to think about this. Look at competitive compensations, training programs, give [workers] an opportunity to expand their skillsets.
In tech, you need training. As a profession, [tech workers] are naturally anxious about skills being current. In 18 to 24 months [current skills] can become uncompetitive. It's the nature of what they signed up for. So companies should have a terrific training program.