Secrets to Tech Recruiting in the Age of Digital Disruption

A Hiring Manager’s Guide to the IT Market

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Table of Contents

DIGITAL DISRUPTION AND THE IT LABOR MARKET 3

WHAT IS THE TECH INDUSTRY UNEMPLOYMENT RATE? 4

THE LOWDOWN ON THE TOP TEN TECH JOBS 4

GOOD NEWS—AND BAD NEWS—FOR IT RECRUITING 7

WHAT’S A FAIR WAGE IN THE TECH INDUSTRY? 7

COMMON IT RECRUITING METHODS—AND WHY THEY ULTIMATELY FAIL 9

8 GOLDEN RULES FOR RECRUITING TOP TECH TALENT 10

RPO: THE SECRET TO SOLVING YOUR IT RECRUITING PROBLEM 11

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Digital disruption— it’s a trend that is reinventing the way we live our lives. Today, we can do things our grandparents never dreamed of. From depositing a paycheck into our bank account via smartphone to buying Great Aunt Mary’s favorite candy on Amazon to updating our benefits options via the employee self-service portal at work, more of our routine activities take place in a virtual space every day. Privileged children are no longer born with silver spoons in their mouths—now they’re born with smartphones in their hands.

Digital Disruption and the IT Labor Market All that digital traffic changes the game for businesses too. If you don’t keep up with consumer demands for digital access, you’ll be trampled under competitors that do, and you’ll soon become a relic of the past—along with your profit margin. Smart businesses recognize that the digital age requires a brand-new technology strategy, and they’re clamoring for people to build the platforms, interfaces, and infrastructure to get it done. They also need experts in cloud computing, automation, data, mobility, and social technologies to remain competitive in today’s business environment. That has enormous implications for the IT labor market:

More than 6.7 million people work in the tech industry.

The IT market comprises 7.1% of U.S. GDP.

Companies will spend $191 billion on cloud computing services by 2020.

Over the past five years, 1 million tech jobs have been added in the United States.

But while job growth in the IT sector shows no signs of slowing, there remains a gap between demand for skilled workers and available talent to fill those open positions.

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What is the Tech Industry Unemployment Rate? In November of 2016, we saw unemployment rates fall to 4.4%, the lowest they’ve been in almost a decade. Tech industry rates fell even lower, landing at 2.9%, which isn’t surprising given the surge in demand for new technology. But even at the height of the recession in 2009 when national unemployment rates spiked to almost double digits, tech industry rates still hovered nearly 5 points lower than the national average.

It’s not difficult to pinpoint the reasons for the disparity. Tech jobs require specialized training and skills. Coupled with the digital revolution driving business innovation, tech skills are in higher demand than most other jobs—and more tech jobs are being added to the market every day. That’s great for job security if you’re a data scientist, but it’s daunting for employers who desperately need skilled talent to move forward.

The Lowdown on the Top Ten Tech Jobs Research in the tech industry indicates strong growth in analytics, IT security, database administration, and web development. These growth areas reflect trends toward strategic use of big data, expanded online and mobile functionality, and pervasive cloud computing implementation. As we head into 2017, demand for workers in these areas will far outstrip supply. Let’s take a look at CareerBuilder’s supply and demand numbers over the past two years for ten top tech jobs:

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From web developers to software engineers, the numbers paint a bleak picture for recruiters. Among these ten positions alone, employers face a deficit of more than 1.8 million active candidates as compared to the number of job postings.

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Of course, anytime the demand for talent exceeds the number of available workers, you have fierce competition in the job market, as demonstrated by the hiring indicator scale (lower numbers indicate greater hiring difficulty):

Clearly, there’s a serious gap between the number of job postings and the number of qualified candidates who are actively pursuing those positions. The greater the gap, the more difficult hiring will be. Here’s what those gaps look like for our top ten tech jobs in terms of percentages:

These numbers leave employers facing some serious challenges:

What does the demand/supply gap mean for IT recruiting?

How much will you have to pay for the talent you need?

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And how do you go about attracting quality workers to your company? Ultimately, these questions revolve around one central problem: How do you convince the best people to work for you—and not your competitors?

Good News—And Bad News—For IT Recruiting If you’re recruiting IT workers (and let’s face it—if you’re not, you probably will be soon), the good news is that employee confidence is on the rise. By October of 2016, the number of voluntary quits had almost reached prerecession levels. Why is that good news? It reflects employee confidence. During the height of the recession, no one dared quit a job. Now, as the economy has started growing again, employees are more likely to quit their jobs because they’re confident that they’ll find something better. And that means employers have a wider field of candidates to choose from than they might think. So what about the bad news? If employees are confident they’ll find a better job than they currently have, they’re also becoming pickier about the jobs they’re willing to accept. In order to remain competitive, you will have to take a long, hard look at compensation rates. But you can’t stop there. You’ll also have to create a culture and brand that people want to work for.

What’s a Fair Wage in the Tech Industry? Let’s return to our top ten tech jobs. Compensation still remains a big drawing card for workers, and employers need to compare their current compensation packages with those of their competitors. So what constitutes a competitive salary? Let’s look at the average salaries for in-demand tech jobs:

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Of course, salaries aren’t stable across every candidate and job opening. They fluctuate based on a number of factors, including:

Location—Regional variations in cost of living and demand can create significant differences in pay for similar jobs.

Competition—It’s easier to find an IT support technician than it is to find a data scientist. Competition for skilled data scientists will drive those wages higher.

Experience and Skill Requirements—The data scientist also has to have more specialized knowledge and skill to perform his or her job—another factor that predicts higher salary.

Credentials—Does your ideal candidate need a master’s degree or advanced certification? If so, you should expect to pay more.

Performance Record—If you want to attract a candidate with a proven track record of success, you’ll need to extend a better offer than you would to someone just out of college.

If paying top dollar for the most experienced, credentialed candidate is out of the question for your company, you’re not entirely out of luck. Take a second look at your job requirements and ask whether you can bend on some of them in order to open up the field a little wider. For example:

Can you hire someone with less on-the-job experience and train after hiring?

Does your ideal candidate absolutely need that certification, or is it something he or she could work toward after joining your team?

Are you willing to look for candidates in other regions and pay relocation costs?

There’s one final factor to consider before leaving the subject of compensation: not everyone is looking for the highest paycheck. In fact, Glassdoor reports that millennials would rather make $40,000 at a job that aligns with their values than $100,000 at a job they hate. And 52% of software engineers say they would take a job with a lower salary if the company had a fantastic culture.

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The takeaway? Compensation matters, but you should also consider your culture and engagement strategy rather than simply aiming to be the highest bidder.

Common IT Recruiting Methods—And Why They Ultimately Fail If we gave you a super tough recruiting assignment, but promised that it would help your business hire more of the best IT people, make more money, and rocket past competitors to the front of the pack, would you do it? Of course you would. The problem isn’t motivation—the problem is know-how. Many organizations have tried every methodology they know to recruit IT stars and still come up with sub-par results. That’s because they’re going about it the wrong way. Let’s look at some common recruiting methodologies and the reasons they don’t deliver results:

Post and pray—Are job boards effective? Definitely, but only if you know how to use them. The post-and-pray method (post your job and pray the right person applies) rarely—if ever—works.

Hire a staffing agency—Staffing agencies start and end with filling open positions. That may work if you’re hiring entry-level employees, but it doesn’t solve deeper problems with your recruiting process—the kind of problems that prevent you from attracting top IT performers.

Create a social media blast—Social media is the new job board—or so we’ve been told. And it certainly does have a place in your overall recruiting strategy. But hammering social media while ignoring other essential recruiting pillars is just another version of post-and-pray.

Follow the latest craze—It’s a common theme on blogs: “Forget social media! Job boards rule!” Next week you’ll read that job postings no longer work and you should turn your attention to LinkedIn instead. Before long, you’re ping-ponging your way through every recruiting fad in the blogosphere without any cohesive strategy.

Create recruiting silos—Isolating your recruiting efforts in your internal recruiting department causes you to miss out on some of your best leads.

Do nothing—Do you ever feel like wringing your hands and just struggling along with your current team (even though your IT department is overworked and understaffed)? If so, you’re not alone. Ignoring the problem may make it

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go away for a while—but it will soon come back to bite you when your IT staff quit for a better offer.

Feeling discouraged? Don’t! There is a solution to your IT recruiting quandary. But first, let’s look at eight golden rules for a successful IT recruiting program.

8 Golden Rules for Recruiting Top Tech Talent Competition in the tech market is getting more intense every year, and that means you can’t rely on tired recruiting strategies. So what’s the best place to find IT candidates: job boards? Career fairs? LinkedIn? Short answer: All of the above. Successful IT recruiting isn’t just about where to recruit. It’s about building the right process. And that means including a variety of resources, methodologies, and venues to reach the people that can propel you to success. But how do you know what works and what doesn’t? These eight golden recruiting rules will put you miles ahead of the competition as you build your IT talent pipeline:

Job postings still matter—Active candidates still rely heavily on job boards to find new positions. Glassdoor reports that 71% of software engineers use job boards to find new opportunities, and 68% of all job seekers search for jobs on a mobile device at least once a week. Craft your job posting carefully, setting out your expectations in detail and creating a realistic description of the job. Also, consider whether the job requirements listed actually are “requirements” or just “nice-to-haves.”

Don’t overlook passive candidates—Nearly three-quarters of employees are open to a new position, even though most report being happy in their current job. These “passive candidates” won’t be hanging out on job boards, so you’ll need to use other strategies like networking, open lines of communication, and an irresistible offer to identify them and persuade them to make a switch.

Institute a referral program. Almost half of IT professionals know ten or more people with similar experience and credentials. Hand out bonuses for referrals and you might be surprised how quickly you’ll gain access to quality talent.

Reach out to top performers in other organizations. Exceptional talent tends to hang out with exceptional talent. Reach out and build strong relationships with industry heavyweights, and you’ll gain access to a previously untouchable network of potential candidates. LinkedIn has become the go-to networking site for many, but don’t overlook the power of a good old-fashioned phone call.

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Don’t skimp on screening—Insufficient screening can result in a poor talent match for your company. Resumes often contain exaggerations, so make sure the candidate actually possesses the knowledge and experience represented on paper.

Brand yourself as a fabulous employer—Google didn’t become known for its culture by accident. They have a shrewd strategy in place designed to attract and retain talented people who don’t follow cultural business norms. A whopping 97% of software engineers read company reviews before they decide whether or not to accept an offer. You don’t necessarily have to install nap pods and free gourmet cafeterias, but cultural and branding assessments can promote candidate attraction, engagement, and retention.

Craft an exceptional candidate experience—Candidates who are happy in their current positions aren’t likely to slog through a ten-page application or wait weeks for a phone call (especially if you contacted them first). Polish up your candidate experience by streamlining the application process, placing the candidate in contact with a real person, responding to emails and voicemails quickly, and communicating tangible value in your offer.

Be human—While technology can support and streamline your recruiting efforts, long-term favorable outcomes depend on building human relationships. Communication, networking, face time, personal recommendations, and a willingness to help others will earn trust and open doors to new connections.

RPO: The Secret to Solving Your IT Recruiting Problem There’s one more strategy you should add to your IT recruiting game plan: work with an outside recruiting firm. Almost 60% of IT job seekers consult with a recruiter when looking for a new position. And active candidate recruitment is just a tiny corner of the big picture when it comes to hiring the right people. As we pointed out earlier, staffing agencies focus exclusively on filling open positions with active job seekers—and that’s not going to achieve the results you want in the competitive IT market. That’s why you need the deeper methodologies of recruitment process outsourcing (RPO). Recruitment process outsourcing (RPO) is the full or partial outsourcing of your recruiting function to an RPO firm. The RPO firm will handle some or all of your recruitment activities based on the needs of your company, and they will provide the skills, tools, technology, and process methodology you need to source, screen, and hire quality candidates. But RPO isn’t just about finding the right candidates. It also includes creating long-term recruiting solutions, identifying and resolving barriers to hiring and retention, and delivering actionable assessments of current practices. It’s also about partnering

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together to sharpen your recruiting strategy so you attract the right candidates—the ones who will integrate seamlessly into your company culture. Here are six methods we use at Hire Velocity to create your customized RPO solution:

Multichannel sourcing—Job boards, networking, LinkedIn, career fairs, college recruiting—we use all of these and more to help you hire the best and brightest IT minds.

Employer branding—Employer branding is crucial to candidate attraction and long-term retention. We help you assess your employer value proposition (EVP), create a unified branding strategy, organize social media campaigns, hone communications, and optimize your brand experience.

Analytics—Predictive analytics models help you plan for the future and identify practical solutions to meet your hiring goals. We also offer market assessments, competitor assessments, diversity planning, hiring indicators, progress benchmarking, trend analysis, and micro/macroeconomic research, helping you leverage data to develop your recruiting action plan.

Networking—Our broad network gives you access to both active and passive candidates across the nation, and our approach to candidate nurturing ensures the right match for your company.

Cultural Assessments—Cultural assessments help you understand what drives performance in your business and predict which candidates will work best in that environment. Accurate understanding of culture can increase retention rates, decrease turnover, analyze behavioral trends, and identify high potential candidates before you extend an offer.

Technology Assessments—Automation streamlines your critical activities and helps you manage your workforce more effectively. We design and implement technological solutions for talent attraction, sourcing platforms, social recruiting, applicant tracking, training, and enterprise architecture.

As the twenty-first century workforce experiences the first wave of digital disruption, we face permanent changes to the business landscape. Twentieth-century recruiting methodologies no longer attract the people you need to move your business forward. Your recruiting strategy must evolve along with the workforce if you want to attract the best and brightest. At Hire Velocity, we help you move beyond old-school reactive strategies, giving you the solutions and tools you need to hire the workers of tomorrow—today.

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About Hire Velocity At Hire Velocity, we are passionate about designing talent strategies that transform organizations, and make the impossible possible for our clients. By combining high

quality delivery teams with the most advanced recruiting and social media tools, we utilize two of our greatest assets—our talent and technology – to discover, measure,

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