After a record-breaking year of low unemployment and unrivaled job growth for engineers and other technical specialists, it’s no wonder job seekers seem so optimistic.
But have we hit the plateau? Some analysts say the market is showing warning signs of slowing down: The number of manufacturing and business services jobs in pace-setting Silicon Valley has stalled since July, and some notable companies laid off workers in late 1997.
We talked with Brenda Hall, CEO of Hall Kinion, a Cupertino, Calif.-based staffing services company, about what all this news means for job seekers. This is an edited transcript of the interview.
Q: If I’m a high-tech worker, what kinds of things should I look for that might signal a change in my industry or company? Should I worry when I read about Kodak and Silicon Graphics laying off workers or when Oracle issues a poor earnings report?
A: Any downsizing mentioned, even if it doesn’t come in your division, is cause for concern. Hiring freezes. Earnings releases that are down. For a change in a company, these are things to watch for. To what degree of concern really varies.
If you’re already unhappy, if you already have significant issues with your career being stalled, those signals could send a big message to you that it’s time to move on.
If, however, you’ve got a strong career where you’re at–you’ve got good potential, you’ve got great technology you’re working on, you feel challenged by what you’re doing–you shouldn’t take those concerns too much to heart. Companies go up and down all the time in this valley, and they don’t go out of existence. Oracle will be here tomorrow and the next day and this is no reason for talented engineers who are feeling very challenged to leave their state-of-the-art work environments at Oracle to go looking. It’s just not that serious of a message.
Q: Will the job market remain strong this year?
A: In the information technology sector, we can’t find knowledgeable economists who see the supply of people catching up with the demand. There’s just this ever-widening gap.
Will the valley have recessions? Most likely. Everybody does. Will there be slowdowns? Yes. But will the basic supply-demand equation of not-enough technical workers and more technical opportunities get closer together? Not many people think so.
Q: That sounds like a dangerous sign that’s caused problems elsewhere. For example, Boeing took a $1.4 billion charge in 1997 because it didn’t have enough workers to fill orders. Is it bad for tech industries to have a large gap between the supply and demand of workers?
A: Our biggest challenge is the knowledge gap–not enough knowledgeable workers to create what we can create. It’s like having the opportunity to write 1,000 books, but having only five authors. There are books that will never get written. There will be technologies that will never happen or that are delayed by years or months because we don’t have the workers to do it.
The good news is this shortage has made everyone in the technology world stop thinking about political boundaries and start thinking about the other Silicon Valleys of the world. We’re finding the largest supply of UNIX engineers in Bangalore, India. There are huge amounts of talented software developers coming out of Eastern European markets, such as Lithuania, Estonia and Romania.
Q. Consider the implications of the turmoil in the Asian markets: U.S. imports from Asia should be cheaper now, which could hurt business for American companies. Asian consumers also will likely buy fewer American goods. Could this have a strong negative impact on technical jobs?
A: There are definitely going to be repercussions. This is something to watch for and factor in when you’re thinking about your career opportunities: “Am I joining a company that’s heavily dependent upon its Eastern operations?”
I’ll give you a caveat though. The one recession I did live through in this business was in 1991-1993, and a lot of people feel that the companies that kept the most long-term view were the Asian companies. The Hitachis of the world that were in the United States used the recession as an opportunity to pick up talented people. Often, those companies think of things in terms of year by year, and decade by decade. Because they take a more long-range view, I don’t think it will be as bad as it would’ve been had American companies been suffering some of the things that they’re suffering now.
American companies are under terrific pressure on a quarter-by-quarter basis. I have a fair amount of faith that the Asian markets will react with a little more long-term view, although there’s going to be some pain.
Q: What’s your advice for job seekers for 1998?
A: Go back to the basics of your careers. Do what you love. If you work on what you love, you’ll develop a passion for it and you’ll succeed at it. Don’t make career decisions based on what you see out there in the economic world.
