Something
Ventured:
January 18th, 2002
By Brent
Holliday
Greenstone
Venture Partners
"Try
to see it my way
Only time will tell if I am right or I am wrong.
While you see it your way
There's a chance that we might fall apart before too
long "
- The Beatles, We
Can Work It Out
The
subject that pops to mind this week as nearly 12,000
civil servants get their walking papers in BC is, of
course, jobs. Four months after September 11th we are
still getting mixed signals in the overall economy about
recovery or worsening conditions. Retail and on-line
sales in the US over Christmas exceeded all
expectations, yet we have one country going bankrupt
(Argentina) and an economic superpower lowering its
currency as a last gasp to get its 10 year recession
turned around (Japan). Manufacturing numbers appeared to
be on the upswing in December, yet we hear of Ford
laying off 35,000 people and closing plants. Are we
really turning the corner after 12 interest rate cuts
and massive down-sizing? Or is their more pain ahead?
On
November
9th, I wrote about technology jobs and the fallout
of an 18 month slide in most technology sectors. I bet
on three trends for the glut of information technology
workers that appeared after the dot-com meltdown and the
communications collapse. First, school would be a good
place to land and that biz schools and other graduate
schools would see sharp rises in enrollment. Second, the
Canadian brain drain would become a non-issue as
Canadians in the US flocked back home for jobs and
security. Third, I predicted that many new
"consultants" would appear, which is just a
fancy way of saying that you will work for food on any
and many contracts that will bring money in the door.
Today
I'd like to get a little more practical and throw out
some ideas for the readers that are looking for work on
how to get hired in technology and for the readers that
do the hiring, ideas on balancing the cost controls with
hiring great people. I'll take a shot at predicting how
and when this may all get better, but like any public IT
company CFO, my guidance will be without guarantees.
The last numbers that we have for total number of BC
technology workers is 60,000 from BC Stats in the year
2000. That was the peak of a long run of growth. As
anyone would guess, 2001 saw a contraction of those
numbers. It would be safe to say that there will not be
a party to celebrate the release of the 2001 stats on
behalf of the technology industry. If you use the
unemployment number in the US for IT workers as a guide
(2% unemployment in 2000, up to 4.4% at the end of 2001)
you would guess that a significant contraction occurred
locally. I'm guessing that we lost roughly 10% or 6,000
technology jobs from down-sizing, attrition and
companies going out of business in 2001. But the actual
number of unemployed technology workers is probably
rising because people are returning from the US and
other locations. That means we could have 8 - 10,000
people, trained in some discipline of technology,
without full-time work in BC right now. Sure, some are
going back to school and some are working contracts as I
mentioned above, but that's still a lot of people when
you consider that there was near zero in the late
1999/early 2000 period.
Anecdotally,
the number of resumes sent to Greenstone indicates that
the world has changed. We are not a placement agency and
any resumes that we receive are probably being
carpet-bombed to other VCs in the hopes that one of our
early-stage companies is actually growing and not
contracting. But the volume of these resumes has gone
from a trickle to a flood in the last 6 months.
Interestingly, the quality of resumes has been
impressive, from the appearance of their education, job
experience and domain knowledge. The downturn has not
selectively hit the inexperienced worker. Perhaps in the
very early days of layoffs that was the case, but now
the big companies don't have the resources to hold
everybody and whole sections/ product lines have
evaporated. Some companies that cratered had excellent
people as well.
Here's
the difficult thing: tech companies, by and large, are
not hiring aggressively right now. Sure, ask any HR
manager or CEO of a smaller tech company and they will
say that they always have jobs for excellent people. No
one will turn down a resume at this point. But, the
truth is that most Boards of Directors and senior
management types have tabled their 2002 budgets and many
have said "no employee growth" while others
have said that expenses must be matched to revenues,
which means that unless the sales department pulls a
rabbit out of the hat this quarter, hiring will be at a
minimum.
The
engineer/developer/test (the builders) jobs are likely
to be found in funded start-ups (keep checking T-Net: www.bctechnology.com
for
funding announcements to see who has money) where the
product is not yet built. It will be tougher to find
spots at larger, revenue-generating companies where
projects have been stalled or cancelled in the current
environment and the current engineer base is enough to
do the job at hand. But, some of the tech companies with
cash on hand will be working on new products to launch
when times get better. Contract work is the key right
now if you are a builder. In order to keep costs down,
companies are turning to project based hiring so that
employees don't remain on the payroll after the job is
completed. While the uncertainty of permanent employment
sucks, hey, it's a job and hopefully it can lead to
something bigger. Placement agents will be notified by
the companies when they need contract workers. Another
route is to form or join a group of builders that does
contract work. A team that can provide an entire
solution to a company's project needs might be an edge
to getting work. Small and large organizations exist in
BC that do contract work and a "full-time" job
with them may result in concurrent projects that give
you more than equivalent full-time work.
The
marketing/sales/business development types are less
likely to find work in the technology companies
themselves these days than the builders. First, there
are simply too many of you out there right now. Second,
slowing sales has meant deep cuts in sales and marketing
staff. Technology companies weathering the storm are
probably focusing on new product development in this
down time which is good for builders, especially those
willing to do contract work as mentioned. My advice to
talented sales and marketing people is to look outside
the technology industry right now. For the marketing
folks, there are many industries in dire need of help
with their e-business strategy or their IT
implementations. Returning to consulting within larger
organizations or on contract to smaller ones is likely
to generate some work. Sales people need to look outside
of technology as well for the time being. Selling is a
very transferable skill. Some industries aren't being
hit as hard as tech right now and need motivated sales
people.
For
the project managers/team leads/product managers that
are out of work today, I have one word: consulting. In
the tech industry and outside it (as in the marketing
and BD roles described above) there is a need for
technology sourcing and implementation to improve
productivity. Like the builders, forming a group of
consultants or joining an existing one is a way to get
noticed more easily and get work.
No
matter what you do or what you did in the technology
industry, if you want work today, you have to get
noticed. Sounds kind of like Fast Company, but you are
in the job of marketing and selling yourself now. Don't
do outrageous cover letters/e-mails or have hot pink
paper to get yourself noticed. You'll look like a flake.
Try the old tested and true method of circulating in
places where employers hang out. Trade association
meetings, trade shows, business forums, IEEE gabfests
and the like are far better places to meet and greet
potential employers than spamming e-mail inboxes. Again,
T-Net: www.bctechnology.com
has a
great list of upcoming events.
There
is no silver bullet and, as shocking as this may sound,
I have not given you any new ideas here. Simply put: The
job market is as tough as it has been in 10 years.
Old-fashioned hard work is needed to get lucky and find
that employer at the exact time they need your skills.
If you are under 35, welcome to your first recession. It
won't be your last.
When
will this all get better? Next year. Maybe. Really. It
will take that long for any economic recovery to trickle
down to general business confidence and increased hiring
practices. The hyper-rapid, Internet time, "grow or
die" decompression will take a long time and the
hard lessons learned mean that employers will take their
time growing the company next time around.
Random
Thoughts -
- Some Good News: Thank You Biotech Sector -
Synapse Technologies, a UBC spin-out seeded by the
Western Technology Seed Investment Fund a few years ago,
has been bought for a total of $24M, a third of which is
on an earn out, by a US NASDAQ listed biotech firm based
in California. Nice job Dr. Jefferies and team. Let's
hope that there is more of this in 2002.
What Do You Think? Talk
Back To Brent Holliday
Something Ventured is a bi-weekly column designed
to supplement the T-Net British Columbia web site with
some timely, relevant and possibly irreverent insight
into the industry. I hope to share some of the
perspective and trends that I see in my role as a VC.
The column is always followed by feedback (if its
positive or constructive. I'll keep the flames to
myself, thanks).
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