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Technology Jobs Contract
A bi-weekly column with timely, relevant and possibly irreverent insight into the BC technology industry.

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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