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Monday, July 3, 2006 - Page updated at 12:00 AM

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Brier Dudley

Recruiters vying for tech talent

Seattle Times staff columnist

I didn't believe it at first.

A friend in Microsoft's Office group told me recruiters working on behalf of Google are sneaking into buildings on Microsoft's Redmond campus or being let in by friends. Then they dangle jobs door to door until security shoos them out.

That may be a suburban legend, but recruiters say they wouldn't be surprised if the story's true.

The fiercest competition in the region's tech industry now seems to be among the headhunters.

Venture money is flowing into startups, Microsoft is ramping up and companies from all over are trolling local waters for talent.

Recruiters are probably making more money than a lot of their clients. Taxable income grew 156 percent over the past four years at the state's roughly 300 employment agencies. Last year, their taxable income averaged $1.7 million.

That's a good indicator of hiring activity, but it raises questions about the supply of talent. The feeding frenzy has also led to some unscrupulous behavior.

"I just got the impression when I was doing my last job search there were a lot of slimeballs out there," said Nancy Corbett, a former T-Mobile USA hiring manager from Monroe who has dealt with more than 100 recruiters over the past decade. "Like the ones who would call up and say they have these great opportunities to present. But really all they want are the names and contact information of people you worked for in the past ... so they can farm your references for leads."

But recruiters, overall, provide a good service, especially for techies who aren't good at networking, Corbett said. So she came up with a few ground rules:

• Recruiters must treat her with respect, and have real jobs.

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• After she expresses interest, recruiters should share the company's name.

• They won't get all of her information until she's scheduled to talk to a client.

• They must keep her in the loop.

For employers, a big question is whether there's enough talent available. In specialized areas, the answer may be no.

"A lot of the positions we're hiring for, we just can't find those people in Washington," said Melissa Acton, principal at Chameleon Technologies in Kirkland.

State labor data say the unemployment rate for software engineers in King County was zero percent as of 2004 — before things really started heating up.

It's not all peachy in tech, however. Telecommunications jobs have dwindled and electronics hardware manufacturing is flat.

This cycle is also marked by a more cautious and rational approach to hiring. Managers have learned to get by with a mix of outsourcing, temporary labor and a core team of permanent workers.

Recruiters make money several ways. They fill temp jobs and collect a percentage of those wages. They also get big fees for filling permanent jobs.

As demand grows, recruiters can charge more. In 1999, fees went up to 30 percent of a job's first-year salary. The rates fell by about half three years ago during the slump.

"It's back to 20 to 25 percent, which most people think is pretty fair," said Rob Meredith, co-founder of Matrix Resource Partners in Bellevue.

That means tech companies are paying fees up to $25,000 to fill a $100,000 programming job.

No wonder bounty hunters are prowling Microsoft's campus. The company might have to put up barricades, or it may never finish Windows Vista and Office 2007.

Brier Dudley's column appears Mondays. Reach him at 206-515-5687 or bdudley@seattletimes.com.

Copyright © 2006 The Seattle Times Company

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