IT recruitment: IT bounty-hunters go in search of a bonus

`Refer-a-friend' schemes offer financial rewards and help to fill the skills gap, but there are pitfalls. Rachelle Thackray reports.

Solipsistic computer "geeks" used to unite only when trying to stave off accusations of being square and boring. Now they are teaming up for a wholly different motive: to cash in on the desperation of companies wanting skilled IT workers.

The shortage of people to fill vacancies in an industry that has grown, and will continue to grow, at an exponential rate, is legend. With the dual implications of EMU and the year 2000 for IT, companies need extra staff in addition to those dealing with day-to-day business. Some estimate that in the UK alone there are 50,000 unfilled spaces.

Increasingly, companies in search of staff are bypassing agencies and enlisting existing employees to lure friends and ex-colleagues. Such "refer- a-friend" schemes offer employees a bonus of between pounds 250 and pounds 2,000, and shrewd practitioners are seeing the trend as an ideal opportunity to exercise entrepreneurial flair. Why stop at one friend when you can work through an old employer's entire phone directory?

Anthony Willis, managing director of the recruitment agency Harvey Nash, warns of the pitfalls. "If you make the bounty high, you encourage your workforce to recommend every single person they know. You end up with surrogate recruitment consultants; they tell all their friends, and it can create friction with human resources departments.

"I have heard horror stories where people are literally thinking, `It's pounds 1,000 a person'. They are phoning people up and saying, `Come over and I'll split the fee with you'."

But Brian Griffiths, of the IT services company Keltec, who is raising the company's reward from pounds 250 to pounds 500, estimates that 15 per cent of staff were recruited by friends, and says the scheme can be more successful than using an agency. "The quality of staff you tend to get, in our experience, is higher. People don't want their friends to come into an environment they won't enjoy. I'm quite surprised at how positive staff have been in looking for people - in fact, some were doing it already, irrespective of financial reward." He admits, though, that business relationships can be jeopardised: "If a supplier poaches someone, it does create bad feeling."

Meanwhile, some employees are being offered a "loyalty bonus" to see through the turbulence of the year 2000 - millions of lines of Cobol need to be rewritten, for example.

Those with marketable skills increasingly know their worth down to the last zero, and can choose their ideal position at leisure. But first-timers who are rushing for high rewards are finding that it's not as easy as it looks, says Dominic Barclay, a recruitment consultant at Huxley Associates. "People think they can just go and do a course and walk into a job, but that doesn't happen. We get 50 CVs a day, but many are lacking hands-on experience. Being a graduate makes no difference. My advice is to take a year off and get a placement; you need commercial experience in an IT environment."

IT companies are certainly courting graduates more vigorously than before, but Anthony Willis claims that the compliment is not being returned in equal measure. "IT is still not seen as a sexy career," he says.

As well as the struggle to upgrade graduates' experience level to that of the market-place, he sees another gap opening up as experienced workers opt to contract for rates of up to pounds 1,500 a day - instead of agreeing to full-time employment.

"Companies want people who can hit the ground running, but the problem is that the pool of permanent staff to pluck from is diminishing," Willis says.

A survey commissioned by Microsoft found that a fifth of permanent staff said they were either "extremely" or "quite" likely to start contracting out their skills in the next 12 months. The survey also revealed a growing resentment about high salaries, voiced by universities and public-sector employers. "The limited number of highly skilled people are priced out of the general market and captured by companies which are rich, and the rest are not up to the standard; individuals are trying to drive themselves up the ladder too quickly," said one respondent.

Networking and operating systems skills - such as Windows NT - were seen as being in shorter supply than software development, programming and technology skills. Of database skills, Oracle was the most in demand. When it came to the search for staff, companies in the financial sector had the most problems; 13 per cent had more than 100 vacancies.

Promises of training and development, companies are realising, are often the most effective bait to hook and keep desirable employees - a notion endorsed by the Microsoft survey, in which IT managers rated training and development as 10 per cent more likely to retain employees than a high salary. Neil Rae, who carried out the research, says: "It means you are making them part of your organisation, and people react positively to that."

Anthony Willis adds: "You have to bear in mind the mindset of the IT professional. The one thing they are paranoid about is losing out in the race to update their skills.

"The last thing you want is to be pigeon-holed as obsolete, so anyone offering cross-training is popular."