PMI – Houston "The Next Labor Crisis PMI – Houston "The Next Labor Crisis..Déjà vu to the 1990’s All Over Again" 2007 James Del Monte CPC JDA Professional Services, Inc. Intelligence test – with the foot What expectations from this presentation Hand out oath

Success “ . . . Almost 100% of a managers success comes from hiring and retaining good people. Good people don’t make the difference - they are the difference“ - James Del Monte How I started to do this presentation and became a student of my business understanding what impacts it Started my business as a great doer – organized great at executing good at producing results - - wanted to grow – talked to my mentors – education training experience need to get some fast – trade groups – get something done in a volunteer group . What you put in is what you get out – met my wife there needed to lean some management – systems, processes, controls – charts, graphs, goals, milestones management report –and turn over lots of turn over – management was great except for the people -people did things for their reasons not mine and if our reasons were not aligned there are options – the more options people have the less the tolerance level to poor management is Back to mentors and needed to learn the difference between management and leadership

Value of a Professional Organization Leadership Industry/Business knowledge Networking Opportunities Friendship

Hard Questions Part 1 Who are you and what does JDA stand for? What is going on in the employment market? Why is it taking so long to find a position I want if unemployment is so low? Why don’t recruiters return my calls? What does the future employment outlook look like? Presentation was developed from many conversations with project managers and their concerns and frustration We polled 40 CIO’s in Houston to gather information to prepare for this

Hard Questions Part 2 What positions are moving off shore and how does this impact me? Are P/M positions going more contract or Full-Time? Why is it that when I am hiring someone the recruiter's won’t stop calling? Where are the people we need to hire going to come from?

Hard Questions Part 3 What is the future of PMO’s? I’m a PMP why don’t I get respect? How much difference does a PMP make? How do I position myself for a senior management position? What suggestions do you have to keep my staff? Are you done yet? If you finish before me you know what to do

What JDA Does. . . JDA provides clients with a full complement of information technology professionals. Our services are designed to meet the unique and changing requirements of our clients. Full-Time Staffing Contract / Temporary Staffing Who are you and what does JDA stand for? Having fun – honesty integrity quality excellence customer service Kids kept asking for new stuff so finally one said I know what jda stands for - Just don’t ask Special Projects Staffing JDA

Sooo, Tell Me About Your Career. We can help you in one of 2 way – introduce you to competitive positions in the market to help you get the career you want or help you identify you to top talent to build a great IT dept.

Law of Supply and Demand 4Q99 Demand Peaked 1984 2Q01 1995 4Q04 1989 3Q03 What is going on in the employment market? In the peak 2000 there was 4.0% unemployment and 4 million jobs were unfilled. Bottomed in 2003 at 6% Today we are at 4.6% unemployment and it is expected that by 2010 there will be 10 million unfilled positions. In 2003 they say that the US lost 3 million positions and unemployment was at 6% we have fully recovered and have had a net gain over 5 million positions Since 2003 we have had a net gain of 6 million jobs - bls Supply Demand Bottomed Demand Bottomed The demand for skilled professionals peaked 4Q99 and has decreased, bottoming out 3Q03. The current cycle indicates that once again there are more positions than skilled professionals, and this is projected to continue past 2010. Labor Surplus vs. Skill Shortage

National Economic Stats for 2006 National unemployment rate is at a 6 year low of 4.6% National average hourly wage increased 3.85% from $16.10 to $16.72 in 2006, the greatest increase since 2000 National average annual expenditure for 2005 was $46, 409, a 6.9% increase from 2004, and the highest increase since 1989 Stock market prices have been on the rise since early 2003 and they are currently at their highest point since early 2001

Houston’s Economic Stats for 2006 Houston’s unemployment rate averaged 5.1% for 2006, our lowest since 2001 when it was just 4.7% Houston’s average hourly wage was at $19.57 in December 2005, more than $3 above the national average at that same time Consumers in Houston spent an average of $52,998 per household in 2005, 10.3% higher than in 2004 , an increase which is unmatched in at least the past 20 years Hbj 3.07 1.06-1.07 99k new jobs created in Houston metro area – most of any metro area in the country Oil- and gas-related jobs grew the most, with a 7.1 percent increase in the extraction sector and a 12.1 percent increase in support activities. Architectural and engineering services jobs rose by 11.1 percent, while computer systems design and related services jobs increased by 7.2 percent and jobs in durable goods manufacturing rose 5.9 percent. "The BLS numbers show Houston on a dramatic growth trend, outpacing the rest of the nation in jobs gained," said Jeff Moseley, president and CEO of the Greater Houston Partnership. "This is great news for our region and further validates our board's vision of contributing to the creation of 600,000 new jobs and $60 billion in capital investment by 2015."

National vs. Local Economies STATISTIC NATIONAL HOUSTON HOW WE COMPARE Unemployment Rate (Avg. for 2006) 4.6% 5.1% +.5% Average Hourly Wage (Dec 2005) $16.35 $19.57 +19.7% Average Consumer Spending Per Household (2005) $46,409 $52,998 +14%

Most Requested Information on JDA web site How to write a resignation letter article High cost of turnover article We knew the market changed when our web site activity changed

Labor Surplus vs. Skill Shortage Job Creation 1 million new IT positions from 2004 – 2014 that’s a 30% increase (BLS) There are people but are they the right people

Candidate Population 25% A Players 50% B Players 25% C Players Everyone is working

80% of Job Growth Will come from companies with less than 100 employees In Houston there are less than 4,000 companies with over 100 employees These companies need the same services as large companies - just not all the time Houston has over 87,000 businesses What IT services do they need? Job creation from smaller companies Big companies don’t spawn new technologies or create new job they buy them from smaller start ups

Houston Companies by Number of Employees 86000 businesses in Houston

Big VS Small Traditional business don’t create jobs or invent products they buy them Job Growth vs Job Creation Risk Aversive – more committee decision make to limit career risk Traditional business don’t create jobs or invent products they buy them Job growth vs job creation Risk aversive – more committee decision make to limit career risk

2007 CIO Survey Results QUESTIONS INCREASE DECREASE STAY THE SAME Company Growth in 2007 77.10% 2.90% 20% Department Budget in 2007 74.30% 8.60% 17.10% Staffing Level in 2007 75% 3% 22% Base Salaries in 2007 89.30% 10.70% 0%

2007 IT Hiring Percentages Jda poll 40 cio’s in Houston from large to mid size companies about their expected hiring for 2007 75% of those companies are additional head count either full-time or contract Only 3% or 1 expected to decrease Hbj 3.07 1.06-1.07 99k new jobs created in houston metro area Oil- and gas-related jobs grew the most, with a 7.1 percent increase in the extraction sector and a 12.1 percent increase in support activities. Architectural and engineering services jobs rose by 11.1 percent, while computer systems design and related services jobs increased by 7.2 percent and jobs in durable goods manufacturing rose 5.9 percent. "The BLS numbers show Houston on a dramatic growth trend, outpacing the rest of the nation in jobs gained," said Jeff Moseley, president and CEO of the Greater Houston Partnership. "This is great news for our region and further validates our board's vision of contributing to the creation of 600,000 new jobs and $60 billion in capital investment by 2015."

Who’s Looking Active – 32 Passive – 47 Not at all – 21 Cio survey results Ask who is looking Exclude those with their bosses there Active – unemployed mentally unemployed Passive – have a resume updated last year keep your ears open Not at all Who has intentionally changed job in the last 2-5 years Who moved for more or less a lateral position doing similar things for a little more $$ or better location from something vs moving to a position that was clearly a step up People move from something vs to something People never stop looking People will join a company based on the sizzle of the company but they stay based on the management and team they are working with How much of your success is based upon the people on your team? How does it make you feel that 79% could walk out the door next week?

Employee Churning With full-employment there are not enough existing resources to fill the void this will cause a churning of people moving from a to b to c When demand exceeds supply what happens to price?

Position Demand . . . 10 Mgmt./Conslt. 8+ Yrs. 30 Sr. Tech/ 4 – 8 Yrs % Skills Yrs. Exp. 10 Mgmt./Conslt. 8+ Yrs. 30 Sr. Tech/ 4 – 8 Yrs 1st Line Mgmt 60 Staff/Tech 0 – 5 Yrs Why is it taking so long to find a position I want if unemployment is so low? Peak demand for 2-5 years of experience - why? more Indians than chiefs Labor pool has more SR level people in - what happens to them? Contract, retooled Some major oil companies have 50+ % of their IT staff approaching 50+ and will be looking at retiring at age 55

Talent Pool 60 Mgmt./Conslt. 8+ Yrs. 30 Sr. Tech/ 4 – 8 Yrs % Skills Yrs. Exp. 60 Mgmt./Conslt. 8+ Yrs. 30 Sr. Tech/ 4 – 8 Yrs 1st Line Mgmt 10 Staff/Tech 0 – 5 Yrs Peak demand for 2-5 years of experience - why?more Indians than chiefs Labor pool has more SR level people in - what happens to them? Contract, retooled Some major oil companies have 50+ % of their IT staff approaching 50+ and will be looking at retiring at age 55

Position Demand . . . Talent Pool . . . 10 Mgmt./Conslt. 8+ Yrs. % Skills Yrs. Exp. 10 Mgmt./Conslt. 8+ Yrs. 60 8+ Yrs 30 Sr. Tech/ 4 – 8 Yrs 30 1st Line Mgmt 4 – 8 Yrs 60 Staff/Tech 0 – 4 Yrs 10 0 – 4 Yrs Why don’t recruiters return my calls? Peak demand for 2-5 years of experience - why?more Indians than chiefs Labor pool has more SR level people in - what happens to them? Contract, retooled Some major oil companies have 50+ % of their IT staff approaching 50+ and will be looking at retiring at age 55 Also in our poll 80 % of the cio’s were wither actively passively looking Talent Pool . . .

Disconnect IT employment levels exceeds pre recession or pre-bust levels. New college enrollment for MIS, CIS, and CS students from 99 to fall 00 increased 13.8% from 28,018 to 31,881 and remained at record highs through 2002. New enrollment numbers plummeted 17.9% from 02 to 03 and another 26.8% to 18,046, the lowest number on record.

Market Shift Candidate Position 2000 - 2003 2004 - 2010 The hardest position to get is the first one – this position will also set the trend for your entire career Once you have 2years you become mid market and 60+% of position are in this range. The job market has shifted from an Employer’s Market to a Job Seeker’s Market - to a Combination Market.

Where Do All of the People Come From? Internal Full-Time Staff Low Cost Providers Network Integrators Hardware Support Providers Software Developers/Support Software Providers Voice Data Providers Contract or Temp Labor Training Companies Management Consultants What does the future employment outlook look like? Where are the people we need to hire going to come from? 34 million American workers 33% are now considered to be contingent workers – temps part-time consultants free lancers self employed Close to 10 million workers are considered self employed 9%

Global Competition

How Work Gets Done Off-shoring Out-sourcing What positions are moving off shore and how does this impact me World Wide Shortage Project Managers Engineers Oil and Gas people Out-sourcing

Positions of Tomorrow High touch – direct value to business – cross functional SME Nurses Current globalization creates a market for PM, BA, and Functional Analysts who are needed to manage 3rd party resources.

What are we best at? Giving people what they need not what they ask for. Innovation and creativity

Top Reasons to Work Contract It will lead to permanent employment Flexibility of schedule To obtain experience/training Diversity in jobs/challenge This was the only type of work I could find The money is better Family or personal obligations Changing careers and need more experience Source: American Staffing Association Workforce Metrics Choosing Temporary Work Are P/M positions going more contract or Full-Time?

Today’s Menu Your Company The Market Sets the Price Yes No Annual Increases 5-15 % 3-6 % Today’s Menu Business Analyst $50K - $ 80K Project/Team Leader - $65K - $110K Large Company Data Center Manager $75K - $105K Data/Voice Comm Spec. $55K - $ 95K . NET Market Value Supply and demand sets the price

Skills CIO’s Look For Personal Inventory Business/Functional Project Management Communication - written and oral Presentation Problem Solving Critical Thinking Leadership Organization Skills Time Management Attention to Detail Learning Ability Flexibility What is the future of PMO’s?

PMO Penetration From cio survey 55% had formal pmo’s – most were at beginning phases – most were dealing with IT projects and were not enterprise wide Those that did not have formal pmo had dedicated project managers – there were a few smaller mid size companies (less than 50 IT people)

The PMO I hear a lot from p/m about wanting a seat at the table and a way to be more strategic Only 31% consider their PMO to be strategic but most were involved in the business planning process Surprise was the way pmo’s success was measured

Business Strategy Vision Mission Statement Clients Candidates Internal Strategies Project Portfolio Long Term Objectives (Branding) Help Companies build great IT Departments. Help our Candidates have the career they want. Company of choice for our industry. Why were so few considered strategic? I belong to a ceo round table and we went thought this elaborate multi year business planning process defining mission vision goals branding a project portfolio and implementation plans – once the strategy was developed it became all about implementation and very tactical in nature until the next planning process or something changed in the business

What You Can’t Measure, You Can’t Manage With no measurable criteria for a PMO, Businesses are not going to see the added value and budgetary increases will cease. Show your worth, give measurable results to show progress and proof of value.

Hiring a Project Manager No one required as a hard requirement Only 35% preferred Don’t know how many of them had pmp’s them selves

Formal Education vs. Certifications 50% of Companies questioned, claimed no better results with a PMP certified Project Manager than with one who has qualified experience but no certification. More than half of the Companies preferred a formal degree and; 71% prefer an advanced degree before promoting to a leadership role. The piss off slide Probed into this question about results Basic knowledge but doesn’t mean you can get results Leadership and team development was key to success More than 50% of the cio’s had mba’s

Experience vs Degrees for Management Most looked at what you have done and your accomplishments first vs education and certifications but all think being equal the more education and certification you have the better. Small companies higher level because it give comfort level – perception of knowledge Bigger companies more willing to pay for it

#1 Success Factor of Executives Hire Good People

A faithful employee is as refreshing as a cool day in the hot summertime. Proverbs 26:13

Why People Stay Like the people they work with – mostly their manager Control and independence over work Flexible work schedules Decision making Increased levels of responsibility Reward and recognition A sense of belonging Fun

Why People Leave Bad management Lack of recognition or reward Too much travel Bad work environment Lack of job security Lack of training Long commute Pay/benefits Uncertainty about future Lack of career advancement

10 Ways to Keep Them! Hire the right type of person: A or B Have people grow into the position vs. out of the position Rotate responsibilities and cross-train, offering a variety of functions and responsibilities Pay above-market cash or bonuses Use non-cash rewards and recognition for results/ efforts

10 Ways to Keep Them! Create a team environment / team building Use temps or contractors for more routine work Encourage communication with manager Make proactive counteroffers when you have someone you want to keep Set clear expectations and give feedback on how they are doing

Bad Seeds Get rid of bad seeds and people who don’t want to be there – the dominant attitude will proliferate through the group and pollute the team.

How This Impacts You Employer Employee Higher Turn Over Higher Employee Cost Positions Open Longer Higher Hiring Cost Add Fees to Budget Employee More Career Options Training Bonuses Increase Base Salary

Solutions for JDA Clients Review and Revise Retention Plans Make Salary Adjustments Based on Market Rates Spend Time & Money Training & Developing Staff (includes cross training) Hire Interns &/or Part-Time Students Encourage Entrance into the Field by Getting Involved with Local High Schools Adopt a Proactive Recruiting Model – CALL JDA!!!

JDA Resources Salary Survey Hiring Trends Cost of Turn Over Counter offers Hi-Tech Calendar Hot Jobs Interviewing Tips

www.jdapsi.com 701 North Post Oak Road Suite 610 Houston, Texas 77024-3818 Phone: 713/548-5400 www.jdapsi.com Closing thought – don’t hold in your gas – a Harvard medical research team has found that gas permeates up thought your spine and loges itself in the base of your brain and that’s where crappy ideas come from. Contract and Full-time Staffing Information Technology Staffing Specialists Consulting and Special Projects