Tech Hiring Pinch Keeps Middle-Market Firms Hungry

New York, NY— It’s been the talk of economic developers for some time, but a tax credit on all labor directly involved in the development of “interactive products” appears to be giving New Orleans the winning hand in one of North America’s most competitive talent spaces — Web design and IT talent.

“If we’re being honest, the answer is ‘No, we do not have enough local talent to fill all of this demand,’ but the good news is that people are willing to move here, and while this requires some recruiting, it seems to be working,” explains Michael Hecht of Greater New Orleans, Inc., a local economic development nonprofit group reporting that New Orleans has enjoyed a 29 percent increase in IT employment since 2009.

Nevertheless, the appetite for IT talent appears to be escalating everywhere as mobile and Web-based technologies intersect and create even more demand for Web-savvy professionals.

“Our growth is really being driven by what our clients are looking for. And it’s not really any one technology. In fact, it’s all technologies related to the Web, social media, kiosks, apps — and it’s being driven by how our clients want to connect with their customers,” explains Kevin Quigley, executive vice president of St. Louis–based experiential marketing agency Switch.

Last year, Switch added 15 full-time hires, bringing it to 130 employees — all of whom now reside inside the firm’s 100,000-square-foot St. Louis headquarters.

“So much of what we do these days requires a digital component. It comes down to the philosophy that if we find someone we believe is very good, we hire them — and then find something for them to do.” says Switch CEO Mike O’Neill.

Nevertheless, when it comes to Web-based businesses recruiting talent, middle-market firms continue to turn an envious eye toward Silicon Valley.
“Montreal is an amazing place to start a company and advance into the growth phase. Once we’ve accomplished this, then definitely opening up an office in the Valley makes sense,” says Martin-Luc Archambault, of Montreal’s Wajam.

“It’s not the number of job candidates — it’s that we’re very picky,” says Archambault, who leads the firm’s product development in addition to overseeing day-to-day operations.

“By the end of this year, if we have 50 employees and they are the right people. I’ll be much happier than if we are at 75 employees and have a number of people who just don’t fit in,” explains Archambault.

Few disagree that the IT hiring challenge quickly becomes magnified inside the tech companies themselves. When Act-On Software of Beaverton, Oregon, ended its 2012 fiscal year last December, its 140-member workforce may have appeared somewhat plus-sized for a firm garnering roughly $10 million in annual revenues.

However, as is the case with many high-growth companies, Act-On’s current workforce number says more about where it’s headed than where it’s been, and after tripling its sales for 2 consecutive years, you might imagine that the software firm’s management is being careful not to fall behind the firm’s growth curve.

“I do at least half the reference checking of the candidates coming into my group, so if they have three references, I’ll call at least one or two of them, and that is what you will find throughout the organization,” explains Atri Chatterjee, Act-On’s chief marketing officer (CMO), who says that it is typical of the firm’s management to remain very hands-on in most aspects of the company’s operations.

Such a hands-on approach is also favored by Mike Dinsdale, CFO of DocuSign, a San Francisco–based firm whose tech offerings enable customers to secure legally binding signatures over the Internet.

“I just did an employee onboarding meeting where I did a CFO welcome type of intro to 33 people who were recently hired,” explains Dinsdale, who says that the firm’s workforce grew to 400 in the first quarter of 2013 and will likely number close to 600 by year-end.