Employee Exodus

Those of you lucky enough to be reading this likely have something that about 300,000 people who used to be in this industry don't: a job. While investors and Wall Street fret about the future market capitalization of vendors and carriers, the heaviest impact of this year's telecom train wreck has been the human toll of jobs lost. Large companies such as Lucent Technologies, Nortel Networks and WorldCom have sliced enough people off their payrolls to populate a midsize city.

However, according to executive recruiters, the outlook for 2003 isn't nearly as bad — in part because of all the contraction that has already taken place, particularly among vendor payrolls. At the same time, the head count reduction has left some gaping holes that must be filled.

“The vendors are the guys who have taken a beating,” said Ron Sege, chairman of the Massachusetts Telecommunications Council and president and CEO of Ellacoya Networks. “Clearly, on the long-haul end of things, that's where most of the contraction has been.”

In fact, in a survey of the overall technology industry in Massachusetts, the MTC found telecom employment within the state jumped 40% since 1998, fueled in large part by big companies staffing up. And more recently, though employment at large companies has plunged, overall job growth is still in positive territory because small entrepreneurial companies are picking up the slack.

In other states, those on the services side say attitudes have also changed about working for older, more established companies. “Today, the stability of 75-year-old companies is a big factor,” said Marty Travers, vice president of development at Black and Veatch, a Kansas City-based engineering firm. “We found more people applying for jobs in part because of the stability.”

While no one is predicting a return to the days when workers could dictate the terms of employment to desperate companies, some of the more forward-thinking human resource managers have started focusing on retaining talent, according to Louise Goss-Custard, telecom search specialist for executive recruiters Russell Reynolds Associates.

“For the present, retention of key executive talent is much easier than it has been in the past,” she said. “At the moment, people are just glad to be employed. It's enabled HR people to breathe a sigh of relief.”

But keeping those people when the market turns around will require more innovative strategies than in the past. Because of the stock market's dive, executives have become jaded about options, the key element in talent retention during telecom's growth spurt.

At the same time, the perks lavished on rank-and-file personnel — such as masseuse visits, free cocktail hours and well-stocked game rooms — have largely disappeared. In their place are benefits such as professional development coaches.

“The more progressive HR people are laying the groundwork,” Goss-Custard said. “They're doing things that make the employees feel more valued.”