Though the wireless industry remains an employee-driven market, signs indicate the intense demand for employees domestically may be slowing as companies are becoming cost sensitive under intense competition and merger-and-acquisition activity increases.
Two years ago, when new personal communications services operators were building their armies quickly to enter the mobile phone market, industry leaders were concerned about the shortage of qualified employees in all sectors, ranging from executive level to customer service. Though shortages remain, especially in the engineering field, industry recruiters indicate demand for employees is slower than in the past two years.
“We’ve seen demand come down quite a bit from two years ago when PCS carriers were in a rush to build the primary MTAs. There does not seem to be that urgency now,” said Rich Savona, director of Atlanta-based Adex, a recruiting firm on the technical and engineering side. “Secondary markets are being built out right now, but there’s a cost-conscious management approach to those markets as opposed to anything goes and spend what you need to.”
Some of the industry’s largest companies are embarking on major restructuring initiatives, indicating the need for companies to become as lean as possible in the increasingly competitive marketplace.
AT&T Corp. early this year announced layoffs and plans to integrate its wireless business with its long-distance, local and Internet service divisions. As a result, the company is realigning its regional offices.
Paging Network Inc. announced plans in February to cut 30 percent of its work force, affecting customer service, billing and accounting, order fulfillment, inventory management and some technical operations. The company is stripping its regional operations of these responsibilities and instead is having these functions performed on a national basis. Arch Communications Group Inc. just last month announced a major restructuring plan, which includes cutting about 10 percent of its 2,800 work force, while Motorola Inc. realigned its communications businesses and plans to lay off 15,000 people worldwide.
The paging industry, whose companies are restructuring and consolidating at a fast rate, is almost at a hiring standstill, say recruiters. Mergers and acquisitions in the cellular industry are on the rise, giving PCS operators some choice candidates for upper-level positions.
“The rate of acquisitions has been high in the cellular industry. Because of subsequent layoffs, PCS has picked up a bunch of these people. [The PCS industry has] had no shortage effectively, nothing like what was being projected a year-and-a-half ago,” said Bob White, president of Pennington Consulting, an executive search firm in Pennington, N.J.
“We see an emergence of people we didn’t see a couple of years ago. Mergers have brought the top level people out of the woodwork,” said Scott Statson, partner and executive recruiter with Sales Executives Inc. in Troy, Mich.
Turnover still high
Because the wireless industry still is an employee-driven market, turnover remains high as employees look for better, higher-paying jobs. Mergers and acquisitions only complicate the problem. They not only result in layoffs but higher-than-normal attrition rates as employees become dissatisfied after the transactions.
“The increasing number of mergers and acquisitions has only fueled the reality that we live in a free-agent nation,” said Robert Sweetser, partner with Warren, Morris & Madison Ltd., an executive search firm in Del Mar, Calif. “The days of individuals being really loyal for a long time are certainly behind us.”
Sweetser said mergers, in most cases, cause executives to jockey for positions in newly converged companies. Uncertainty also drives employees away.
“One of the more common impacts of mergers/acquisitions on the work force is the typically very lengthy period of not knowing what the outcome might be,” said Sweetser. “Obviously, there are the processes involving due diligence and government scrutiny. It may take an inordinate amount of time due to unusually intense scrutiny, or the whole deal may fall through.”
Statson said employees at all levels are becoming aware their company could be sold at any time and “want to keep their ear to the ground in case something comes up … It’s definitely a game of musical chairs,” he said.
Some executives actually look to work for companies that are poised to merge, said Sweetser, as many executives have seen at least one merger in their tenure and know they can receive a good bonus in the form of stay packages, severance packages or stock deals.
“Now people are starting to look for ventures poised to sell, since it’s a short cut to building something from the ground level,” said Sweetser.
Employees’ stock options typically mature once their company merges or is acquired. Employees with no incentive to stay can walk away with huge sums of money and work for another company, said White.
International options
The international front also may throw some challenges toward U.S. firms trying to keep qualified personnel. Bruce Daniel, owner and president of The Compass Group, a technical recruiting firm in Whetherford, Texas, explained that the massive buildout of wireless systems around the world, especially in South America, is poised to have a large impact on the domestic wireless industry because workers are attracted to international projects and can command good salaries.
“For several years to come, there’s going to be those huge international projects that will affect personnel positively,” said Daniel. “If an operator in the U.S. loses two experienced switch technicians to a project in South America, it has to replace them with less experienced people. It keeps the job market somewhat slanted.”
“South America is a hot market,” said Savona. “Recent license awards in Mexico indicate the demand for people is there. That continues to drain the domestic work force.”
Daniel said workers can command at least two to three times more than what their salary would be working in the United States and oftentimes don’t have to pay U.S. taxes.
“A lot of people are intrigued because of the financial rewards,” said Daniel.
