Boston Business Journal - November 5, 2009

IT shop tries to hire its way out of slump
Boston Business Journal

While larger competitors cut staff and closed offices, a Route 128 information technology services company piled on during down-revenue months, increasing its Bay State headcount, according to a Boston Business Journal survey published this week.

With competitors’ IT headcounts holding level at best along the Massachusetts tech corridor, Wakefield-based Eliassen Group Inc. increased its in-state presence by a double-digit percentage, adding 39 consultants here for a total of 381. The company is expecting a drop in 2009 revenues, but Dave MacKeen, president of Eliassen’s IT staffing group, said it has had to hire to win consulting contracts that require specialized skills or with customers who feel empowered to be picky about talent.

Generally, the market for IT consulting remains in the doldrums. Earlier this month, Gartner Inc. predicted global IT services spending in 2009 will drop 3.1 percent below last year’s number, to $781 billion. The IT services market will grow in 2010, but it isn’t expected to recover its 2008 size before 2012, a Gartner executive said earlier this month.

While Eliassen added, IBM Corp. (NYSE: IBM) - historically the biggest IT consulting firm in the state - lowered its headcount by 18.2 percent, losing about 150 of its Massachusetts consultants, the computing giant reported. The other three consulting firms in the top five reported steady head counts. Virginia-based Computer Sciences Corp. (NYSE: CSC) assumed the top spot on the list, but the company did not hire any new staff.

Regional managing director Michael Staff said an apparent increase was due to an employee classification change inside the company. Another firm in the top 10, Tata Consulting Services, closed two Connecticut offices.

Eliassen posted $99.6 million in 2008 revenues and expects that number to drop by 10 percent in 2009, MacKeen said. Nonetheless, the company has hired new consultants every month this year, MacKeen said. Eliassen has been chasing more specialized professional services contracts, requiring niche skills that the company has had to recruit fresh talent to fulfill. In addition, in a down economy, clients feel they have the opportunity to demand better talent, he said.

For Eliassen’s ability to hire to meet those demands, MacKeen credited a company strategy that aggressively emphasizes recruitment.

The company compensates its recruiters the same way it does its account executives, he said. As a result, the average tenure of a recruiter at Eliassen is 12 years. “Top consultants can go anywhere. Why come here?” he said. “It’s because of relationships with senior recruiters.”

Eliassen employs 674 IT consultants total. It employs 327 people in Massachusetts and 784 in total, according to the BBJ survey.

Meanwhile, although new IT projects are slow coming, customers are stretching existing projects, MacKeen said. Eliassen’s average project duration has gone to 12 months from nine months. With the low likelihood of new projects making it past budget cuts, managers are cramming their IT priorities into existing projects, he said.

Since its post-tech-bubble nadir at $27 million in 2002 revenue, Eliassen has grown significantly. The company hopes the money it’s spending now will put it in position for fast growth later.

“We’re a little ahead of the curve and we’re finding more talent than we’ve ever been able to find before,” MacKeen said. “I bet 2011 and ’12 we’re substantially bigger.”