In this economic downturn, some photonics companies are downsizing while others are retaining their engineers and redirecting their efforts toward R&D in preparation for a recovery. At the close of 2001, the photonics job market found itself 180 degrees from where it had been at the end of 2000. Employers hold all the cards in this new environment, and those sign-on bonuses and stock options that were once commonplace are now reserved for the select few. Yet, there is a segment in the industry that has managed not only to weather the storm, but also to stand tall in the eye of the hurricane. Engineering professionals are surviving in this economic downturn because they have invented their way out of the crisis, forging their own economic stimulus. They are still in demand and making better salaries than ever. Room at the top There is simply no substitute for experience. As the engineering population moves toward retirement age, the need for experienced employees to fill top-level posts becomes critical. Human resource managers from a broad range of photonics companies say they simply cannot afford to let engineers go because they fear that they may not be able to replace them. Regarding hiring in the photonics industry, Lynn Searls, human resource manager for Burleigh Instruments Inc. in Victor, N.Y., doesn’t believe that the downturn has helped or hindered the situation. “Photonics has the same problem it’s always had,” he said. He added that it’s still difficult to find qualified photonics engineers and important to keep the R&D people required to turn a company around; R&D is vital to staying competitive. “We’ve done everything possible not to lay off engineers. If we lost somebody, it would be impossible to get them back again.” Salary information seems to support his contention. Overall, salaries have increased slightly. Some companies surveyed have reported increases in the past year of as much as 8 percent for engineers and 10 percent for technicians. Cutting Edge Optronics Inc., a St. Charles, Mo., company that produces laser modules, industrial lasers and laser diode assemblies, is hiring both technicians and engineers. Neil Grebing, human resource manager, said that, when things slow down in the US, orders from overseas usually fill the gaps. Since the company was purchased by TRW last year, it has added one employee every week, almost doubling its size from 52 to 92. “We’ve had to look far and wide to find qualified people,” said Grebing. Most of the engineers are already in place, and the emphasis is on technicians and team leaders. After the purchase, a pay increase of approximately 7 to 8 percent was given. “We were below market for a number of positions,” he said. He anticipates a further increase of 3 to 4 percent. One might argue that Cutting Edge’s growth is an extraordinary case, considering that other companies have been forced to cut back. Yet, even companies that are undergoing hiring freezes, such as 3M in Columbia, Mo., and ESI in Beaverton, Ore., are giving modest salary raises of 3.5 and 5 percent, respectively. Safety in numbers Most agree that the only way out of the current situation is innovation. Engineers must manufacture a new economic stimulus. A tall order, perhaps, but one that is not unreasonable, considering that 50 percent of the economic growth experienced in the US since the end of World War II has come from advances in technology. During the slowdown, companies that have effectively been sidelined by the market delirium are taking time to refine their products by improving capacity and throughput. This year will bring a reintroduction of a series of devices that have been dramatically reconfigured. Benoit Belisle is director of human resources for Lumenon, a maker of passive optical components for dense wavelength division multiplexing (DWDM) in St Laurent, Quebec, Canada. He said that the downturn in the telecom sector forced Lumenon to pull back and go into an R&D phase. He believes the focus on high performance has made it a better company with better products. Michael Kauf of Excellon Automation Co. in Torrance, Calif., points to the relative stability of the European work force as contributing to its greater use of lasers in manufacturing and drilling printed circuit boards. He said that, while a downturn in the economy results in layoffs in the US, Europe has laws preventing that from happening. In fact, in some cases — in Germany, for example — employers must give their workers up to a year’s notice before letting them go. Consequently, employees have more time to work on such techniques as microvia drilling technology. They have a greater capacity for working on long-term projects that could be suddenly cut from the budget of an American company. Kauf sees this layoff practice as a weakness of the American system that he derisively refers to as “quarter-to-quarter thinking.” The carrot and the stick When engineers are forced out of work, many of them take valuable company secrets with them into the marketplace. This is another reason companies make certain concessions to keep the people they have. When layoffs do occur, however, “noncompete” clauses are strictly enforced. These clauses restrict people from working in a particular area technically or geographically for a certain period of time. Intellectual property attorney Ajay Jagtiani of Jagtiani & Guttag in Fairfax, Va., said that intellectual property litigation typically arises from conflicts in employment agreements as an employee leaves a company. What most people don’t know, he explained, is that it’s possible to negotiate those agreements, particularly with regard to the geographic scope of the restriction and the length of time that it is enforced. Instead of being forbidden to work on the West Coast for a year, for example, an employee may be able to change the clause to a three-month prohibition from working in San Francisco. It is also possible to put a clause into the agreement that invalidates the noncompete contract, depending on the reason that the employee leaves. A provision could negate the noncompete clause if he or she is laid off. But is it ethical to keep someone from earning a living during a recession? In California, these contracts are considered an illegal restriction on an employee’s right to move to a new job. However, that state is the exception. In March 2000, The Washington Post reported a case in Maryland where a company sued an optician who had 23 years’ experience but who had been its employee for only a few months. After getting a new job at a competing company within the 50-mile area designated by her noncompete clause, she was surprised to find herself the subject of a lawsuit, despite the fact that she had no apparent proprietary or confidential knowledge. In a Retention Practices Survey conducted by the Society for Human Resources Management (SHRM) in Alexandria, Va., 36 retention tools were ranked on a scale of effectiveness from one to five. Noncompete clauses ranked second-to-last at 2.84. Health care, salary, vacation, flexible work schedule and stock options were at the top. Only 46 percent of companies surveyed had noncompete clauses, and less than 1 percent planned to put them in place. “There is legal speculation over whether it’s effective,” said Kristen Bowl, the society’s spokeswoman. “The courts are not very favorable to them.” However, the more narrowly they are crafted, the more likely they will be upheld. Timing is everything There are conflicting opinions on the qualifications of current job hunters. Some job seekers have been laid off recently from longtime positions, while others who took a gamble with start-up companies but want to return to the stability of their previous jobs, now find that either the jobs or the companies are no longer there. Some human resource managers have privately expressed an almost guilty pleasure over the wealth of talent that’s available. However, not all job seekers in this environment are alike. “Every one of my clients thinks it’s a buyer’s market,” said Jonathan Faber, senior optics-photonics recruiter for A.E. Feldman Associates in Hicksville, N.Y. But the talent that companies are looking for is not apparent in those who respond to ads on the Internet, he said. He thinks some companies are making a mistake by stretching out the interview process because they believe “the ultimate candidate is on the horizon.” A year ago they would interview two or three people over the course of a week and an offer would be on the table. Now, he said, they are meeting 10 or 15 people, and by the time they decide they want the second candidate, he or she is already gone. Ken Clifford, director of marketing at Applied Optronics in South Plainfield, N.J., quantified the market in terms of how many calls he received each week from headhunters. He used to get six or seven calls per week but hadn’t had a single call in three weeks. “How is the job market? It’s lousy,” he said. The economy has affected the technicians and engineers the most. “A year ago we couldn’t get a dishwasher. Now you can get PhDs.” David McCarthy of DWDM Recruiting in Tucson, Ariz., sees the current downsizing trend as a kind of social Darwinism at work, weeding out the chaff and leaving seed grain for a new cycle of growth. “It’s really ugly out there,” he said. “The employers hold all the cards. The people who are going to get hurt are those who either don’t work well in a team or aren’t good communicators. If they are a good engineer but not a star, they are under attack and probably on a list of people that have already been selected for downsizing.” Some will struggle even in a good economy. Occasionally, even the star players have to worry. Some companies are looking to get out of whole lines of business. Anadigics of Warren, N.J., for example, is running for cover, McCarthy said. It is abandoning its fiber business and going back to radio frequency circuitry, he said. “I don’t believe you can be safe anywhere.” According to McCarthy, John Roth, the former CEO of Nortel in Brampton, Ontario, Canada, encapsulated the whole industry when he said, “I don’t think my customers will ever be given $700 billion again.” The dot-coms were judged solely on how fast they could grow. Before, if you had photonics in your name, you got funded. Now companies that have real products are having a difficult time. Optical Micro Machines in San Diego is a leader in two-dimensional microelectromechanical switches and had started making 3-D devices. It got out of that and laid off 100 people because the market wasn’t developing fast enough. Technology comes in waves and generations. McCarthy believes that companies are going to skip a generation. They will continue to make technology A, skip technology B and, when C comes around, get back in. When this happens, the people who have been laid off in the current market will be reabsorbed. Another survey conducted by SHRM concluded that sign-on bonuses are more likely to occur in large organizations. Fifty-three percent of the companies with more than 5000 employees offered sign-on bonuses for nonexecutives, and 72 percent for executives. For companies with fewer than 100 people, these numbers fall to 21 and 28 percent, respectively. Labor economist J. Michael Phillips said there has been a greater emphasis on hard cash compensation. Employees are less concerned with stock options than with job security, and employers are placing greater weight on loyalty. One of the manifestations of this has been an increase in company-sponsored training and job development, with emphasis on internal training and advances from within. Long-term relationships Phillips is seeing an increase in the number of technicians who are being sent into management programs to get their MBAs. He explained that people had been too busy to get this training previously, but now many engineers have extra time on their hands. He said that this is an indication that companies are expecting longer-term relationships and that he doesn’t think we’ll see the kind of career hopping that went on before. A human resource manager for one major laser manufacturer explained that, when the economy was going full force, the company had to settle for people who were not the best candidates or who didn’t necessarily fit with the corporate culture. Now it has its pick. “We also don’t have to throw quite so many things at people, like sign-on bonuses and all the rest. It’s a lot more realistic now.” Sharon Canfield of LightWorks Optics Inc. in Irvine, Calif., agrees. Although salaries have increased because of the higher caliber of people being recruited, the company offers sign-on bonuses only by exception. “We are not freely giving them,” she said. “We’ll do it to keep base salary down or offset relocation expenses.” Not everyone is giving up on glitzy compensation packages, though. Analog Devices in Dedham, Mass., has actually reduced its salaries for upper-tier management and engineering talent by 5 to 15 percent to keep “offer salaries” as competitive as possible. Human resource manager Joe Jivorski said the employees have been compensated in other ways. So far, he said, there has been a “gratefulness in the organization” for the decision to cut back on salaries rather than to eliminate jobs. At the other end of the spectrum are companies, such as Valiant Networks in San Jose, Calif., that are demanding that employees who have been laid off return their sign-on bonuses. John Schuett received a bill for $1250 after he had been released without severance pay. Talk about hedging your bets! Internet recruiting Perhaps one of the biggest changes in recruitment strategies and hiring in the last five years has been the emergence of Internet job sites. Jane Dell’Amore of the National Research Council said that the organization has 255 opportunities for postdoctorates in photonics and optics. However, inquiries with her office have declined sharply because of the Internet. She said people just go on the Web, get the Google download and conduct their own searches. Increasingly, both job candidates and recruiters are relying on the convenience of the Internet to find work and potential applicants. One company, Positive Light in Los Gatos, Calif., now hires almost exclusively from its own company Web site, and a recruiter from Coherent Medical, now Lumenis, in Santa Clara, Calif., said it uses the Internet as a kind of weeding process. Apparently, people who use the Internet are considered more up to date with current trends and technology. Other companies are dipping into the big Internet watering holes like MonsterBoard.com, HotJobs.com, JobTrak, Optics.org and a host of job boards. Crane recommended that, before you post your résumé on the Internet, you should be certain that the job board has a privacy policy in place. You should also know how well its purchasers are screened. What are the criteria for selling your personal information? How are potential employers screened? Can anyone review your résumé, or does a company have to be in Standard & Poor’s? Crane also suggested conducting the transaction with the same precautions and using the identical safeguards that you would with an online merchant. (See sidebar “Is the Web a Safe Job Source?”) Human resource professionals warn of other problems, however. SHRM’s Bowl said that one of the new trends among human resource professionals is to use scanning software that searches résumés by key word. Therefore, it’s critical to use the right words, such as “C++” or “fiber optic,” or the résumé will be rejected. Larry Case of OptoSigma in Irvine, Calif., cautions people not to send their résumés as attachments. He explains that some of the bigger companies have the ability to scan all incoming e-mail for viruses. However, with smaller companies, these attachments just get dumped because they are too much of a risk. You’re better off sending your résumé in the body of the e-mail. Advice from professionals So what’s the secret? Why do some people seem to get all of the offers while others can’t get a break? Is it a secret handshake? A crisp $100 bill slipped deftly into the hand of the recruiter? Actually, it’s neither. Getting a job is just plain hard work. Canfield of LightWorks Optics recommends doing research on the job you’re applying for and sending a cover letter that is targeted to that position. She is always a bit surprised by the number of chemical engineers and lab technicians who apply for optical positions. Jason Dupree, manager of talent acquisition for the Electronics and Technology Div. of TRW Space & Electronics in Redondo Beach, Calif., concurs. Candidates should spend time learning about the company they are interviewing with. “Don’t apply to 15 jobs. It’s unlikely you would be a fit for all of them. And even if you were, pick the best two.” Applying for dozens of jobs only irritates recruiters because they see your résumé over and over. He also insists that résumés should be clean and concise. “Don’t ramble, but include enough information to give an accurate picture of technical skills and accomplishments.” Rose Portillo of Meadowlark Optics in Frederick, Colo., said that job seekers in this market need to be very flexible. Everyone wants to be an R&D engineer, she said, but no one wants to be a manufacturing engineer and do the nitty-gritty work of building things. And above all, be honest about what you’re willing to do. She said that if she hires someone to be a manufacturing engineer who really wanted to do R&D, that person is probably not going to work out. Faber, at Feldman Associates, encourages people to be creative in their job search. He said that, because you may have skills that are attractive to another industry, you should expand your horizons beyond optics, for example, and look at medical technology or military applications. As the telecom industry dumps optical engineers back into the market, people who had grown accustomed to working in teams, doing very specialized work, are finding themselves at smaller companies that expect them to take on more responsibility. Case at OptoSigma said that smaller companies like his want people with a broader range of experience who can do a little bit of everything. He thinks that teachers make very good prospects in this regard. According to Ken Johnson of Spectra-Physics in Mountain View, Calif., approximately 40 percent of new hires come from employee referrals. He looks for people who have experience or knowledge in softer skills — such as teamwork — that will lead to long-term professional relationships in the industry. “Know somebody who knows somebody,” said Case. “I think a lot of tried-and-true methods are effective.” Person-to-person contact is one of them. “Get in front of as many people as possible. And network! 9/11 Jitters Increase Foreign Brain Drain As the economy begins to recover, the crackdown on immigration subsequent to the Sept. 11 attacks could have an important effect on the availability of photonics jobs in the US. Prior to that event, the Philippines and Pakistan were among the top 10 contributors to the foreign work force in the US. India was the largest source, with nearly 40 percent of the total, or about 65,000 migrant laborers per year. According to Valerie Chittendon at the Bureau of Consular Affairs, there were 161,429 H-1B migrants, those with special skills admitted on a temporary visa, in fiscal 2001 worldwide. This is a substantial increase from the cap of 115,000 in 2000. On the Immigration and Naturalization Service’s list of companies with the most H-1B petitions in the country, Cisco Systems, Lucent Technologies and Nortel Networks were in the top 15. As the unsettled regions of the world fall under closer scrutiny from a revamped and revitalized Immigration and Naturalization Service, the steady flow of intellectual laborers could narrow to a trickle. This places a greater strain on the domestic resources of the US and on strong recruiting efforts in Europe. Eileen Schmidt of the Immigration and Naturalization Service said that employer petitions for H-1B visas have not changed. The US State Department has enhanced the name check procedures for the visas, but no other changes have been made. Legislation on Capitol Hill, however, would amend certain provisions of the H-1B program. Regardless, the immigration service still has a 60-day processing goal. It also began a premium processing program in July. For an additional $1000, companies can have their petitions processed in 15 days. Is the Web a Safe Job Source? Although Internet employment sites are popular with job seekers and employers alike, one wonders what risks might be involved in disseminating personal information throughout the global marketplace, where prying eyes can gain access to it. When people put their entire job history, academic record, references and contact information on the Web, are they exposing themselves to identity thieves? Beth Givens, executive director of the Privacy Rights Clearinghouse in San Diego, said that, even though identity theft is on the rise, the methods used have not significantly changed from the old-fashioned Dumpster-diving. The majority of these crimes are committed by individuals working on the inside who have access to the personal records of their clients or fellow employees. Givens said that, in most of these cases of identity theft, the thief does not take on the complete identity of the individual. The cases of a complete takeover are a very small percentage of the total. Some thieves will go as far as reading “who’s who” biographies in an attempt to get mothers’ maiden names and other kinds of personal information, but that’s not the everyday criminal. She recommends that job applicants never put their date of birth or address on an electronic application form. A post office box or e-mail address should be sufficient. Some job boards will request a Social Security number, but this information should never be given until after the first interview. Some companies will use the Social Security number to conduct a background check. However, the consumer should be aware that, in 1999, there were 39,000 incidents of misuse of these numbers. Joanna Crane, program manager for the Identity Theft Program of the Federal Trade Commission, said the Internet is “fertile ground for identity thieves. Armed with a résumé, some criminals can get banks to reveal financial information.” They also use profiles to obtain licenses or to get jobs. It is ironic that your résumé could be used by someone else to get a job.