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Clark Consulting Finds Tech Industry Employment Suffers a Net Decline; Reductions in Force -RIF- on the Rise

NEW ORLEANS--(BUSINESS WIRE)--May 23, 2005--Clark Consulting's CHiPS Pulse Survey of Human Resource Trends--released at the 50th Annual WorldatWork Conference in New Orleans--revealed that turnover rates continue to outpace hiring in the technology industry, producing a net decline in employment levels in Q1 2005. The significant increase of Reductions in Force (RIF) over the past two quarters has played a critical role in this downward trend.

Decline in Employment Levels

-- Reductions in Force (RIF) increased at a rapid pace with over 30% of reporting companies announcing a RIF during Q1

-- This is a significant jump in the number of RIF from 2004 when 13.5% in Q3 and 21.9% in Q4 reported reductions

While the survey found that the technology industry on the whole suffered a net decline in employment levels, the semi-conductor sector provided a brighter outlook with hiring rates exceeding turnover rates for a net employment level up-tick of 2.3% in Q1 from 0.4% in Q4 2004.

The Clark Consulting Technology Employment Confidence Index

Despite the downward employment trend in the tech sector in Q1, Clark Consulting's Technology Employment Confidence Index (ECI) indicates that a year from now, respondents expect the employment outlook to be brighter. The 12-month index reading of 62 indicates that respondents anticipate the employment outlook will be "slightly better" in a year, as compared to the 3-month index number of 54, "about the same." (Editors note: At 50, the Index indicates expectations of no increase in employment; below 50 indicates an anticipated reduction in employment; and above 50 indicates an expectation of an increase in employment.)

Clark Consulting's Technology Employment Confidence Index (ECI) is a forward-looking snapshot of how the technology industry perceives the employment outlook over the next twelve months. Published quarterly, the ECI is based on Clark Consulting's CHiPS Pulse Survey of Human Resource Trends.

Other key survey findings

-- Hiring restrictions are lifting:

-- In Q1 13% of companies reported some form of hiring freeze

-- In Q4 2004 more than double that number of firms, 32%, reported a freeze

-- Merit spending was higher in Q1 than it was in all of 2004, up to 3.56%

-- Companies continue to shift away from stock options to restricted stock as incentives:

-- 24 % decreased options awards

-- 16% increased the use of Restricted Stock

"The combination of institutional investor activism, the impending implementation of accounting for equity instruments, and the relatively weak tech-sector labor market, have all contributed to the reduced use of equity compensation," said Joseph Rich, Executive Vice President of Clark Consulting, "In the technology sector, particularly among high growth and pre-IPO firms, options will likely still be used to attract and retain top talent."

The CHiPS Pulse Survey of Human Resource Trends is a quarterly survey that presents an evolving picture of employment and employment-related practices. One hundred-thirteen technology companies representing approximately 1.3 million employees participated in the Q1 online poll.

For an invitation to participate in this free, quarterly survey, please visit: http://www.clarkconsulting.com/services/surveys/scchips/participate/ participate.shtml (Due to its length, this URL may need to be copied/pasted into your Internet browser's address field. Remove the extra space if one exists.) and select "CHiPS Pulse".

About Clark Consulting

Clark Consulting develops and delivers services and solutions to help companies Keep Their Best People(TM). The firm provides integrated compensation, benefits and financing solutions to over 3,800 corporations, banks, and healthcare organizations. Founded in 1967, Clark Consulting has more than 70 offices nationwide, and is the largest publicly traded firm (NYSE:CLK) of its kind.

Surveys managed by Clark Consulting include: CHiPS Professional and Managerial Total Compensation Survey, CHiPS Executive and Senior Management Total Compensation Survey, CHiPS New College Graduate Compensation Survey, CHiPS Sales Plus Survey of Customer Focused Positions, CHiPS Pulse, a quarterly survey of human resource trends and the new Clark Consulting survey, The Long Term Incentive Report. For additional information go to www.clarkconsulting.com/surveys or call 508-460-9600.

Contacts

Dobbins Communications
Shawn-Laree de St. Aubin, 312-482-8670 ext. 22
sldestaubin@dobbcomm.com