SYDNEY, Australia -- "I'll take three COBOL programmers, six-month contract, delivery in September!"
While staff aren't yet a pit-traded commodity, nearly 200 information-technology workers in Australia and New Zealand have been delivered against novel over-the-counter futures contracts just like, well, hogs, wool, or cotton.
Modeling the contracts on traditional exchange-traded instruments, most of the IT-staff futures sold thus far have been for workers with mainframe computer skills, usually COBOL, for delivery three to six months out, according to Sheryle Moon, spokeswoman for the Brisbane-based Andersen Contracting. Her company began developing such agreements two years ago. The average employment duration has been six months, with most personnel being ISO 9002 qualified, an industry-skills benchmark.
Futures are contracts that allow buyers to purchase commodities -- everything from precious metals to currency to agricultural products -- for delivery at a guaranteed price at a later date.
Whereas commodity futures are often a complex bet on how market prices for gold or coffee will move over time, the IT futures are chiefly a means of allowing employers to ensure staffing and wage levels. This allows business to avoid a last-minute scramble for qualified workers.
"In a high-demand, low-supply environment, clients planning projects can have a better level of comfort; they'll have the resources they need, rather than waiting until the bitter end and competing in a very tight market," Moon says.
Using futures, infotech companies can hedge "personnel risk" just as they hedge foreign exchange, interest rate, or commodity-price risk. And given that labor costs are a large part of a company's expenses, locking in the cost and availability of a workforce can be as important as hedging other risks, Moon argues.
Like everywhere else, Australia has a high demand for qualified information-technology staff, and it was the occasionally feverish searches of its clients for personnel that gave Andersen the idea of constructing a human derivatives contract. For IT contractors, futures help assure a greater continuity of employment as individual projects wind down, Moon said. More than a dozen companies in Australia and New Zealand have bought the futures, most for between five and 20 workers.
"During the late 1980s, early 1990s, during the recession, there was a labor surplus of IT personnel, but right now there just aren't enough people for the jobs we have," Moon says. "While the industry is cyclical, right now it's a high-demand, low-supply environment."
And in a high-demand environment, clients pay to transfer unwanted risk, Moon adds. So futures make more sense for IT workers than for plentiful labor pools like, say, actors.
An added benefit for IT companies has been that, by acquiring futures contracts, they've started thinking more deeply about their own personnel resource needs, something previously handled on a seat-of-the-pants basis, Moon said.
"Today's workforce is getting much more diverse, not just in terms of gender, but in terms of part-timers, full-timers, and contract workers," Moon said. "Increasingly, human-resources departments are having to take a more integrated approach."
In fact, many companies have come to Andersen to negotiate a futures contract, only to end up hiring personnel right away. "Just talking about the product and the availability of people has tended to bring forward the sale," she said. "Clients are very focused, and if they find the people they want, often they'll hire them straightaway."
At present, Andersen Contracting doesn't do anything else apart from providing personnel to the IT industry in Australia and New Zealand, has no plans to take the idea overseas or expand it. In fact, they pulled away from incorporating all the features of a real futures market.
"For instance, we decided against having a secondary market where people could be sold to other companies," she said. "That really makes people a commodity."
