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Sunday, 05 August 2012 22:11

GM’s IT hiring blitz doesn’t worry local tech firms with SE Michigan presence

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DETROIT — When General Motors announced in July that it planned to create big new IT development centers in Warren and downtown Detroit, Pete Brand, co-founder of Mindscape at Hanon McKendry, said it gave him a little pause. Brand in May leased 1,100 square feet in Paradise Valley — formerly the Harmonie Park area of downtown Detroit.

GM's decision to "in-source" IT means a huge IT hiring binge for GM — and job losses for the outsourced IT companies that now provide most of GM's IT work. How many programmers and other technology specialists GM will hire, however, has yet to be announced.

But when asked if GM's hiring binge could hurt Mindscape's chances of finding the best IT talent in early 2013, when the company says it plans to begin recruiting talent, Brand says he's not that concerned.

"Although we do application development, our primary focus is programming as it relates to the marketing function," Brand said. "We're less an IT shop and a little more marketing. We'll be looking for more creative and digital marketing folks."

Carl Erickson, co-founder of Atomic Object in Grand Rapids, also is branching out to downtown Detroit, opening 2,700 square feet of space just a building away from Mindscape. Atomic Object's bread and better is custom application development, pitting the company against GM for the same types of tech talent. But Erickson said he's not that concerned with GM's in-sourcing plans, either.

"This sort of thing is episodic," he said. "Companies switch their hiring and contracting strategy back and forth over time. With a hiring strategy, GM will be competing directly with every other company that wants to hire," he said. "It's a very competitive market right now. They'll need to be — or become — a very attractive place to work to succeed in this competition."

As a result, Erickson said he sees little impact on Atomic's expansion plans.

"We're a project company, not a staffing company," he said. "Our expertise in product development fits into a niche that isn't served by staffing firms, and provides value to companies large and small, even those with their own technology staff."

Another Grand Rapids IT company looking for space in downtown Detroit is Open Systems Technologies. OST also recently opened an office in Ann Arbor.

Beth DeWilde, principal of Paragon Recruiting, a Holland company that specializes in contract IT recruiting, said GM's plans to hire IT professionals doesn't mean the automaker will succeed in finding them, or taking them away from the West Michigan companies adding branch offices in Detroit.

"Everybody is a little different when it comes to companies they want to work for," DeWilde said. "Carl has a unique business model and can offer something different from GM. GM is the 'big old boys' kind of company that is more of a traditional employer."

She said Mindscape, OST, and Atomic Object are all entrepreneurial organizations that can attract people who want to work at companies like these where they can perform a variety of jobs.

"At GM, you probably will be pigeon-holed and only work on this little part of (a larger project)," she said. "That's why the West Michigan companies setting up shop in Detroit might be more appealing for technology professionals."

But the president of an international IT contract recruiting company based in Detroit said there is ample talent interested in working in Southeast Michigan.

"We haven't had a challenge finding the resources we need and building out our development center here," said Cynthia Pasky, CEO of Strategic Staffing Solutions. "At least for the moment, we have the right answers when we're out recruiting."

She predicts somewhere along the line, many of the GM consultants will be converted to employees, and others will be released. Pasky said traditionally when a company changes from out-sourcing to in-sourcing jobs, they need fewer resources than in the past, meaning more skilled tech professionals will be on the job market.

"S3 will want to talk to them to see how they fit," Pasky said. "From a bigger picture standpoint, all this recruiting in Detroit sends a message that Detroit is the place to come if you want a job in IT, if you want to live in Detroit, which increasingly is becoming a trendy place to work."

The trendy atmosphere is particularly important to IT talent 40 years old and younger, she said. Many of these people are single, or married without children. They want to live in exciting, vibrant cities where they can take advantage of the entertainment and arts scenes.

"The younger generation will take the jobs downtown so they can move into an urban center," Pasky said. "I've lived in Detroit since 1986 and (have) become a big supporter of downtown. I've been waiting for this moment for a long time."

Mike Brennan is senior technology writer at MiBiz. His day job is editor and publisher of

Read 3377 times Last modified on Sunday, 05 August 2012 22:27

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