Saving on Oracle staffing costs in an uncertain economic climate

Find out how to downsize an Oracle shop -- or learn how your employers might approach this, so you can avoid being laid off. Learn the three common approaches from Donald Burleson.

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In the previous installment, we explored ways the Oracle manager could cut his budget by trimming hardware and software costs,. But the sad reality is that the lion's share of a typical budget is for highly talented and well-compensated Oracle professionals, those indispensable folks who create and maintain the applications that allow the company to manage its information. Cutting fat from this area of the budget requires the skills...

of a surgeon because mistakes can be very costly.

Displacement of Oracle professionals

The market for Oracle professionals has been boom-or-bust. In years where demand exceeded supply (1996-1999), anyone with even the most marginal skills could secure a job in Oracle technology. In years when the economy contracted (2000-2002), the bar was raised, and only those Oracle professionals with stellar qualifications could find jobs. (Figure 1):


Figure 1: Changes in net job creation in the United States

Again, we saw Oracle job growth between 2004 through 2007, and again, demand outstripped supply and we saw desperate employers hiring marginal Oracle professionals. Today, in 2008, we find ourselves in a mode where we are forced to do more with less, and the job of the manager centers on opportunities to trim the budget without losing quality. There are three approaches to downsizing an Oracle shop:

  • Using remote support – You can replace your full-time DBA and system administrator staff with on-demand experts and terminate your full-time DBAs and system administrators.
  • Change employees to contractors – In some jurisdictions, you can terminate your W2 employees and re-hire them as remote 1099 contractors.
  • Termination – As a last resort, the Oracle manager must make tough decisions about who gets fired.

Let's take a closer look at each option.

Using remote Oracle support

The demand for remote DBA support fluctuates with the overall health of the economy. In lean times, many companies choose to have their Oracle work done on an on-demand basis, paying only for those hours that are used. The remote approach also has the side benefit of saving on employee overhead costs, which can constitute up to one-third of an on-site Oracle professional's salary.

Through my experience managing a large remote DBA Oracle support company , I've noticed that lower cost is not the primary reason organizations choose to supplement their Oracle staff with experts. Foremost, they want to have experienced experts available, an on-demand mentor and adviser who can be contacted periodically for especially tough problems.

Of course, it's less expensive to outsource your Oracle database administration because few shops have enough instances to justify supporting a good full-time DBA. DBA talent is expensive. The IOUG 2008 Oracle salary survey indicates that three out of 10 Oracle DBAs now receive six-figure incomes for their work. The largest segment, 47%, reported making base salaries of between $80,000 and $100,000.

But it's not just DBAs who are seeing their future in a remote talent pool. Oracle developers are now consolidating their services into on-demand models, and managers are now getting the same quality Oracle professionals remotely, paying only for those hours that they consume. Because the developers are not salaried, their productivity is also much easier to measure.

The largest concern about outsourcing Oracle support is losing institutional knowledge, so it's important to use a remote DBA company that has been in the business for decades and which uses non-anonymous support staff who have undergone a security and background check. For overseas companies, it's important to engage a remote DBA provider in your home country. Data security and privacy laws vary widely, and anyone foolish enough to use a foreign remote DBA service may find his data stolen, leaving no legal recourse whatsoever.

Toss the office and go virtual

This approach saves money at many levels and does not require firing your Oracle professionals, but it may not be legal in your jurisdiction. By closing your physical office and going "virtual," you can save a huge amount of office expense overhead and OSHA enforcement and employee benefits while still retaining your prized staff.

This approach also allows you to downsize your office space, because 1099 contractors must either work remotely as independent contractors, or they can come back to your office via a "temp" agency.

Because everyone works at home as an hourly contractor, you pay them only for the hours that they are actually working. The downside is that employees who require supervision may not contribute, and highly collaborating efforts such as Oracle systems development may not work out remotely because of communications issues. Also, you lose a large tax deduction for "Property Plant and Equipment" and employee benefits. The rules vary widely by jurisdiction, and you should always consult a labor attorney and CPA in your state before choosing this option.

Identifying Oracle professionals for layoffs

When faced with the reality of layoffs, most managers try to be as fair as possible, preparing an objective comparison of cost vs. performance for each employee. However, you must also consider intangible aspects such as the loss of institutional knowledge, which is especially critical for Oracle DBAs who understand the complex nuances of your systems. When evaluating Oracle professionals for a layoff, many employers consider these factors:

  • Have people distinguished themselves by graduating from competitive universities?
  • Are they committed to keeping up with the technology changes?
  • Have they been chosen to publish in Oracle journals and present at Oracle conferences?
  • Are they well liked by their peers and the end-user community?
  • Are they a good value for their salary level?
  • Are they productive, when compared with their peers?

The biggest discrepancy is found with successful, older Oracle professionals. For example, it's not uncommon to find senior Oracle professionals who have earned top raises in past years and now earn twice the salary of a professional who has just graduated from college. Because older Oracle professionals may not be as productive as they once were and may not have the stamina of the younger folks to work long evening and weekend hours, they present a tempting target for layoffs.

While age discrimination laws prevent wholesale layoff of your more expensive and less productive older workers, there are some things that can be done to justify layoffs on a case-by-case basis. Job termination laws vary widely between jurisdictions. They run the gamut from employment-at-will states, where you don't need to state a reason for firing someone, to states with strict wrongful termination laws. Remember, in some jurisdictions, a large layoff of Oracle professionals can be very costly because of required severance and unemployment pay for each employee.

In order to avoid complaints about unjust termination, some companies may justify their layoffs by claiming abuse of company resources. While this practice is considered unsavory, companies have been able to successfully fire Oracle professionals "for cause" by documenting unauthorized use of company property for such innocent acts as surfing the Web while at work. The rules vary by jurisdiction, but avoiding litigation after a layoff is a legitimate concern for the IT manager.

For complete details on firing Oracle professionals, see the book Firing Computer Professionals: The IT Manager Guide for Terminating With Cause.

What happens in 2009?

With all of this gloom and doom about the economy, the manager must remember that this is not much different from the IT bubble bursting in the year 2000 and that there is a light at the end of the tunnel. The demand for Oracle professionals with proven experience and qualifications remains strong, and the current shakeout is identical to the layoff in 2000, when companies shed Oracle professionals with marginal skill sets. In sum, the IT manager must make tough decisions about how to keep Oracle systems afloat in uncertain conditions, and while economic imperatives demand cutbacks, the savvy IT manager will be able to cut the fat from his Oracle shop with the precision of a skilled surgeon.

About the Author: Donald K. Burleson has been a full-time DBA since 1983 and is one of the most recognized names in Oracle technology. Author of more than 30 books and hundreds of articles, Burleson has written five Oracle Press books and presented at dozens of international Oracle conferences. He is currently the CTO of BC Remote DBA and has websites at http://www.remote-dba.net and http://www.dba-oracle.com.

This was first published in November 2008

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