Information Management & Computer Security

IT skill retention
Valerie Mosley Margaret Hurley
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Valerie Mosley Margaret Hurley, (1999),"IT skill retention", Information Management & Computer Security, Vol. 7 Iss 3 pp.
129 - 132
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IT skill retention
Valerie Mosley
Principal, Armstead Consulting International, Melbourne, Australia
Margaret Hurley
Partner, Daruma Management Services, Toronto, Canada
Why skill retention is an issue
IT is crucial to business
There are very few businesses now for which
information technology is not an integral
element. To operate without a substantial
and reliable IT capability is simply not an
option. Investigations of US corporations
support the hypothesis that businesses can-
not achieve high levels of success without at
least ``passable'' IT support (Brockway and
Hurley, 1998). Any forward-looking business
with a desire to stay competitive must avail
itself of highly competent and reliable if not
leading-edge and innovative IT.
Organizations wishing to remain competi-
tive in a cut-throat competitive environment
must use all of the tools available to them. IT
is high on the list, but simply using the
capability is not enough. It must be employed
to its fullest extent in many cases. Having
invested heavily in technology, businesses
have to push the technology and its users
to do virtually everything of which it (and
they) are capable. A mediocre IT capability is
not compatible with highly successful busi-
ness performance.
Skilled IT workers have a lot of options
Pushing technology to its limits is no mean
feat because they keep expanding. It is
increasingly difficult to keep knowledge of
technology apace with its capabilities due to
the pace of change. IT workers have to
constantly upgrade their skills and retrain if
they are to be able to push the newest
technologies to their limits. Anyone who is
proficient in the latest technologies, pro-
gramming languages, development techni-
ques and tools will be highly marketable and
extremely valuable.
The precise number and category of IT
skills shortages are a subject of some debate
in certain circles, but the magnitude is clear.
The number of IT vacancies in Australia is
growing at a rate of over 100 per cent per year
(DoEETYA, 1998). Canadian vacancies are
conservatively estimated at 30,000-50,000[1],
and US vacancies are estimated at well over
200,000[2].
Skilled IT workers have many options. The
fact that they are in high demand and in
short supply means that skilled program-
mers can practically name their price.
Costs of turnover are high
In job markets, strong demand means high
turnover. The temptation to move on to
greener pastures will leave many IT depart-
ments and service providers with positions to
fill. The cost of replacing a lost worker is
about three times the salary of the indivi-
dual, in general terms, and even more for
many IT roles. Opportunity costs, training of
new staff, recruitment costs and the costs of
retreading old ground with existing staff are
all elements. The lost time is also a huge loss,
outside of the tangible training and other
costs. In spite of these well-known general-
ities, most organizations do not have any
realistic picture of the cost of turnover in
their own organizations.
In most instances, it is retention, not
obtaining, IT skills that is the more challen-
ging. A recent senior executive survey put
attracting and keeping key employees at the
top of the list of concerns of CEOs[3].
Marketing and sales roles were described as
the most difficult to fill, with IT positions
cited as the most difficult to retain.
What we know about IT
professionals and skill retention
If they have said they're thinking of going,
it's too late
There are many known predictors of the
probability that a worker will leave a job. Of
these, the single greatest predictor is having
articulated a desire to leave. If a worker has
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[ 129]
Information Management &
Computer Security
7/3 [1999] 129132
# MCB University Press
[ISSN 0968-5227]
Keywords
Information technology strategy,
Retention, Skilled workers
Abstract
There are very few businesses now
for which information technology
is not an integral element. Any
forward-looking business with a
desire to stay competitive must
avail itself of highly competent
and reliable IT. Skilled IT workers
have many options because they
are in high demand and short
supply. This article discusses how
to retain IT skills in a challenging
environment.
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arrived at the point of actually saying they're
thinking of working elsewhere, you've al-
ready lost them. Responding to a stated
desire to leave is a bit like closing the stable
door after the horse is gone; you need to
intervene earlier.
Other predictors, particularly for IT pro-
fessionals, include the opportunity to work
with innovative people, to use the latest
technology and to learn new skills. A recent
US study (Hay Group, 1998) quantifies the
effect of learning opportunities on the inten-
tion of employees to remain on the job
(Figure 1).
Money is a hygiene factor
The in-demand IT professional will invari-
ably be offered big bucks to make a move to
another employer. For those in the developed
world (the profile is different in the develop-
ing world), money ceases to be a significant
motivator fairly quickly. There is a threshold
(and it's fairly high in many cases) below
which an employer's compensation offer
cannot go. However, offering a doubling of a
comfortable salary will not come close to
increasing the likelihood that a reluctant
employee will stick around. Like hygiene, it
is missed when it's not there, but it is not a
primary motivator.
Affiliation is a strong motivator
One significant motivator for IT profes-
sionals is the opportunity to associate with
the best of their breed. The best and brightest
in the field tend to attract each other. The
prospect of working with innovative people
on challenging projects is as much a moti-
vator as any for IT professionals. They thrive
in an environment that allows for constant
skill upgrading, retraining, learning and
experimentation.
There is an ancillary element of following
the best and brightest workers around, an
intangible ``coolness'' factor that cannot be
underestimated. Everybody wants to feel that
they are making a contribution. For IT
professionals, that often equates to expand-
ing the technical body of knowledge by doing
things in a new and innovative way. That is
``cool''. Access to the latest technology, train-
ing in the latest techniques, outputs that are
meaningful, a peer group that is both com-
petent and respected these are all elements
that go a long way towards attracting and
retaining the best IT minds; and it can't be
faked. A stodgy, monolithic company with a
few glitzy titles and the same old IT shop will
very soon be discovered for what it is.
Pretending to have the coolness factor won't
work.
In order to do some early intervention
against employee (and skill) loss, knowledge
of their motivators is necessary. It is im-
portant to understand that for the vast
majority of IT professionals, loyalty is to the
IT profession, not to their particular em-
ployers. You will rarely hear an IT developer
or a project manager say they ``work for a
bank'' (even though they may work on
Figure 1
Effect of learning opportunities on the intention of employees to remain on the job
[ 130]
Valerie Mosley and
Margaret Hurley
IT skill retention
Information Management &
Computer Security
7/3 [1999] 129132
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financial systems for a large bank). They will
say either that they are a programmer or that
they work in computers.
Identity, and therefore motivation, comes
from that professional association. This
strong affiliation will give an edge to firms
where the IT function has a considerable
reputation. In some instances, it will give the
edge to IT service providers (where the core
business is IT); in others the advantage will
be with IT groups in innovative and IT-
dependent organisations.
Desperate actions
IT shops are poaching
With skills so difficult to come by, the tactics
employed in obtaining scarce and despe-
rately-needed IT skills are becoming extreme.
Among the most common is stealing pre-
trained employees from competitors by of-
fering either better pay or a more attractive
working environment. This can be a major
disadvantage for those IT shops that provide
a lot of training. It becomes a strategic
option, to train or to poach.
Governments are doubling and tripling the
number of IT-worker visas
In North America, the shortage of qualified
IT professionals is so acute that federal
governments have intervened and allowed
qualified applicants from any country to
enter work (as non-immigrants) in North
America for three to six years without
requirement of a specific job offer. This is in
addition to all other immigration allowances.
The US H-1B visa programme is planning to
add 190,000 such visas over the next five
years (above the more than 85,000 already
admitted). Citizenship and Immigration Ca-
nada is expecting demand for such workers
to be in the order of 20,000 over the next two
years.
Counter-offers are becoming exorbitant
and essential
In a fair number of instances, workers are
taking jobs with competitors because they
are simply too good to pass up. Particularly
for younger workers with lower salaries, the
differences in compensation can be substan-
tial. In spite of the previous indication that a
stated intention to leave was as good as an
assurance, it may well be worth the effort to
make an equally exorbitant counter-offer. In
many instances, the workers don't particu-
larly want to leave the environment they
would stay with specific modifications to
their compensation or conditions. It may be
late, but better late than never. The cost of
replacement is too high to simply give up
without a fight.
Skill brokers are capitalizing on overseas
opportunities
In addition to immigration, skills are being
shipped abroad. There are now emerging
organizations that will broker IT skills,
particularly with developing world sources
such as India, Israel, Ireland or Malaysia.
These brokers typically receive between
US$1,500 and US$5,000 per person for finding
the right IT skills for a US or European-based
business. There is also a brisk trade in skill
futures. If you know that a large project will
need a certain type of skill in eight months
and don't want to take the risk of not finding
them at the time you need them, there are
organizations prepared to do so, for a price.
You pay a premium now for specific skills
when you need them.
Along with skill brokers, in the developed
world, some of the top programmers actually
have agents (just like Hollywood stars). This
indicates the level of desperation and the
highly negotiable nature of compensation
and conditions at the top end of the skill
spectrum.
Flowers and chocolates
In addition to all of these approaches, there
are many other less scientific, but often as
effective, approaches to keeping people hap-
py with their work environment and moti-
vating them to stay. Simple tokens of
appreciation can go very far. Accommodat-
ing lifestyle preferences (from flexible hours
to teleworking or bringing the dog to the
office) and acknowledging hardships of travel
or overtime (from providing child care to
taking care of small domestic chores) also
make remarkable differences to people and
can mean the difference between staying and
going. Organizations are giving human re-
sources departments extreme flexibility in
negotiating benefits packages for prima don-
na IT professionals they wish to retain.
How to combat it
Risking oversimplification, there is a basic
set of rules that can be followed to ensure the
retention of IT skills in any organization. The
checklist is outlined below:
.
Catch the problem before the point of no
return.
It is far more expensive to obtain and
train than to retain. Pay attention to the
factors that will lead people to the door.
.
Recognize what you can and can't be
going outside could be a better option.
[ 131]
Valerie Mosley and
Margaret Hurley
IT skill retention
Information Management &
Computer Security
7/3 [1999] 129132
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It is not unprecedented to turn a tradi-
tional IT shop into a ``cool'' environment
(Willis, 1998) but it is certainly an
exception. It is important to recognise
whether this element is a limitation and if
so, to realistically consider the options.
.
``Spending your way out'' is a short-term
solution.
For the most part, salary increases will
have a short-term effect and it's a strategy
that is very easy for competitors to
imitate. Compensation can't be ignored,
but a focus on the work environment
would yield a better return.
.
Customize the work environment and in-
centives.
No set of incentives will work for all
employees. Understand the ones that will
work best for the type of people and skills
that are most difficult to retain. Technical
specialists, in general, respond best to
short-term monetary incentives, while
business technologists and consultants
prefer rewards that boost status, career or
long-term financial gain (Scheier, 1997).
.
Dedicated IT HR staff.
The needs of IT professionals and the
difficulty in retaining their skills require
non-standard treatment. This usually
means departing from the standard hu-
man resource practices of an organiza-
tion. Instituting an HR capability that is
specifically focused on the special situa-
tion of IT staffing requirements will sig-
nificantly ease the crisis.
When looking to attract the best and bright-
est employees, sell them on your company,
the technological environment and their
potential peer group to boost your chances of
retaining their skills over the long term.
Notes
1 Software Human Resources Council, Ottawa.
2 Information Technology Association of
America.
3 William M. Mercer/Angus Reid poll, Toronto,
1999.
References
Brockway, D.W. and Hurley, M. (1998), ``Achiev-
ing IT success'', Information Management and
Computer Security, Vol. 6 No. 5.
DEETYA, 1998 Skilled Vacancy Survey, Depart-
ment of Employment, Education, Training
and Youth Affairs, Australia.
Hay Group (1998), ``Competing for talent: creating
a work climate to attract, motivate and retain
high-performing employees'', 1998-99 Hay
Employee Attitudes Survey.
Scheier, R.L. (1997), ``Different strokes for differ-
ent folks'', Computerworld I, 8 September.
Willis, A. (1998), ``Can TD Bank become cool?'',
Globe and Mail, 7 July.
[ 132]
Valerie Mosley and
Margaret Hurley
IT skill retention
Information Management &
Computer Security
7/3 [1999] 129132
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