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CIOs find respect (and money) retain top workers

As the demand for highly skilled tech workers intensifies, CIOs might be tempted to try creative tactics to keep them. But experts say a little respect (and more money) goes a long way.

There's a very good chance you're about to lose one of your best employees.

As the demand shifts in favor of high-skilled tech workers, many of them are going where the grass is greener.

If they walk out the door, they're walking out with a lot of knowledge.
Melissa Maffettone
branch managerRobert Half
"If they walk out the door, they're walking out with a lot of knowledge," said Melissa Maffettone, a branch manager for Menlo Park, Calif.-based Robert Half International Inc., an IT staffing and consulting firm. "There's a lot at stake."

The IT labor pool is shrinking and shifting in the candidate's favor, according to Maffettone. Her firm is seeing workers, who a few years ago may have been afraid to leave jobs, start to look for better opportunities.

"Some are not actively looking, but if they're called with a better offer, they're unexpectedly walking out the door."

Workers with good communication skills and business savvy, in addition to the highly sought-after tech skills, are the ones receiving multiple offers, she said.

That's why CIOs are taking steps to persuade valued staff to stay -- and it doesn't involve a ball and chain. In fact, in a recent poll of 1,400 CIOs by Robert Half, 63% said they're providing such things as professional development opportunities to retain their best people. Nearly 50% offer flexible schedules and increase base compensation as a way to keep employees.

Show them the money

While training programs and other creative incentives are forward-thinking, experts say it's generally the money -- and a little respect -- that gets and keeps good employees.

James Woolwine, CIO at Majestic Insurance Co., an $82 million firm based in San Francisco, says a happy staff is a productive staff -- and he does what it takes to make his IT department a great place to work, such as offering a flexible work schedule.

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Woolwine said flexible hours and the ability to work from home are tough for a conservative company to accept. As one of the few departments in his company to offer such flexibility, he often has to justify it to upper management.

But, he argues, he has proven that if you offer flexibility and a decent place to work, you'll be able to get the more desirable workers and keep the good ones you already have.

"Because those kinds of jobs are not that easy to find," he said.

Work-life balance issues are nothing new -- in terms of incentives. Its effectiveness in retaining top workers has been proven time and time again. But Maffettone said she's still surprised by the number of businesses that still just don't get it.

"We still see some companies not taking it seriously," she said. As a result, CIOs respond as though they've been ambushed when their top worker resigns.

According to a recent AFCOM survey, there will be a 45% drop in the talent pool of senior technical workers (often the most highly skilled) by 2015. Even worse, 90% of companies surveyed said they have no strategy to deal with the shortage. And with IT managers reporting that it takes more than three months to fill a skilled position, many of them don't expect it to get any better -- at least not within the next five years. In fact, 62% currently have unfilled positions in their data centers.

Experts say there are a number of reason for the IT brain drain -- fewer suitable jobs, more jobs being shipped offshore, lower salaries and fewer higher-educational institutions offering computer science -- particularly in the areas of mainframes. Fewer jobs in the data center means fewer young people will be looking to replace those older workers. The lack of applicants is said to be hurting at least one in six data centers, according to the AFCOM report.

Salary savvy

As a result, this shortage of highly skilled workers is creating additional problems for CIOs in terms of what they pay their employees. What they're finding is that the rules have changed -- and not necessarily in their favor. CIOs are also finding themselves having to make some tough choices regarding salaries -- that is, who gets paid what.

"I think that most companies have taken a one-size-fits-all approach, and this just won't work moving forward," said Craig Symons, principal analyst at Cambridge, Mass.-based Forrester Research Inc.

According to a new report from Forrester, employees in IT positions threatened by outsourcing and automation are experiencing salary stagnation, while in-demand positions such as business analysts, security professionals, architects and software engineers are seeing double-digit salary growth.

He said CIOs who ignore these new job market dynamics will have trouble filling and keeping positions, staffing projects and executing strategies. "With IT at the core of most business processes, this will ultimately put them at a competitive disadvantage," he said.

Symons recommends that CIOs look at each position in their organizations and assess the market demand for the associated skills. The IT department can work with the human resources department to establish salary metrics according to those demands. Astute companies, he said, will benefit from having HR staff members who are specialized in hiring IT employees.

John A. Kemp, vice president of information services at Lion Apparel Inc. in Dayton, Ohio, said his company recently implemented an ERP solution from Oracle. Instead of hiring new staff to help manage the Oracle system, Kemp decided to retrain some of his programming people.

Kemp said training existing staff members to serve in positions that are in greater demand on the market forced him to increase their salaries, but he said the strategy was worthwhile. He wanted to retain the business knowledge of his existing employees. Integrating new people into his staff may have been more costly in the long run, he said.

As some IT employees recognize that some of their co-workers are experiencing better salary growth, the possibility of workplace friction could emerge. "If not managed properly it could create issues," Symons said. "This is why good managers are worth their weight in gold and unfortunately underappreciated in many companies."

Let us know what you think about the story; e-mail: Kate Evans-Correia, News Editor; or Shamus McGillicuddy, News Writer

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