Maintaining a high-quality workforce with low turnover is especially important to IT organizations. When turnover increases, the quality of IT work dramatically decreases.
I was struck by the importance of retention while looking at the business model of the large, India-based IS services companies. A $2 billion dollar operation requires 50,000 people under the typical offshore model. It will take 100,000 people to grow to $4 billion dollars in revenue, assuming no improvements in productivity. Imagine trying to run one of these companies with a 20% or higher attrition rate -- the low side of the current average attrition for Indian offshore companies.
On-boarding. First impressions count, especially to compulsive IT folks. They focus on details. I see many new recruits sitting in cubicles, waiting for their first assignments. IT people worry about being on a bench, waiting for work. Get people engaged and working as soon as possible. Those first few months shape the relationship people will have with your company.
Spend some time introducing new people to your company, the work that it does and the values it practices. Be grateful to them for having selected your company, rather than telling them you bestowed a favor by hiring them.
Measuring performance. IT people like to measure stuff concretely and want to know where they stand. Your processes and systems must judge the quality of their work and be clear about how people are performing against standards. But too many times, mediocrity becomes the standard in an IT organization. It can feel hard enough just to get the job done. Why push excellence?
Set your quality standards higher and measure people's performance against those high standards. People are more likely to stay in a high-performing organization, rather than being lured away by higher pay. If they are inclined to go somewhere for just higher pay, let them go.
Recognition. IT people want to be part of a meritocracy and want to be rewarded for good performance. I have sat in many compensation and bonus reviews where people could not be paid what they were really worth. The economics of the business didn't allow for it.
But you will be surprised by how much loyalty you can buy with genuine recognition. Just as people like to hang the biggest fish on the wall, they will proudly hang an expression of your thanks for a job well done.
Developing careers. IT organizations spend lots of time building a structure through which people can grow and move. Let me give you a contrarian point of view: Throw away the structure of your IT organization and go flat.
Career development for IT professionals should be experienced as a progression of increasingly challenging and complex work, not as a progression through a hierarchy. A midsized IT organization does not have enough management jobs for people to move into. So keep your organization flat, but pay and recognize people as well as you can for the value they deliver.
Don't get caught up in a system of job grades and levels. But do establish a set of roles that describe the difficulty and complexity of the work. Then move people though those roles.
Want to keep people? Then be welcoming, aim for excellence, build a meritocracy, and go flat. IT people will love it.
James Champy is chairman of Perot Systems Corp.'s consulting practice and head of strategy for the company. He is also the author of the best-selling books Reengineering the Corporation, Reengineering Management, The Arc of Ambition and X-Engineering the Corporation.