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The term "perfect storm" usually applies to weather, describing meteorological conditions that come together to create an extremely powerful event. But a series of workforce trends currently forming may produce a particularly challenging hiring environment in the near future—and a perfect storm for CIOs.
Prime among these developments is the impending retirement of millions of highly experienced baby boomers from the workforce over the next several years. According to the U.S. Bureau of Labor Statistics, there will be nearly 1 million more IT jobs in 2014 than exist today. That figure jumps to more than 1.3 million when retirements are factored in.
Meanwhile, fewer college students are choosing to major in computer science, engineering and mathematics to refill the ranks. UCLA's Higher Education Research Institute reported that the number of incoming freshmen who planned to major in computer science fell by 70 percent between 2000 and 2005. And continued business expansion, particularly within IT departments, is further causing the demand for skilled workers to outstrip the supply of candidates.
Given these circumstances, one would expect employee retention to be at the top of every executive's list of concerns. But it isn't. In fact, the Employment Dynamics and Growth Expectation (EDGE) Report, which Robert Half issued with job-search site CareerBuilder.com, found that just 30 percent of hiring managers have instituted programs aimed at preventing employee turnover. How about you? Have you taken steps yet?
Four in five hiring managers polled for the EDGE Report said it is equally or more difficult to recruit new candidates compared to 12 months ago. And the environment will only become more challenging. Less than 20 percent of survey respondents see signs of improvement in the coming year. In addition, the EDGE Report showed that 44 percent of workers are likely to leave their employers for new positions in the next three years. Some of these individuals may be your own workers.
Financial Motivation Plays a Part
Salary is the first place executives should look when evaluating the strength of their current retention strategies. Pay plays a large role in employee satisfaction, and workers who feel undervalued are likely to look for greener pastures. As a result, it's imperative you keep abreast of current compensation trends.
According to the Robert Half Technology 2008 Salary Guide, starting salaries for all IT positions are expected to rise an average of 5.3 percent in 2008, versus 2007. The projected increase is even higher—up to 7 percent—for in-demand positions such as lead applications developer, messaging administrator and data modeler. If you haven't examined your firm's compensation structure lately, you could be underpaying key people, virtually opening the door for them to leave.
In addition to base salary, spot bonuses and financial awards based on performance also can serve as powerful retention tools. These initiatives help ensure your workers feel recognized and appreciated for their efforts, thus increasing their loyalty to your firm and decreasing their chances of exploring employment opportunities with a competitor.
Money Isn't Everything
Money, however, is not the sole factor that can encourage your staff to stay on board. Initiatives that enhance the work environment also are key. In a Robert Half Technology survey of 1,400 CIOs, "providing training or professional development" and "offering flexible schedules" ranked as the top steps IT executives are taking to reduce turnover.
IT workers are particularly appreciative of professional development opportunities because the rapid evolution of technology mandates that they keep their skills sharp in order to position themselves for promotions and advancement opportunities. In addition, offering employees options for building their skills shows them that your company is investing in their careers and helping them to gradually assume greater responsibility.
Providing schedule flexibility, which recognizes your employees' competing commitments outside the workplace, can also go a long way toward enhancing morale and promoting staff stability.
So can striving to ensure that your top performers have interesting and challenging projects to complete. In IT, the opportunity to work with cutting-edge technology or be involved in the development of a new product can be a huge reward in itself.
Keep in mind that efforts to ensure employees remain engaged in their work can extend beyond the traditional realm of IT; members of your department may welcome the chance to join cross-departmental teams that focus on company-wide initiatives, such as improving employee communication or exploring the best way to reach new customer groups.
Many effective retention programs can come at little or no cost to your firm. For example, additional vacation time, telecommuting options and even establishing a corporate philanthropy program, are all cost-effective ways to build employee loyalty. As the economy continues to grow, and the pool of skilled IT talent shrinks, retention will become an ever more important part of your IT strategy. Remember that every worker you lose is potentially one more good employee your competition gains. Take the appropriate precautions now before the challenging employment climate develops storm-like qualities.
Reprinted by permission from Robert Half Technology, a leading provider of IT professionals on a project and full-time basis. Robert Half Technology has more than 100 locations in North America, South America, Asia and Europe, and offers online job search services at http://www.rht.com.
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