The IT market appears to have mounted a sustained recovery, with increased IT investment and rising salaries for staff with key skills. A more buoyant jobs market is also set to increase staff turnover.
Earlier this month research company Forrester warned that UK and mainland Europe should brace itself over the next 12 months for the biggest "war of talent" for IT staff since the 1990s.
So what should IT organisations do to ensure they have the right staff at the right time? Simon Mingay, research vice-president at Gartner, said companies should plan recruitment policies 18 months in advance. A recruitment strategy should consider:
- Whether the firm finds the skills it needs in full-time, contract or outsourced staff
- Whether to hire new staff or retrain existing staff
- How to prevent its own staff leaving
- What is the most cost-effective way to hire or retain staff.
Companies have begun to rely less on IT contractors, according to experts, partly because during an economic downturn many contractors prefer safer, full-time employment or quitting IT.
"What has gone out of style are basic contractors," said Will Capelli, director of research at analyst firm Meta. "The choices are more stark: companies either use full-time staff or outsource."
Companies can limit their recruitment costs by training existing staff in new skills rather than going through the expense of recruiting from outside, said Mingay. Not only is training and development cheaper than the cost of hire, but it helps retain staff who might otherwise leave.
David Roberts, chief executive of the Corporate IT Forum, Tif, whose members include many FTSE 500 companies, advised IT directors to consider recruiting staff from outside the IT department with marketing and finance expertise and giving them training if necessary.
If you need to recruit from outside the company, use your own staff as headhunters first. "A referrals system is an incredibly good and cheap way of hiring," said Mingay. "Offer staff a sweetener - a few hundred to a few thousand pounds."
Margaret Smith, chief executive of IT directors group CIO-Connect and former director of business information systems at insurer Legal and General, has used this approach.
"I have paid staff to recommend others," she said. "However, you have to pay them a significant enough sum and you must still go through formal selection procedures. We did have one tangle where a member of staff introduced a friend and then an agency claimed a fee [for the placement]."
The next step in a review of recruitment practices should be to update personnel records, including those of job candidates who have been interviewed previously.
"Ensure you have a way of archiving and recovering people who send on-spec CVs and those who made it to former shortlists," said Roberts. "It saves a lot of money if you can find the right people that way."
Headhunters are generally seen as being more suitable for the most senior IT jobs and those requiring international skills.
Roberts said Tif members also hold "walk-in" recruitment days backed by advertising in the local media. Recruitment fairs can also be a good way of finding experienced staff.
Companies should try to connect with universities, added Roberts. "Build relationships with colleges before students graduate, perhaps by operating work placement schemes, but have checks in place to differentiate graduates."
But beware, said Capelli, of neglecting technical for business educational qualifications. "It is better to hire graduates with a strong technical background and use the interview process to see if they are amenable to learning business skills," he said. "Joint IT/business graduates are neither fish nor fowl, and neither skill is deep enough."
Whatever the pressure to hire new recruits, resist the temptation to rush the recruitment process. "Hiring the wrong person is more expensive than putting in the time and effort to hire the right one," said Mingay.
"However, if quality is in short supply, you may have to lower the bar. In that case, ensure you have enough training, coaching and mentoring to get the new recruit up to the right level."
Whatever channel is used to recruit, yours must be a place where people want to work. Although 55% of people cite more money as one of the main reasons for changing jobs, 93% do it for fresh challenges and a more exciting role, according to Peter Clayton, chief executive of the Association of Professional Recruitment Consultants.
The reputation of an organisation as a good employer will also help recruitment. "You need to offer interesting and attractive work, have a good reputation in the IT marketplace and remember that how you treat your people is critical," said Smith.
"In a recession, you can get away with [poor treatment] - not because you are malicious, but because when you are under pressure you lose the niceties." But if you lose the niceties, you will lose the people when the market picks up, she pointed out.
Valuable staff can be motivated through bonuses, although they should be used selectively. If news of payments spreads among other IT staff, they might demand similar payments.
Ultimately, the bottom line for good skills portfolio management is the attitude of the IT director. "IT directors and their senior teams set the tone on how recruitment is done," said Mingay. "If the IT director is not laying out what kind of organisation it is, what kind of values it has and what kind of people it wants, you are recruiting in a vacuum."
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- Always have a skills portfolio management plan looking about 18 months ahead
- Develop your own staff before hiring, both from within IT and business departments
- Get your own staff to headhunt new recruits and pay a finder's fee
- Search through retained files and CVs from previous applicants
- When using agencies, complain inadequate performance and drop poor agencies
- Web advertising can bring in too many applicants - filter them with "killer questions"
- Do not skimp on the selection process. Hiring the wrong person is worse than taking longer to hire. If talent is scarce, be prepared to "beef up" weaker candidates with training and mentoring
- Use walk-in days and recruitment fairs
- Line up good future graduates by offering college work placements
- Ensure you department enjoys a reputation as a good place to work, that it treats staff well, pays them appropriately and provides challenging work. As IT director it is your responsibility to set the right tone and culture.
This was first published in March 2005