Recession in the IT world is having a dramatic effect on human resources. Job losses have been widespread and where senior managers have seen their posts go in cost-cutting drives, those under them have been offered the opportunity to step into their shoes. Yet there is still a shortage of high-level IT skills and experience in the networking, Web design and Internet security areas - and where there are shortages, there is competition for staff. So how do you hang on to your talent?
The good old-fashioned way is the bonus, a method which is still popular in the IT world. Like gamblers in a casino, employers are offering bonuses to hang on to talented staff, welcome employees to new jobs and tempt gifted workers away from other employers. "For a salary of between £60k and £100k, you are seeing a signing-on bonus of about £15k to £20k and that is tempting some people out," says Paul Smith, managing director of Technology Practice for Harvey Nash.
This is particularly true in sectors which have been very badly affected by job losses or where staff have taken salary cuts to save their jobs. A tempting offer of a raise from a new employer, plus a bonus, is doing the trick. "There are certainly a lot of people talking, a lot of people considering and some who are moving," he adds. Employers which are anxious to hang on to their staff are also offering share options, which are still worth having even though shares are on the floor at the moment.
These two countervailing forces - the recession causing job losses and the skills shortage creating competition for staff - mean employers want to know the quality of the worker they are employing. "People are being very careful about who they take on," says Smith. "They are treble-checking references and performance reports and setting the bar much higher."
He points to the fact that in 2000 and 2001 there weren't enough people to go round, so two things happened: the quality level was lower than desired because employers had to get people on board to reach targets, and candidates accepted jobs that were beyond their capabilities. As a result, he claims "there are a lot of candidates who have been in jobs and lost them or have jobs in which they may be out of their depth". Being in a job that is too much for you may be a reason for moving on, but it can also act as a deterrent to moving. No one wants to admit they cannot do their job.
But active staff retention for Smith means showing employees a strong sense of direction. Research at Harvey Nash has taught him that the reason most people stay with a company is not finance, but the people they work with. "I think employers need to restate the objectives of a company to give people real direction," he says. "The ball is in the court of local managers and team leaders. What companies have to do is make sure teams stay together and that managers are motivating staff."
A slice of the pie
Providing an entrepreneurial environment that motivates staff to drive their own jobs forward is a major talent retention device at Sun Microsystems. "People can make their jobs as interesting as they want to and don't have to get stuck in a rut," says a Sun spokesman. The company also has employee share plans and very generous stock options, which give people a stake in the ownership of the company.
Small to medium-sized private businesses which can't rely on the current stock market to share the value of the company among the employees have to be more inventive. "What we do in particular is offer career development," says Maria Bristol, human resources director for Strategix, a company
which supplies distribution systems to businesses that buy and sell products. "This means promotion and training, flexible working and sabbaticals. That all ties in with rewards. We look at salaries, bonuses and mentoring, so skills can be passed down to other people."
Strategix is also very keen on communication within the company - making sure management understands who the talented ones are and letting them know they are appreciated. "People are too slow in coming forward until it is too late. I would encourage people to come forward so we can be proactive rather than reactive," she says. One member of staff who worked in its technical office in London, situated in an area which is surrounded by IT people, wanted a more customer-facing role than development could offer and moved over to professional services within Strategix to achieve that. "He did that for himself more than anything else," she adds.
Employees who have been headhunted in Strategix might just want the management to know about it because they are chuffed, rather than because they actually want to make a move. "I'm fairly relaxed," Bristol says. "I would say something like 'I don't want you doing anything like that' and they will say they have invested far too much time in the company to move."
A favourite device of Bristol's is a duvet day. She thinks a valuable member of staff who hasn't taken any days off sick should be rewarded by the occasional free day that doesn't come out of their holiday allowance. "Why not have a system where you can reward them with a duvet day?" she suggests. Senior management are thinking about it.
Keep them keen
Being proactive to the needs of the staff is something Microsoft is passionate about. It puts a lot of effort into creating the right environment for staff. It has a manager in place to guide staff so they feel engaged within the company to do their best work, rather than spending time thinking about working elsewhere.
Microsoft has put a lot of thought into the surroundings of its Thames Valley site in the South of England. It has onsite amenities for the staff, such as dry cleaning, a car wash, film processing and a Waitrose supermarket so employees can order food over the Internet and pick it up before they go home. This gives them a chance to relax when they get out of work.
There is also a well-being facility on site that provides a range of services, including vaccinations for people going abroad and a chance for staff to get their moles checked out if they are worried about cancer. A masseuse is available if they want to take a break and there is also a gym, which is useful for pounding out the stress. If a manager wants to take a team for an evening out so they can enjoy themselves and catch up on communication, there is money set aside for this purpose.
"We care about our employees' intellectual well-being too," says human resources manager Gill Crowther. "They have access to development training and leadership training." The company also ensures all staff have access to internal communications media so all employees can keep up-to-date with what is going on.
This is paying off for Microsoft. In one of the many surveys it carries out to check on the performance of its workforce, it found staff turnover was lower than four per cent. "We conduct an annual poll of the 44,000 people we employ around the globe to find out what they think - and we really listen," Crowther says. "It asks questions such as 'what do you think of your manager?' and 'what do you think of your job?' We check how people are feeling."
Aside from the human resources angle, Microsoft also offers hard cash. Famous for its share option scheme - which made even the secretaries hugely wealthy when they cashed in their options - it also has an income bonus system for which everyone qualifies, as well as a bonus scheme called the '1,600 people goldmine' where 1,600 people are targeted for bonuses.
And it is still actively seeking new staff. "We are still growing and still recruiting," says Crowther. "At the moment, I think it is even more important to continue to think through the involvement of people. We want them to feel engaged."
Sowing a seed
Yet growing talented staff is important. Employees who have been well-trained by a company are likely to be the most loyal. In a question and answer session prepared for the Department of Education and Skills, Cisco Systems explains how it has been involved in the provision of an e-commerce foundation degree, which is run by the Open University.
It has an eye on increasing the productivity of new recruits much earlier in their employment life, which it considers a major benefit. Cisco contributes four networking modules for the course. The main benefit it sees in being involved with this initiative is the ability for participants to gain a qualification that has immediate technological relevance and for that qualification to be respected in the market.
So there is a wide range of benefits available for the retention of talented staff, from bonuses and pleasant working environments to share options and training - and employers need to provide all these benefits to keep gifted employees if they are to get through one of the toughest recessions in the IT world.