Recession has meant a slowdown in the IT jobs market, but the issue of staff retention is still very much alive. High recruitment costs mean that when times are hard, it's more important than ever to hang on to skilled staff. To recruit someone on a salary of £40,000 can cost upwards of £7,000 - and that's before you even start on the costs of induction and training.
We all know that high staff turnover is to be avoided, but what's the best way to motivate your staff to stay? Throwing higher salaries at the problem might seem the obvious solution, but money alone is not necessarily the best motivator. Personnel assessment specialist Profiles International recently carried out a survey on why people leave their jobs and found only 15% of participants mentioned inadequate salary and benefits as a reason for leaving their jobs.
The highest proportion - 30% - were unhappy with management and the way they were managed; 25% felt they got no recognition for good work; 20% complained of limited opportunities for advancement and 5% were bored with the job.
What motivates you?
Occupational psychologists have long argued that factors such as a need for recognition, self-esteem, self-actualisation and social interaction are key to understanding what motivates people to work. Professor Peter Warr of the Institute of Work Psychology at University of Sheffield suggests thinking of the factors that make for good job motivation as being rather like vitamins. Some, he says, are rather like vitamins C and E: necessary up to certain levels, after which they cease to have any effect. These would include security, recognition and money.
The reason why money only works up to a point, occupational psychologists say, is that people soon get used to their new salary level and it loses its motivational power. Money is most effective when given in visible lumps, as in a special bonus, or when given as a "contingent reward" - in other words, if staff can see a direct connection between their performance and financial incentives.
Take your vitamins
Other motivators, Professor Warr argues, are more like vitamins A and D - they are good for you up to a certain point, beyond which they actually become harmful. These would include responsibility, challenge, job variety, interpersonal contact and the opportunity to use your skills. All of these are great in moderation but at high levels can turn into stress: too much responsibility, too much change and too many different people.
European network operator Interoute takes both types of motivational factors into account in its HR policy. But Julia Marsan, its executive vice-president of human resources, believes that education and training initiatives and a challenging work environment are more effective retention and motivation tools than salaries.
Interoute has set up an employee forum that meets regularly to discuss issues of concern to staff, giving them a chance to have some input into the company's direction.
Marsan has also introduced "company visioning" where management discusses the company's direction with employees so that they are clear about its goals and achievements. A company "occupational health doctor" is also on hand to teach employees stress management techniques and give stress counselling where needed.
Given that job security and job progression are important motivators, it's fairly self-evident that a thriving company will find it easier to keep staff. IT services company Edenbrook Solutions is currently growing fast, and according to marketing director David Kilpatrick: "Growth is by far the best motivator."
But Edenbrook also recognises the need for employees to feel empowered and involved in the company. It has a flat structure with a large number of senior consultants and an open-plan office, which, the company believes, improves communication. In keeping with psychologists' recommendations, salary is at least partly contingent on performance; employees are paid on the basis of both overall company performance and earnings generated by individual practices within the company.
Do you want the good news or the bad news?
Good communication, says Kilpatrick, is an important aspect of employee empowerment and motivation. "Companies often make a point of telling staff how well the company is doing, but they are rarely so precise when it comes to communicating bad news," he says. "We believe in saying exactly how we are doing, good or bad."
The importance of career development as a motivator is widely recognised throughout the computer industry. When the British Computer Society (BCS) launched its Information Systems Quality at Work scheme, which offers accreditation of career development procedures and practices, over 40 companies signed up.
One of the first two companies to achieve the standard is Ford Motor Company. "We get greater staff recruitment and retention from the scheme," says Ford project manager Sandra Bastow. "The award and the Career Development Framework are a really good advert for Ford and a good message to give to current and future staff.
Matching personalities to jobs
To further complicate the issue of job motivation, though, people are all different and a job that motivates one person may seem boring or too stressful to another. Harvard Business Review followed 360,000 people through their careers over a 20-year period. The study found that a key factor in retaining staff is ensuring that they are matched to their jobs in terms of their abilities, interests and personalities.
Because of this, many IT companies now feel it is worth the time and expense of carrying out psychometric testing on their staff. Syntegra, for example, uses a psychometric test called the Insights Discovery Preference Evaluator to evaluate employees' work preferences, perceptions, strengths and weaknesses and blind spots. All the company's graduate starters, around 200 project managers, the board of directors and many senior managers have all taken the test.
"In increasing our knowledge of the people around us, we are more likely to be able to devise the correct strategy for achieving a desired result in any given situation," says Ed Lee, skills and resourcing manager at Syntegra."
Five steps to leadership
In the end the responsibility for motivating staff, Professor Warr points out, comes down to good leadership on the part of managers. He identifies five steps to good leadership. One, providing vision or enthusiasm, communicating the value of the group's task and building up a lively and purposeful corporate culture. Two, developing and applying reward schemes tailored to individuals' needs and values. Three, encouraging new ideas and ways of working. Four, structuring the work to create specific targets. And five, showing consideration for staff welfare. "However," he adds, "there may be no need for leaders to be actually liked."
How do you see life in 2002?
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