Attracting and retaining top IT (Information Technology) talent is a major concern for most organizations. As we transitioned into the new millennium, the dot com boom turned to a bust, Y2K was over, and the recession hit, everything came to a dramatic halt. The economy then improved and was struck again with the more severe recession of 2008. The economy is now improving and the hiring of IT staff is expected to rebound. It will not likely grow at the breakneck speed of the 90s, but it is anticipated to grow. It is a continuous cycle that must be addressed, as the demand for IT grows.
Today, new skills are required to compete in a global economy where organizations have new opportunities to leverage IT, all of which present new alternatives to consider. In the next ten years as baby boomers retire, even more skills gaps will have to be reconciled. Finding and keeping IT professionals with appropriate skills is no easy feat. Today’s IT professionals require not only strong technical skills, but also excellent business, management, industry, and interpersonal (e.g., speaking and written communications, negotiating, marketing, teaming) abilities. Additionally the choices for meeting the skills demand include more than just hiring the best candidate(s). Considerations like training/educating existing staff, outsourcing, partnering/collaborating, and acquiring new organizations each provide unique alternatives to the hiring conundrum.
This book will be a comprehensive presentation of current and emerging perspectives focusing on all aspects of managing IT human resources from the view of both leading practitioners and academics located around the globe. It will focus on the results of recent research (from exemplar practitioners and academics) and their implications to IT human resource considerations. It presents what IT professionals are seeking in a position, characteristics of the IT environment that contributes to the HR complexity, the retention of IT talent, stress in the workplace, IT career development, and the impact of IT outsourcing. Real world examples are presented to illustrate these important insights.
This book will introduce the state of human resources within the IT organization and review the critical elements that must be effectively managed by every CIO, IT manager, and Human Resource professional. It also provides important insights that all IT professionals should consider. With senior business executives acknowledging the important role IT has to play when it comes to integrating and delivering results (e.g., increased profits, revenues, and productivity, and reduced expenses) across a company in cost effective and efficient ways, there is greater need to have the right people doing the right job.
IT organizations must ensure that they have the right personnel for the respective positions, develop new IT strategies in accordance with the dynamic environment, nurture and develop talent, assist senior executives in sourcing decisions, and have a career advancement process for every employee which will allow them to excel in their professional career.
At the same time, the Information Technology work force is experiencing the migration of many skills offshore due to the visibility of global sourcing, the reduced pipeline of skills in high-income locations due to several years of lowered enrollments in IT-related university programs, and the impact of the largest retirement bubble in history (the retirement of baby boomers).
The skill set required for a successful career in IT has also evolved overtime from a more technical focus to a more balanced focus (including business management, industry, and interpersonal skills). The book presents the transformation of IT talent requirements in the 21st Century.
It is also important to understand the perspectives of the diverse workforce (geographic, cultural, sex, and age) that must effectively work in cohesive teams.
The above important considerations will be elaborated on in this chapter as the respective chapters of the book are introduced.
SECTION 1: TRENDS IN SKILLS/CAREERS AND DEVELOPMENT
Traditionally the role of IT was to provide technical support to the business; most frequently, this was just in support of back office processes (e.g., accounting, payroll, email). Over time, IT roles have evolved to a key enabler/driver of front office services including direct support to important business partners and customers/clients. Significant emphasis is now on aligning IT and business strategies that increase revenues and productivity.
In 2009, the results of the Society for Information Management (SIM) sponsored research facilitated by the author with results from CIOs located around the world ranked business productivity and cost reduction as the number one concern; slightly above IT and business alignment which has been a persistent chart topper. The implications of these findings are significant for both industry hiring and career development, and for planning IT curricula in colleges and universities. Understanding the appropriate skills required to attain the productivity and cost reduction demands during the recession while ensuring IT-business alignment to meet future demands is essential.
The top IT skills and capabilities that are required, in consideration of hiring and career development, and in decisions on IT outsourcing (listed in Table 1 of Chapter 1, “Patterns of Skills and Careers in the Information Technology Workforce,” by Christine Bullen and Thomas Abraham) include:
- Project management
- Business domain knowledge
These skills are required by both the client (internal IT organization) and provider (outsourcing vendor) of IT services. For example, a sound technical background with project management skills and overall business knowledge is required by IT client and IT provider companies. These skill sets are different from what was seen in the past (prior to 2000) wherein a desirable IT graduate was one with deep technical skills and a foundation in math and programming.
The authors have highlighted, in Chapter 1, the shift in demand of the skills required by individuals pursuing a successful career in IT. Their extensive research in understanding the new skills patterns required by IT professionals indicates that just possessing technical skills and domain specific knowledge is not sufficient; instead a combination of technical, business, ability to learn and comprehend new technologies, and having the right attitude are considered of prime importance.
The future in-house critical skills illustrated in Table 4 of Chapter 1 are the result of careful consideration of both client and provider IT service providers. The following section elaborates on the recruiting guidelines that all IT and HR professionals should be cognizant of. Clearly, the appropriate balance of technology, business/management, and interpersonal skills is considered to be fundamental.
Often, it is the human resources (HR) organization that emerges as the focus of many of these demands as new skill sets and new talent portfolio requirements emerge in organizations faced with a wide range of management and technology challenges with growing economic pressures, necessity for global expansion, shifting demographics and generational complexities, and constantly varying competitive pressures.
There are several technological influences which have lead to the transformation of the IT talent requirement of the 21st century. These technological factors are described by Benn Konsynski in Chapter 2, “Changing Capabilities and Capacities: Key Technology Influences in the Transformation of IT Talent Requirements in the 21st Century”. It presents the evolving role of managers and the challenges they encounter with technological advances, hiring diverse new candidates, making recommendations on IT Sourcing (Insourcing/Outsourcing), retaining quality professionals, and having effective employee career development plans. All of these considerations are the driving force behind the trends in Information Technology jobs in the future.
Chapter 3, “Trends in IT Human Resources and its Determinants” (The authors Vijay Agrawal, Vipin Agrawal, Allen Taylor, and Frank Tenkorang) introduces a new framework, described in Figure 4 of Chapter 3, which has proven to be valuable when developing IT-hiring, retaining, and career developing plans.
SECTION 2: RECRUITING
In today’s highly competitive environment, there are several considerations which organizations need to deliberate before/during the recruiting process, including the:
- talent Management approach
- human resource life cycle
- sourcing framework
- role of human resource departments in Sourcing Decisions
In Chapter 4, “IT Human Resources: Experts at Talent Management & Critical Partners to the CIO,” Phil Schneidermeyer describes the important phases and their significance in increasing the performance of IT human resources. The phases involved in managing IT talent reflect all considerations of effective talent management. Initially, it begins with identifying and attracting new workers/students by making a presentation about the company’s strategic goals, its growth, and services provided by them.
The next step is recruiting and hiring, followed by on-boarding and integration. Continuous learning and development experience is a dynamic process where experienced employees share/interact their experiences in a way that it becomes learning and developing experiences for all employees. Constant feedback for supporting employee aspirations is addressed during the engaging and retaining phase. Once the talent has been identified and developed, it is then promoted and made available for other job opportunities within the organization.
The remaining phases focus on developing leadership skills to manage new teams, succession planning, and finally termination. This process continues to evolve, successfully managing the talent and leveraging high potential employee skills to benefit the organization in the most effective way.
Within talent management, performance management and leadership development are interconnected. The success of an IT organization depends upon the quality of its leadership which is achieved via leadership development and performance management, both which should be based on talent management strategies. Organizations should grow their internal staff capabilities by continuous recognition of the skills required, talent development, retention and promotion programs, and creating a leadership pipeline that ensures management and staff succession.
The HR lifecycle has five phases described as follows (Luftman, 2010):
- Determine Personnel Needs (Selection): The purpose of this phase is to analyze and identify personnel gaps, and staffing strategies to close the gaps to derive a sourcing plan.
- Sourcing: This phase performs sourcing for permanent and contract candidates. It undertakes screening for permanent hires, usually working in collaboration with agencies and technical recruiters.
- Interviewing: This process applies best practices for individual or group discussions. Evaluating candidates (internal and external) helps in establishing a long term relationship with the best possible employee.
- Hiring: Finalizing the selected candidate, including due diligence, and reconciling responsibilities, salary, benefits, and reporting.
- Managing: Includes preparing for staff retention/attrition, compensation, benefits, performance measurement, handling layoffs, and IT staff career development.
The first step of the IT human resource life cycle is the selection process which is discussed in Chapter 5, “Selection: the Crux of IT HR Management,” by Moore and Williams. They elaborate on two key inputs:
- Result (information) of the job analysis
- Pool of applicants generated through recruitment strategy
Candidate selection can be considered as completing a simple application form followed by a brief interview, and/or a more complex process like situational structured interviews, simulations, performance tests, and other techniques which may be required for certain job openings.
Luftman’s SIM survey identified attracting, developing and retaining IT staff as another pressing issue for CIOs. It is important to address the relationship between IT recruiters and IT executives (CIO, Director of IT, IT executives) in the hiring process, especially when it comes to the hiring of project managers or experienced IT personnel. There is often disparity in the valuation of IT hiring criteria used by IT recruiters and the valuation of criteria used by the IT executives.
In Chapter 6, “IT Hiring Criteria versus Valued IT Competencies” Jo Ann Starkweather and Deborah H. Stevenson present best practices for IT recruitment. Their analysis determined that knowledge, skills, and abilities are core competencies viewed by hiring, IT-recruiters, and IT-executives. Table-1 and Table-2 in Chapter 8 provide the details of the hiring criteria preferences by IT-recruiters and IT executives respectively, while Table-4 compares their hiring criteria preferences. Finally, they recommend that IT management needs to teach their recruiters how to understand and recognize the demands of IT and how to “speak IT”. They should be considered an important part of the team that helps the senior IT executives with the entire sourcing process.
Derek Sedlack in Chapter 7 describes the the use of an expert systems as a valuable step in filtering prospective candidates. The biggest advantage of having this system is that it provides 24/7 inter/extra-organizational access and it can serve as a single reference vehicle for the job postings (for the hiring manager and applicant).
To outsource or insource an IT initiative is an important business decision that IT executives need to make by considering things like the costs to be saved, skills to be attained, intellectual capital to be protected, and standards to be maintained. According to Anna Frazzetto, to make the best possible IT sourcing decisions, the IT-HR team must be ready to provide real-world facts on human capital data, in four core areas, described in Chapter 8:
- Talent Cost
- Skill Roster and skill need
- Workload balance & strain
Frazzetto discusses these core considerations in detail along with the specific tasks that organizations make regarding Outsourcing versus Insourcing.
The recession has relegated the priority of IT human resource concerns, though we expect them to raise up the management agenda once the recession is over. The current recession has exposed the critical role of executives in leading their companies, and IT is no different—CIOs serve as leaders and role models to their IT staff. This role becomes extremely important in downturns when employees look up to their leadership. Concerns about CIO leadership will probably continue to be important, as CIOs with the appropriate leadership skills become more difficult to find.
Given the persistently high ranking of management concerns in previous SIM surveys, and our expectation that they will climb back up the management agenda after the recession, the 2009 survey asked respondents to rank their time priorities for IT human resource issues. In first place was “developing interpersonal skills” (e.g., communicating, collaborating), with 45% of U.S. respondents indicating its importance. Second was “developing business skills in IT,” mentioned by 35% of the respondents. “Developing technical skills” (8%), Retaining (7%) and Recruiting (5%) staff were far behind. However, when asked as part of the question on time priorities allocated to IT and business alignment, the time devoted to skills was in last place, with only 7% of organizations ranking it as a priority. Again, this was being asked during the economic recession.
In Chapter 9, Kristen Lamoreaux & Dibi Varghese discuss the role of women as an important rising workforce in IT. The chapter focuses on several factors including work life balance, gender schema, female role models, mentoring challenges, visibility, and recognition programs which will help organizations leverage their female employees.
SECTION 3: RETAINING
Retaining IT personnel is crucial when it comes to developing the respective career building and motivational strategies necessary to maintain the IT workforce. Concerns about turnover have led firms to create formal employee retention programs. These programs are designed to focus on what IT employees are seeking to keep them satisfied and thus avoid the disruption and expense of a high turnover rate.
Luftman’s SIM research identified the following six vehicles for retaining IT professionals:
- Open and honest communication
- Good worker-supervisor relationship
- Trust among co-workers
- Challenging work experience
- Opportunity for advancement
- Balance between work and outside life
The recommended guidelines for a successful retention program are as follows. First, organizations need to adequately compensate their IT workers. Competitive salaries should be within 10% of market rates. Naturally, employees should be provided with health (including dental and vision) insurance benefits. Some companies include financial benefits, such as matching 401K plans, pensions, employee stock purchase plans, and tuition/education reimbursement. Lifestyle benefits are a bonus. These include casual dress, telecommuting, flexible hours, and sabbaticals.
Employee training/education has long been recognized as key in not only preparing employees for the challenges of the job, but also in improving morale. Organizations that invest less than 3 percent of payroll expense on training often see twice the staff turnover rate compared to those that invest 10%. Since the early 90’s, IT organizations typically allocate between 15-18% of their operating budget on training.
A positive work environment goes a long way in ensuring employee contentment and retention. One effective way is to provide IT professionals with a chance to work with new technologies through job-rotation programs. Some organizations even attempt to make the work environment fun by using innovative benefits such as “walk-up massages” and “napping tents”.
Employee burnout can be reduced by allowing time-off for employees that have put in long hours over an extended period to work on a project. Providing challenging work to deserving employees is fundamental. More mundane tasks such as Help Desk or End User Support can sometimes be outsourced or co-opted out.
As described in Section 2, hiring the right people is paramount. Managers need to analyze an individual’s cultural fit within the organization and the role the individual might be best suited for in the long-term. Aggressive go-getters can “go get” the next best employment opportunity for themselves.
Mentoring is another important factor. Individuals who are able to play well in the roles of both “mentor” and “mentee” are especially favorable for the organizations in which continuous learning and innovation is advocated.
Important characteristics of a mentor are to be one who is trustworthy and approachable. Many mentees like their mentors to have a good sense of humor, be a good listener, admit mistakes, and share failures. The more comfortable you are in giving and receiving feedback the better it is for the mentor and mentee to understand each other.
Good mentors emphasize “coaching” rather than “consulting”. They should be able to create an environment of mutual respect and trust that encourages the mentee to learn and grow. Such “mentorship” fosters an environment of sharing and has become another major source of job satisfaction in the IT industry, besides competitive compensation packages.
That being said, employees should be polled at least annually to determine their satisfaction levels and/or concerns. Some firms use a 360-degree review process so that managers can better understand how their staffs perceive them.
In Chapter 10, “Retaining IT Professionals,” Gina Pipoli and Rosa María Fuchs discuss the best practices for keeping people in organizations and analyzing important retention issues. The chapter evaluates the six factor model developed by Julia Naggiar (2001):
- Career development
- Feedback and evaluation
Based on their extensive research, career development and compensation are considered to be the top two most effective practices for employee retention.
The turnover rate of IT personnel (Luftman SIM research) has typically been 7-8.5% of the total IT staff. It is relatively low in comparison to the rates of five-ten years ago. In 2009, the IT staff turnover rate was 6.90; very low in comparison to 2008 (Average 8.40) and 2007 (Average 8.20).There are several reasons why management needs to avoid a high turnover rate. First, it is difficult to anticipate human resource demands without knowing what skills are required. Second, losing employees is very disruptive to the organization as a whole. The loss of knowledge severely impacts the organization.
These costs are hard to pin down, because different firms value the retention of employees differently. However, the costs generally come from a combination of the direct costs associated with recruiting (e.g., advertising, recruiting, selecting, training, recruiter fees) and indirect costs, such as low employee morale and/or organizational satisfaction. Dysfunctional turnover occurs when effective performers leave an organization that does not want to see them go. Exit interviews help to identify the reasons for leaving a company which will help identify employees’ requirements, desires, and needs to retain their most qualified staff. Recognize that the most important factor is to keep employees comfortable and happy.
It is important to have a vision and strategy addressing what and how the organization wants employees to perform. It should define the methods to achieve these goals and provide guidelines for reconciling obstacles. An effective review process that has clearly defined objectives and provides valuable direction to employees is essential.
Luftman (2007) identified that it is important that companies update their retention programs and regularly communicate to their employees about job satisfaction, advancement opportunities, new challenges, leadership changes, ability to use new technologies, job security, and faith in the organization’s financial security, location changes, retirement plans, and bonus plans.
With Baby-boomers (born 1946-1964) retiring and Generation X (born 1965-1980) workforce aging, Generation Y (born 1981-1999) is starting to enter the IT job market. The four characteristics of the new generations of IT professionals, described by Jannie M. Buitenhuis in Chapter 11, “In the Pipeline: The New Generations of IT Professionals,” are having a set of shared responsibilities, optimized use of technology, space for knowledge creation, and addressing corporate social responsibility by contributing to environmental friendly and non wasteful technologies. Organizations need to consider the generational differences when recruiting and retaining candidates.
An important function of the IT manager is to ensure the personal career development of IT employees through education and training. The Conference Board reports that workplace education programs improve employee morale and esteem. In fact, this was the number one benefit according to 87% of the companies which provide such programs.
Other benefits include:
- Increased quality of work – 82%
- Improved capacity to solve problems – 82%
- Better team performance – 82%
- Improved capacity to cope with change in the workplace – 75%
- Higher success rates in promoting employees within the organization – 71%
- Increased output of products and services – 65%
- Increased employee retention – 40%
These results suggest that education programs have beneficial effects far beyond the education itself. And, perhaps even more importantly, the programs appear to counteract some of the stress-induced problems and enhance employee retention.
IT managers must evaluate education programs to determine the right amount to be invested in and the right mix of delivery mechanisms. The delivery mechanism varies from computer-based training, in-house training, to outside classes at professional and academic institutions.
Different types of education can be handled effectively in different ways. Individuals respond differently to various forms of education. Therefore, the IT manager needs to customize educational opportunities to the individual IT employee. In addition, there should be a formal evaluation programs that measure the effectiveness of the educational programs.
As mentioned previously, education should encompass the full range of information that each IT professional needs for their personal career development. This includes general managerial skills, communication skills, and technical skills. Many companies provide tuition reimbursement for individuals seeking higher degrees such as Masters Degrees in IS or Business Administration as well as Doctoral degrees in these areas. It is not uncommon for firms to require a commitment of several years of employment in exchange for providing tuition reimbursement. Most IT staff members are willing to make this commitment to gain the higher degree, which will be important for their careers.
Understanding the needs and desires of IT employees or their reason for dissatisfaction will always help organizations develop employee retention programs. The ranges of methods used to obtain employee feedback used include:
- Exit interviews
- Informal conversation between employee and supervisors
- Annual employee performance review
- Periodic formal conversation between employee and executives
- Periodic formal conversation between employee and mentors
- Information employee surveys
There are monetary and non-monetary characteristics which have an influencing effect on IT employee retention. In Figure 1 of Chapter 12, Deepak Khazanchi and Dawn Owens elaborate on these characteristics (monetary/non-monetary) and their implications. It can be observed that not all employees are attracted by monetary incentives, and thus, for them non-monetary retention practices are more important. For example, non-monetary incentives like job characteristics, work culture, and team and community building have an influencing effect in retaining IT employees. Managers must be able to identify what motivates each employee.
One effective attraction and retention strategy is to base compensation on performance. Another is to effectively communicate to IT employees the career path that they can pursue, which is in alignment with the organizational goals and individual interest. Employees also need to understand what they need to do to attain these career goals. Personnel Decision (2008) found that over 90% of IT professionals indicated that career path understanding is the most important reason for staying in their positions.
In Chapter 13, the research conducted by authors Cesar Akira Yokomizo and Lina Eiko Nakata identifies the expectations of IT professionals. As summarized in Table 4 from Chapter 13, learning and development is considered most important by IT professional in ICT and in non-ICT companies. The chapter also provides different considerations based on gender, which is significant considering the rise in women in the IT workforce. As discussed, it is imperative to consider gender when deriving and deploying retention policies.
In the past, an upward linear progression within the same industry was considered as stable employment; in IT, the path began as Junior Programmer to Project Manager, First Line Manager, Middle Manager, to CIO. Chapter 14, “Present, Past and Future of IT Careers, a Review: From the Local Pyramid to the Flat World” (authors Ricardo Colomo-Palacios, Adrián Hernández-López, Ángel García-Crespo, Fernando Cabezas-Isla) describe emerging career models including Boundaryless, Symbiotic , and Portfolio.
SECTION 4: EXECUTIVE PERSPECTIVES
In this section of the book, we have an opportunity to hear the experience from IT leaders.
Effective talent and team management is a necessity as discussed by Marianne Broadbent in Chapter 15, “Building Great talent and Effective Team.” She presents the benefits approach to talent management, as well as focusing on team dynamics and mutual accountabilities. Every organization should strive to bring out the best from each employee. For the CIO to be successful, it is important to build and stimulate effective teams.
Another important consideration is the leadership development process as conveyed in Chapter 16, “Building IT Capacity for Leadership in a New Age,” by Mary Jo Greil and Elaine Millam. Organizations must unleash the talent of those people who have the skills and capabilities to maximize organizational performance.
After leading IT Organizations for over twenty years John Stevenson, in Chapter 17 “Developing A players,” introduces the team “A-Player”. These are employees who have demonstrated leadership skills, project management skills, core IT technical skills, and have made a strong impact in challenging situations. Organizations should look for these A-players across the staff and create an environment where talent grows and stays to benefit the organization. He discusses the state of the art in identifying such talent, especially when teams are not co-located in the same geographic area.
In Chapter 18, “The Critical Five People Practices of IT Leaders,” the founder of CIO Service Group, John Oglesby, shares the activities that are most likely to motivate and make employees be loyal to their organization. They are, to give people:
- Interesting and challenging work
- The freedom to do it their way
- Things they can “own”
- An environment in which they can excel
- Recognition for their efforts and accomplishments
Luftman’s Strategic alignment maturity assessment discusses the following six components which help in bridging the gap between IT and the business:
- Competency/Value measurement
- Scope and Architecture
Each component focuses on core competencies which will serve as guidelines for IT-HR recruiting and team development. With over 1/3 of the Global 1,000 companies participating in assessments, the Strategic Alignment Maturity (SAM) assessment has helped organizations to not only improve the relationship between IT and the business, the Skills Maturity component helps organizations identify opportunities to enhance IT-HR considerations.
SAM assessments carefully consider the key components of the Skills maturity including:
- the extent to which an innovative environment is facilitated for individuals
- having a balanced culture and locus of power in decision making
- organizations ability to manage change
- Opportunities for career crossover
- Effectiveness of programs such as cross training and job rotation
Building of interpersonal skills across IT and business units is fundamental.
Lisa Meisenbacher, in Chapter 19, “Considerations for Organizations and Personnel,” discusses the long-term career opportunities in the IT industry and the immediate paradigm shift in the whole recruiting process. The author is optimistic that the networked organizations will provide a breeding ground for developing the skills that have been lacking in the IT industry.
In Chapter 20, “IT HR and the Perceived Value of Networking Organizations,” the issues, controversies, and problems experienced by IT professionals are identified, as well as valuable recommendation to address them. The author, Donald Brown, derives these solutions based on the synergies between networked organizations and the human resource organization
SECTION 5: CASES
The Brazilian Cases
In Chapter 21, the authors Ângela F. Brodbeck and Henrique J. Brodbeck discuss the Information Technology (IT) structure for two Brazilian companies, identifying their similarities and differences with respect to organizational culture and interpersonal relations, in the form of managing and motivating IT departments.
The German Software Manufacturer Case
In Chapter 22, Andreas Eckhardt, Wolfgang Brickwedd, Sven Laumer, and Tim Weitzel present the implications that social networking is making on recruiting. This case highlights the need for IT to go beyond conventional recruiting and to use new social networking tools (e.g., Linkedln and Facebook). This case study introduces the need and challenge for transforming recruiting.
An organizations ability to manage change in this dynamic environment is a constant challenge. Finding, developing, leveraging, and retaining them is a daunting task, but a necessity for organizations to master. Talent management is one of the phases in the human resource life cycle that helps define the needs of the employees and allows them to achieve their career aspirations. The successful organization of the future will be the ones with a prepared motivated team. The successful team will be comprised of people with the appropriate balance of skills who have taken charge of their future.
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360-degree review – Is review process allows each individual to review his or her supervisor as well as be reviewed by them.
Boundaryless career: Boundaryless career represents the globalization of career, that is, individual transcending psychical and psychological boundaries, establishing new career opportunities.