Beating the High-Tech Blues.

The rap on reversing technology brain drain.

Remember when we referred to our employees as staff? Or simply employees? Not anymore. Now we call them talent, and perhaps rightfully so. Of course, we've always tried to hire talented professionals. It's just that we didn't have the demand for technical specialists that we have today. So, if you have good people and want to keep them or if you need to find good people to augment your technical staff, you have got to think beyond traditional hiring tactics.

Consider these facts:

* Computer and business equipment manufacturers hired 66 percent more new college graduates in 1997 than they did in 1996.

* Computer software development companies hired 36 percent more college graduates than in 1996.

* One half of all college graduates in 1997 went to consulting firms.

* Starting salaries for graduates with computer-related degrees are rising 10 percent annually.

These figures, from a recent survey conducted by the Chicago Tribune, illustrate how college and university graduates, especially those with computer-related degrees, are in extremely high demand. At the same time, The Cato Institute, Washington, D.C., reports that American colleges are producing only 25,000 graduates in computer science a year (40 percent fewer than in the 1980s) and only 20,000 electrical engineering graduates (one third fewer than a decade ago). "While many high-tech jobs do not require such degrees, the decline in computer and engineering degrees can only aggravate whatever shortage exists," states the institute's March 30, 1998, report.

Meanwhile the U.S. Department of Labor reports that the demand for information technology (IT) workers--specifically computer scientists, engineers, and systems analysts--will double during the next 10 years, creating a need for more than one million additional high-tech employees. The IT Workforce Study, a 1998 collaborative research project of Virginia Polytechnic Institute and State University, Blacksburg, and the Information Technology Association of America, Arlington, Virginia, found that 346,000 IT positions were currently vacant in the three occupational clusters. The vacancy numbers represent about 10 percent of the total number of reported current core IT employees (3,354,000) or about three vacancies per company surveyed.

At the Urban and Regional Information Systems Association, Park Ridge, Illinois, our human resource plan aims to provide a high-quality, stable, specialized workforce. However, like many other employers, URISA and its members have not been immune to the many trends that have resulted in greater demand for staff and a shortage of talent to fill the positions, particularly those in the IT area. By studying the reasons for the talent shortage and focusing on nontraditional and creative solutions, URISA and its members have been able to keep turnover low and salary and benefits from soaring out of control.

Behind the staffing dilemma

A number of factors, some of which the headlines have been heralding for several years, have come together to put the squeeze on many an organization's ability to keep high-tech staff positions filled.

* Social and workplace changes.

During the last decade, several important social changes have occurred that affect associations' ability to recruit, manage, and retain employees. In the past, organizations had a more layered structure, whereas today they are flatter and less management-intensive. Without that middle management layer, promotion opportunities are severely limited. Talented people are often picked off by organizations that can offer higher rank, recognition, and rewards.

Furthermore, individuals used to feel more secure in their employment. Everyone knew that "Big Blue" and other large corporate employers seldom laid off or fired staff. These days, however, as organizations strive to become "lean and mean," downsizing or rightsizing has become the norm and employment security is no longer guaranteed. Typically, workers consider that their jobs may not always be secure. Positions are subject to the vagaries of consolidation, mergers, or outright closing--and often due in little or no part to the employee's own performance.

Where once employees could anticipate future rewards from their organization in return for their loyalty, now it is not uncommon to see employers in court attempting to reduce or eliminate long-term employment benefits that had been extended to retired staff. This combination of factors has made employees feel they must plan for their own futures, rather than depend on precarious future benefits and rewards that may easily slip from their grasp. It has made them constantly vigilant to finding opportunities elsewhere.

A multigenerational workforce also adds to the challenge. Today's generation X worker is reported to be much less committed to the organization and much more committed to self and family. Unlike the workers of the 1980s, who were willing to do whatever was required to get ahead in their careers, many of today's high-tech workers place challenge, growth, and transferable skills ahead of longevity in the same position.

At the same time, you may have high-technology workers who were trained on systems decades ago, and some of these individuals will be resistant to learning new technologies. Technology has changed rapidly during the last decade. While they may be working on what seem to be aging dinosaurs, many baby boomers who are within 5-10 years of retirement do not relish the prospect of training and certifying on new systems during their final years of employment.

If we do not meet the needs of these quite different groups, we will not be able to achieve our staffing goals by attracting the combination of talents that we need.

* Internal demand for staff. Any IT manager knows that there are ever-greater demands being placed on our information systems. More users need access, data must be shared among departments, and sometimes with the membership, via our Web sites. Associations are upgrading to new client/server systems, and leadership demands Web site improvements. This leads to a wider variety of systems and a greater number of users requiring increased support. At the same time that demands on information systems are ever greater, IT staff is pressuring for more nontraditional creative time as well as more training time.

* Outside forces. I sometimes hear that nonprofit organizations are behind the curve on both the equipment side and pay scale of technology. Because URISA's members are employed in the high-technology field, I recently had the opportunity to attend an as sociation-sponsored job fair and to discover the reality of this perception firsthand. In talking with individuals who were perusing job opportunities, I learned that they had never considered working in nonprofit organizations or public agencies because of this perception. True or not, it appears that many of the best and brightest professionals will only consider positions that provide them with the opportunity to work on the latest systems and in organizations that they feel will keep up with technology. So, just getting these individuals to consider a position within your organization can be a challenge. Competition from the for-profit sector, then, does not only come in terms of salary.

* Legacy systems. While many IT firms can often lure talent with a variety of cutting-edge projects, many associations still need to hire and retain staff to work with legacy systems, those older systems that perhaps run on mainframe or minicomputers, often using proprietary or outdated software languages. These systems are often integral to an association's operations and may not yet be Y2K-compliant. "Everybody wants to be working with the latest, but unfortunately what really runs the business are these old legacy systems," says David Reid, IT consultant and former director of information technology at the American Association of Neurological Surgeons, Park Ridge, Illinois. But where can you find individuals willing to continue working on legacy systems, when what they often value most is having new, more transferable job skills?

* High-tech hot buttons. In addition to economic and social trends that impact high-tech hiring, there are other reasons for employee dissatisfaction and turnover. "As a manager of technical staff for many years, I've had the opportunity to exit-interview a number of technical staff," says Reid. "While money was often given as the reason the employee was leaving, I found with some gentle prodding that money only surfaced as an issue when the employee had already become unhappy with something else that precipitated the search for another job."

An informal poll of human resource managers conducted by Reid confirmed his suspicions. The following items were listed as the primary reasons that high-tech workers begin searching for other employment opportunities:

1. over-focusing on problems by management;

2. too much public recognition of non-IT employees;

3. playing favorites;

4. failing to develop and mentor employees;

5. failing to provide training on state-of-the-art technologies;

6. ignoring or belittling suggestions from staff;

7. management being too directive or controlling;

8. not c1arifying how to achieve rewards; and

9. over-focusing on seniority.

Solutions

In a competitive marketplace, then, how can associations recruit and keep effective technology specialists? What are the appropriate reward and recognition factors, and how is performance evaluated?

We've found at URISA--and through experiences of our members, technology professionals--that if you want to stop the technology brain drain, there are three major areas on which you should concentrate.

1. Financial incentives. Financial incentives are usually incremental. They include salaries and periodic increases. They also include springing for a party if we meet our goals, kicking in bonus pay if we complete a project under budget, and coming up with that gold watch for so many years of service.

There are other key elements, however, that should be included in a compensation package strong enough to compete in today's job market.

* Hiring incentives. Are you prepared to offer hiring incentives to get the new high-technology staff you need? According to an Infoworld survey (June 15, 1998), more lower-level staff positions received hiring bonuses (4.3 percent) than did the managers for whom they work. It is not uncommon for corporations to offer hiring incentives of $2,000--$5,000 to employees in the $40,000--$60,000 salary range. Managers must convince senior-level executives and volunteer leadership that providing funding for sign-on bonuses is an important recruiting tool in this tight labor market.

Even though URISA's members, and therefore our leadership, come from the technology field, we still have to work hard to convince them that incentive pay (sign-on bonuses, performance awards, etc.) is good business. This seems to stem from the fact that many employers are still not doing this. In any case, we try to show the elected leadership what the for-profit world is doing and stress performance increases we have achieved by offering similar incentives. Regardless, the idea requires constant reinforcement--both subtle and not-so-subtle--but the battle is worth it to retain high-quality staff. The function falls primarily to me--and I think it should lie with the CEO of the organization--and is reinforced by senior managers who are working closely with individual board members to build our case.

* Equitable pay. One of the most obvious solutions to this problem is to ensure that you keep the workers you already employ. If you are not making market comparisons and adjusting salaries to match the market--and also ensuring that the new employees you hire are not paid more than your current employees in similar jobs now--you will not be able to retain your current workforce.

URISA and its members rely on several sources to ensure that we are keeping pace. We print our own monthly newsletter, Marketplace, that provides local and national job listings, some of which include compensation and benefit offerings. Research keeps us plugged into what government agencies are paying for similar jobs. I have, in the past, also commissioned compensation evaluation studies to help classify certain jobs and provide some method of job grading. This is important information that should be gathered at least every five years--and more often if the organization is growing and adding new positions. It's just too easy to overlook some of the longer-service employees and fail to compare their compensation with that of new hires.

The vast majority of employees participating in the Infoworld survey indicated receiving a salary increase during the past year. While setting salaries at appropriate levels and ensuring an annual performance review and raise are important, the amount of a raise is definitely not the only factor that affects how employees feel about their salaries. Individuals feel better about their compensation when they understand how raises are determined. So, it is important to not only perform reviews and award pay raises, but it is equally important that employees be informed of the increase and how it was derived. Of course, telling employees why they are getting a raise is only part of the issue. They must also agree with the reasons for the raise, along with the justification for the increase amount.

At URISA, this is a continual process that we encourage. I keep the management team informed about how we are doing and what we need to be doing to meet our goals. They, in turn, keep the staff informed. While we conduct the annual review, it is more of a formality. Our goal is to do more of a continual review so that by the time the annual raise and/or bonus comes around, no one is surprised.

* Bonus pay. Tying raises to job performance generally makes workers happier about how much they earn. Although it is important to keep up with the going rates being paid to IT professionals, salary and related annual increases should not be the only way to reward employees. In fact, recent studies have shown that using raises to reward good performance can be less effective than bonuses. Consider the hard-working employee to whom you give a sizeable annual increase. Several years down the road, certain factors may cause your star worker's performance to decline considerably, although it still meets expectations. You are now committed to the higher pay rates. It may be better to pay a more typical salary increase (a cost of living raise, for example) and then give the rest in a form of incentive or bonus pay.

We base our bonus program on annual strategic goals for the association coupled with our bottom-line performance. Twenty percent of all URISA's annual net revenues go into a fund that can be used for bonuses, provided that the nonprofit mission has been advanced.

Nearly 57 percent of IT professionals who responded to the Infoworld survey said they received some sort bonus last year. Bonuses ranged from annual personal performance bonuses to those paid based on team performance, project completion, years with the organization, certification, and referrals of new employee to the organization. Average bonuses for middle managers were approximately $7,500, and staff members reported average bonuses of $6,700.

Despite compelling reasons to compete with for-profit employers in these ways, it is often difficult to convince elected leaders to approve incremental incentives. And even if you succeed, in the end, pay incentives rarely overcome environmental factors.

2. Work environment. Managers often confuse incentives with environment. The environment in which they perform their jobs is what your employees think about on their way to work each day: "Do I enjoy the tasks ahead? Am I comfortable with my colleagues? Do I like my workspace?"

If, in the opinion of your employees, your management team is ineffective, co-workers are unqualified or disruptive, the office is uncomfortable, and the commute is too long, paying more money or handing out large bonuses are only temporary fixes. Ensuring a quality environment will do more to attract good candidates; it will also keep your valued employees from comparing dollars. If you are having trouble recruiting and keeping IT staff, make sure you know which aspect is causing you the most problem--incentive or environment.

If you can't afford competitive salaries or annual bonuses, you can still recruit and retain a high-quality technology workforce by making sure you offer a comfortable, flexible, and challenging environment.

* Benefit programs. Environment also includes the benefit package items you provide, such as medical and dental insurance, 401(k) plans, vacation, flextime, payment of membership dues, and funding to attend conferences. These are very important to your staff, and should not be confused with more direct financial incentives.

* Motivators. Consider the following factors that URISA members and staff have found to create the most positive impact on employees:

1. reward initiative;

2. encourage risk;

3. encourage responsibility;

4. listen;

5. challenge to improve;

6. encourage feedback;

7. educate IT staff on organizational goals;

8. encourage brainstorming;

9. assign projects uniformly;

10. encourage personal development;

11. broadcast staff accomplishments and

12. provide a creative office environment.

Most of the above items cost the association little money. The important thing is: Do you and your management team really know your IT staff? Do you join them for impromptu lunches? Have you befriended a few who aren't afraid to tell you what the others are thinking? If not, you should. We've found at URISA that these are effective ways of getting to know your technology team and understanding what satisfies and motivates them. Knowing the answers to these types of questions is the first and most important step to keeping your staff in place.

* Management support. Unfortunately, many IT managers are not accustomed to being creative personnel managers. "How many of your IT staff have simply been promoted based on their excellent technical skills?" asks the American Association of Neurological Surgeons's David Reid. As Reid notes, many of our technical managers today have had little formal training in the area of hiring, managing, and keeping staff. Consider creative courses for your IT managers that focus on building the previously mentioned skills in your management staff. While these IT managers may be more inclined to take the latest technical training courses, you will get much more mileage out of management training.

* Flexible work options. Of course, high-technology workers are creative individuals who do not always fit well into the organizational culture. Several items can impact their ability and willingness to perform well, and organizations that do not offer these benefits to all employees should consider ways to implement the following incentives for its high-technology staff:

* flexible hours;

* casual dress;

* social interaction with other departments;

* creative time;

* comfortable and pleasant workspace;

* cross-training and job sharing;

* equipment for home use;

* state-of-the-art equipment and software;

* travel in lieu of bonuses; and

* gifts, tickets, and/or dinners.

While some of these initiatives cost little or nothing, providing them can be the difference between a happy and an unhappy employee. It takes little funding to purchase tickets to concerts or sporting events, but most managers report getting a big return on this small investment.

For example, in the October 1998 issue of Software Magazine, office designer Eric Gould explains how he intends to design the headquarters for Parable, Inc., a software company in Newton, Massachusetts. Gould says the standard, vanilla office interior with cubes, white walls, drop ceilings, and fluorescent lights repels many and makes it more difficult for the organization to recruit skilled employees. "Cubes are probably one of the most oppressive, uncreative working environments," says Gould.

Consider designing a mixture of offices with doors and open space for project teams. Use color and provide areas where employees can congregate and conduct informal meetings. Gould also notes that one inexpensive alteration that a company can make is to purchase color-balanced bulbs that eliminate flat fluorescent light. Most importantly, involve all employees in how the redesigned offices should look. Encourage them to be creative when thinking of office space redesign, and you may find that same creativity blossoming into their daily work.

3. Nontechnical support staff. Now, what about those legacy systems we discussed earlier? How are you going to get employees to keep your older systems working? Many businesses and associations have turned to recruiting nontechnical people (both internally and externally) who are interested in a career in information technology. Job fairs that promote this concept and end with a standardized programming/systems aptitude test have provided many organizations with a good pool of candidates. Hiring of the candidate is usually followed by 5-10 weeks of instruction in the legacy system/language, with the promise of future training in newer technology as the organization transfers its legacy systems to more modern platforms.

Additionally, Reid offers a solution to keep your existing IT staff working on legacy systems. "Offering extensive training and opportunities to move to new internal assignments has been key in keeping legacy systems running during systems conversion," he says. While designing new systems at the American Association of Neurological Surgeons, Reid was particularly concerned with holding onto experienced Cobol programmers who not only kept the current systems running, but also provided the basis for many of the new systems' designs. "We needed to retain the expertise of these people to allow us to accurately design our new systems, while safely bridging from the old," he says. While these employees had mainframe skills and valuable system knowledge, they were restless to try out PC-based development tools. So the association started looking at products that allowed programmers to leverage their legacy knowledge while allowing them to work in a PC environment at the same time. Using these tactics allowed Reid t o retain his legacy system team during the three-year transition.

Associations face a number of challenges in the recruitment and management of high-technology staff. To effectively do their jobs, managers who are responsible for hiring, managing, and recruiting high-technology staff should make it a point to stay current with the salary trends in their area. They must also be open to creative salary and reward structures and be active in the professional development of employees and the environments in which they work.

Remember, staff retention isn't an activity you schedule monthly or annually. At URISA, it's an ongoing process that is part of everything we do. As prudent managers, we must all take steps to protect our valuable assets. We provide service agreements for our equipment, we lock the door when we leave the office...but what are we doing to protect our most valuable assets--our human resources?

David J. Martin, CAE, is executive director of the Urban and Regional Information Systems Association, Park Ridge, Illinois, and regularly writes and speaks on developing high-technology teams.

Outsourcing Strategies

Having trouble recruiting or keeping information technology (IT) specialists? Outsourcing IT projects, either ongoing or on a one-time basis, can make sense, especially in a difficult labor market. In fact, many organizations are doing so much outsourcing across their various departments that they are creating new management titles such as chief resource officer. The purpose of these positions is to create stronger ties to critical IT partners. These outsourcing experts learn to reduce costs, develop and negotiate appropriate contracts, and manage long-term relationships with both internal staff and external vendors. If your organization could benefit from having an outsourcing expert on staff, get more information from The Outsourcing Institute, a clearinghouse on outsourcing best practices and strategies (www.outsourcing.com).