Download - Paper) Attracting and Retaining is Staff
Foundation Operational Excellence Report© Computer Sciences Corporation 1998
The scarcity of IS staff has reached crisis proportionspage 4
and is likely to get worse. The ‘downsizing’ business
environment of recent years has exacerbated the
situation, and there have been radical changes in
costs of both permanent staff and contractors.page 5 IS now needs to develop
a coherent strategy for the six-stage staffing lifecyclepage 6 so as to closely
integrate recruitment and retention practices. This will only work if corporate
management sees IS staff as a critical asset for business success.page 7
IS must seek staff beyond the traditional sources,page 8 and improve its search
processes, as is being done by General Electric Medical Systems.page 9 The
Internetpage 10 is developing as a recruiting tool, but has yet to live up to its
promise.page 11 To ensure that quality standards do not drop, IS must find new
ways of attracting high-calibre peoplepage 12 and innovative ways of making
contact with them. Cisco Systems is a prime example of good practice in
this area of recruiting,page 14 as is Texas Instruments.page 16
The hiring process is best aimed at long-term fit rather than short-term
need.page 18 The recruitment procedure needs to be speeded up to capture
the most sought-after people. A US-based energy company gets good
results by involving many IS staff in recruiting, Yahoo! sharpens its selection
process with the use of best employee profiling,page 19 and IPC successfully
deploys its Assessment Centres as an evaluation tool.page 20
Attracting and Retaining IS Staff
Guide
to the
Report
Foundation Operational Excellence Report© Computer Sciences Corporation 1998
Where resources are scarce, retaining them becomes a serious issue.
One of the key retention factors is providing staff with interesting and
exciting work.page 22 Rabofacet Spectrum and Union Fenosa ACEX have
both created, in different ways, challenging work for IS professionals.page 23
Staff are also less likely to leave if they feel that the work environment is
organised to treat them as individuals.page 24 SAS Institutepage 26 shows what
can be done to provide a comfortable work environment, and Merrill
Lynchpage 27 demonstrates the improvement in staff satisfaction that
telecommuting can bring.
Escalating remuneration is a problem in most IS organisations. A financial-
services company in the United Kingdom has been successful in
dissuading staff from becoming contractors by finding creative ways to
determine employees’ priorities and getting staff onto competitive pay
scales.page 28 Compensation and reward policies need to be made more
dynamic and flexible. The UK Post Office has a range of bonus schemes
in place and is developing a ‘Psychological Contract’ based on the
‘cafeteria-style’ benefits concept.page 30
Another important factor affecting retention is the opportunity for learning
new skills. Companies furthest advanced in this field are investing in long-
term career development through Centres of Excellence and Coaches,
rather than episodic training.page 32 IS professionals appreciate efforts made
to encourage them to take responsibility for their own career
development.page 34 IBM is changing its culture in this direction, and already
has a structure and procedures in place to support it.
Foundation Operational Excellence Report© Computer Sciences Corporation 1998
When improvements have been made to the retention factors – the
work itself, the environment, the compensation and the learning
opportunities – recruiters should select the features that appeal to each
type of IS candidate.page 36
Managing people moving out is an underdeveloped area of retention
policy.page 38 There are several ways of retaining staff who are thinking of
leaving or keeping the door open for rehiring them at some future date.
IS should maintain a good performance in the seven key factors that
motivate staff to stay,page 40 and combat scarcity with an integrated
recruitment and retention strategy that follows best practice at every
stage in the staffing lifecycle.
The design of this report anticipates electronic access, and is available on CSC’s
Research Services Website at <http://www.csc.com/researchservices/>. A copy
of the report will also be contained in the next release of Foundation’s
CD-Rom. All files may be copied onto your own intranet.
For further information, please contact:
Keren Monk: +44 (0)171 344 7890 [email protected]
Mark Malone: +1 (617) 520 1081 [email protected]
Attracting and Retaining IS Staff
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The IS staffing scene has changed radically
Over the past three years, the media have continually flagged IS staffing
shortages. Surveys have reported unfilled vacancies (“190,000 in the
United States in 1997” – ITAA), the insufficiency of the education system
(“level of graduates in technical disciplines not keeping pace with
demand” – National Research Council), the effect on pay scales (“IS
groups paying 15 to 70 per cent premiums for ‘hot’ skills” – Meta
Group) and the impact on business (“one in ten companies will fail to
complete Year 2000 fix due to staff shortage” – Cap Gemini). One cynic
commented: “Unemployment among professional IS workers is so low
that the ‘unemployed’ are probably just stuck in traffic en route to
higher-paying jobs”.
Our research has shown that the IS staffing shortage is not just media
hype. Every single one of the organisations we interviewed puts the
problem of obtaining and retaining staff at the top of its agenda. None
has a shortage of all classes of IS staff, but they are all experiencing
difficulties in finding and holding some types of staff. It varies by
company and geographical region, but business analysts, project
managers, architects, network managers, package implementers
(especially SAP and Oracle) and networked computing developers are
particularly scarce.
Is the staffing shortage a temporary phenomenon? One school of
thought relates the shortage to the Year 2000 and the Euro, and believes
that when these are past the staffing scene will revert to normal.
Foundation disagrees. We see a strong demand for IS services continuing
post-2000. This will be in part because of the backlog that is building up
as organisations cope with Year 2000 and the Euro; in part because as IT
becomes ever more pervasive and a source of competitive advantage, new
technologies stimulate demand from the business. IS will face this
demand with a balance of skills that is inappropriate – too much legacy
knowledge and too little new technology experience. A Stanford
Computer Institute project concluded that the increasing demand for
software is accelerating the IS staff shortage, and the US Bureau of Labor
Statistics predicts a 90 per cent plus increase in computer jobs by 2005.
The IS staffing crisis is real, it exists worldwide, and it is likely to get worse.
This report proposes a rethink of IS staffing strategy in response to the
staffing crisis. Fundamental changes have already taken place in the
staffing scene. Staff shortages have always occurred from time to time, but
were temporary episodes – now they are chronic. Salary scales were
relatively stable over the years – now they are highly volatile for some
Attracting and Retaining IS Staff
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classes of staff. Freelancing used to be a risky venture – now the demand is
such that it is virtually risk-free. Freelancers used to be resented by internal
IS staff – now they are admired, and previously-contented permanent staff
are drawn to the contractor’s way of life. Systems maintenance was
regarded as a dead-end job populated by ‘legacy people’ – now they are the
heroes who will save the organisation from Year 2000 disaster. IS was
regarded as a young person’s profession – now the retired are being lured
back to work to help with the staffing crisis.
One aspect that has been largely ignored is the extent to which recent
corporate policies have contributed to the problem. The last seven years
have seen a lot of downsizing, outsourcing, divestments and acquisitions.
This has indelibly affected the attitude of staff towards the organisation.
IT staff were never known for their loyalty to the corporation, but now
they feel indifferent or even alienated from the business world in which
they operate. As one CIO put it: “Loyalty has gone out of fashion. The
young people we are hiring saw their loyal parents fired in downsizing
exercises.” Corporate attitudes to IS staff also exacerbate the situation.
Where IS is not seen as a core competence, IS staff are viewed as a non-
critical resource that can be bought and sold like a commodity. IS staff in
these organisations see much better conditions elsewhere, and are highly
likely to leave. Often, the only way to fill the gaps is with contractors. As
contractors’ rates rise, more staff are tempted to leave and become
contractors, which forces the organisation into a bidding war. This
downward spiral soon escalates a skills shortage into a full-blown crisis.
Staff treated as commodities
Skil ls shortage develops
Contractor rates skyrocket
Loyalty erodes
Staff begin leaving
Shortage becomescrisis
Bidding war eruptsMore staff leave
Staffing logic:Staff are an abundant,non-critical resource
The staffing shortage is not only a
supply and demand problem.
Corporate policy can make matters
worse if it puts a low valuation on IS
and assumes that IS staff are
expendable. This drives the scarcity
problem into a downward spiral.
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A strategy for the entire staffing lifecycle is needed
Our research has led us to see recruitment and retention as two sides of the
same coin. Good retention practices help recruiters attract high-calibre staff,
and good recruitment practices avoid false promises that lead to staff
frustration and subsequent defections. These two are therefore intimately
linked, and yet in many IS departments there is no policy that connects them,
nor are they associated in practice. There needs to be strong integration of
the activities that take place at each stage in the staffing lifecycle.
This lifecycle starts with identifying candidates who have the qualifications to
work successfully in your organisation. The next stage is finding ways to
attract those candidates so they want to join you. These two steps have
become much more important in the current climate of demand exceeding
supply. The third stage is hiring the right people. Many organisations have
had to streamline their procedures to move as fast as the marketplace
requires. The fourth stage is creating an attractive working environment
into which the new recruit will be integrated. Then comes the challenge of
developing productive and committed employees, by attending to their
career development needs. The final stage is managing the process of
leaving your organisation. If done well, this enhances your corporate image
and can prevent defections or encourage good people to return.
Unless these six stages are managed under a single coherent staffing
strategy, there will be disconnects that lead to high turnover rates. Most
companies we spoke to could give us examples: recruiters attracting
people by promising training, for which project leaders would not release
Staffingstrategy
1. Identifying qualifiedcandidates
2. Attracting qualifiedpeople
3. Hiring the rightpeople
6. Managing peoplemoving out
5. Developingproductive andcommittedemployees
4. Creating anattractive workenvironment
A holistic staffing strategy is essential.
If those responsible for recruiting are
not closely coordinated with those
responsible for retention (project
managers, coaches, office managers,
mentors and so on), staff will feel
deceived, frustrated and tempted to
leave. Each step in the staffing
lifecycle must be consistent and
mutually reinforcing.
Attracting and Retaining IS Staff
7Foundation Operational Excellence Report© Computer Sciences Corporation 1998
Staffing logic:Staff are treated as
scarce, critical assets
Sustain relationships
Develop staff
Incorporate employees
Hire better people
Lure hig her-calibre applicants
Broaden candidate search
Lower turnover
Happy, productiveemployees
Staff fit better
Better candidates
Bigger pool
them; human resources hiring staff with the promise of work on new
technology, but systems managers allocating them to long-term projects
on obsolescent platforms; temporarily unassigned staff given
management training to fill vacancies on a booked course, but then no
opportunity to use their newly-acquired skills.
Here, too, corporate attitudes to IS staff are critical. Unless the staffing
strategy is implemented in a favourable corporate environment,
employees will not be convinced that they are valued citizens and will not
become committed and fully productive. The downward spiral described
in the previous section can only be avoided if the business recognises IS as
a core competence, and stops treating IS staff as commodities. Corporate
management must be seen, and felt, to regard IS as a critical asset for
business success, and IS staff as a scarce, valuable resource. With this
mindset, the business will aim to develop and nurture these human assets,
rather than buy and sell them; and make available an appropriate budget
for all stages covered by the staffing strategy.
The result is an upward spiral. IS will be able to broaden the search for
candidates, combatting the scarcity by developing a bigger pool from
which to pick. It will be able to keep the quality up by developing
attractive conditions that will lure high-calibre applicants. It will hire the
better people into an agreeable working environment and incorporate
them successfully into the teams. Its strong emphasis on training and
careers will develop the staff into happy, productive employees, and staff
turnover will steadily reduce. Even when staff leave, IS will take steps to
sustain good relationships with them.
This is much more than good theory – it is the sum of the best practices
we observed in organisations around the world. The following sections
describe examples of best practice in all six stages of the staffing lifecycle.
If corporate policy defines IS as a
critical asset and IS staff as a scarce
resource, the business will provide the
investment that drives an upward
spiral of recruitment and retention
activity, leading to a stable and
productive workforce.
CASE STUDIES
Attracting and Retaining IS Staff
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Become proficient in mining new sources of IS talent
The existing pool of IS talent is becoming over-fished, so many
companies are exploring ways to widen the pool. For example, CSC’s
UK Technical Services Unit, in addition to its regular graduate
recruitment, has set up an apprentice programme for 17- to 18-year-olds
that includes training in core IT skills.
IS departments are recruiting business experts as well as IT experts, to
help absorb the workload. IPC, the UK publishing company,
successfully incorporated marketing and circulation specialists into IS,
where their knowledge of the business has been invaluable.
In the face of the difficulties of recruiting externally, some departments
are seeking out IS talent that is lurking in other areas of the business.
Motorola in the United Kingdom found Degree-qualified employees
working below their professional potential on the manufacturing lines,
and in the last 4 years has taken 12 of them into IS where all but one
have blossomed into loyal and effective members of the team.
The search for Year 2000 and Euro skills is bringing long-retired
programmers back into the field. The father of one CIO told him: “You
never forget Assembler, son!”.
More and more organisations are spreading their nets not just nationally
but globally. IBM, Motorola, Texas Instruments, Oracle and Novell all
have development centres in India, and in 1997 the FI Group, the UK
IT-services company, invested $35 million in a new development centre
in New Delhi. India now produces more computer graduates a year
than the United States. Indian contract rates have become high so
employers are looking yet further afield.
One promising source of staff is the armed forces, where well-qualified
technical people are taking note of military cutbacks and starting to look
for employment elsewhere.
Perhaps the most intriguing source of workers we found is the prison
service. ICL is negotiating with the UK Prisons Authority to employ
prisoners as contractors – one hopes they will not be working on
financial systems!
Many organisations have had to extend their search methods or employ
new ones. They are getting into partnerships with contracting and
search organisations, exploiting new employee-referral schemes,
CASE STUDIES
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developing school and university intern programmes, using best-
employee profiling, starting ‘grow your own’ programmes, setting up
focus groups and searching the Internet.
General Electric Medical Systems (which designs and manufactures
hospital equipment) hires about 500 technical workers a year. It took its
expertise in materials procurement as a model and revamped its
“procurement of the human asset”. It developed a skill-requirement plan
aligned to its multigenerational product plans. Then it started measuring
its recruitment and retention performance using measurements inspired
by manufacturing techniques: “first-pass yield” is the percentage of CVs
received that are invited to interviews; “second-pass yield” is the
percentage of interviews that result in offers. The findings led to three
successful initiatives to improve its recruitment success.
First, the organisation fired all but the 10 best search companies it was
using, and gave those 10 performance targets and bonuses. It also
supported them more fully – for example, with an annual “supplier
week” gathering to help them get to know the company better, and by
faxing explanations when a candidate is rejected to help the recruiter to
learn what is needed.
Next, GE Medical Systems tripled the size of its summer intern
programme with local colleges after discovering that former interns are
twice as likely to accept a job offer as other candidates.
Third, it doubled the number of referrals after discovering that 10 per
cent of employee referrals result in a hire. New employees are asked for
referrals as soon as they join. It gives a gift certificate for each referral
and $2,000 if the referee is hired – $3,000 if he or she is a software
engineer. This may seem a lot, but GE Medical Systems views it in the
context of a headhunter’s fee of $15,000 to $20,000. The revamped
programme has had impressive results. The cost of hiring has been cut
by 17 per cent, the time needed to fill a position by 20 to 30 per cent,
and the percentage of failed new hires has halved.
<http://www.ge.com/medical/>
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The Internet has not yet lived up to its promise as a recruiting tool
The Internet has been hailed as revolutionising the way in which
companies recruit new applicants, particularly new technical talent, but
there is scant evidence to support this. While the Internet seems to have
vast potential as a means to identify and attract technical talent, most IS
departments have done little to exploit its capabilities. Currently, most
IS organisations do no more than post vacancies on the corporate
website. This is inexpensive and easy to do but rarely yields any return,
mainly because few do anything to draw potential candidates to the
website in the first place.
A much more effective approach is to set up an IS department webpage
on the corporate website and structure it as a selling tool. It should
provide candidates with as much relevant information about the
organisation, its technologies, people, projects and culture as possible,
as well as about the jobs on offer. Giving the URL in conventional job
advertisements, and inviting those interested to check out the website,
can then be a very effective way of pre-selecting appropriate candidates.
It will also allow you to monitor the effectiveness of your ads and
discover which aspects of your organisation appeal most to job
candidates. The Texas Instruments casepage 16 shows an especially
creative example of an IS department’s website.
The main job-recruiting sites offer their
services on a subscription basis, but
many sponsors are dissatisfied with
the value they are getting.
<http://www.occ.com>
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A second and rapidly growing use of the Web is job-recruiting sites.
These have sprung up in several countries around the world, but the
majority operate in the United States. Several of these recruiting sites,
such as Online Career Center and CareerWeb focus on recruiting
technical people. They offer searchable databases of candidate CVs,
with the ability to target candidates based on geography and experience,
and trigger electronic-mail alerts when new candidates meeting your
search criteria register with the database. However, many of the
sponsors we spoke with have been disappointed with these services. The
cost per candidate was high, the quality of candidates was mixed and the
number of responses low.
Lastly, very advanced search techniques are now being employed by
specialist organisations to identify individual people over the Internet –
headhunting rather than collecting CVs. The search companies are
becoming adept at broadening the scope of their hunt for candidates.
One we spoke to has developed detective-like techniques for finding
potential candidates on the Internet. It uses a variety of methods to
locate websites and pages that are not publicly listed in directories,
including meta search engines, host and domain commands that reveal
links to home pages, URL peelbacks that lead to lists of employees, and
keyword searches of seminar attendees.
Some headhunting organisations are
prowling the Internet, rather than
merely browsing it.
Tens of thousands of CVs are
available on job-recruiting sites, but
sponsors are often put off by low
quality or lack of focus.
<http://www.careerweb.com>
CASE STUDIES
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Seek new ways of attracting highly-sought-after people
Several companies we spoke to were concerned that staff scarcity would
make it impossible to maintain the high quality of their IS departments.
After all, in times of skills shortage, who will be actively job-hunting?
Probably not the well-qualified. Even redundancy programmes usually
shake out the less skilled and productive. A common complaint was:
“The staff we really want are those who are content and effective in their
current employment”.
In these circumstances, we need new ways to attract such staff and
persuade them to consider moving. Our research found that best
practice in this area consists of four steps: developing a detailed concept
of the characteristics of the particular staff you wish to recruit; finding
unconventional ways to catch the attention of people who are not
actively looking for new opportunities; exploiting communications
channels outside of the normal recruiting process; emphasising the
unique attributes of the organisation.
One way to articulate the characteristics of the ideal candidate is by
developing a profile of a notional ‘best employee’. Analyse the qualities
of the most successful people in the organisation to establish the
attributes they have in common. Then hold focus groups with a sample
of these staff to go deeper into their background, living environment,
interests and leisure activities. Armed with the results, IS can then plan
a focused approach to catching the attention of similar people.
Since the people you seek are probably not job-hunting, you need to
catch their attention using methods other than conventional job adverts.
The best approach chooses outlets that will reach the right sort of
person. Examples we found were ‘alternative’ radio stations, art-house
cinemas, in-flight magazines and off-beat websites. Logica, the UK IS-
services company, advertised on cards inside the underground trains
from Heathrow to central London, where it had set up a ‘drop-in’
centre. By this means, it hired several highly qualified IS staff who were
taking a holiday in the United Kingdom and, intrigued by the
advertisement, stepped into the convenient recruiting centre.
Logica also successfully addressed the third step of making personal
contact with prospective candidates, by having an ‘open house’ every
day, rather than occasional hotel events or recruitment fairs. Other
companies have made special efforts to exploit informal networks such
as sports clubs, alumni meetings and student events. Cisco Systems,
whose efforts are described in detail in the next section, makes its
<http://www.logica.com/>
CASE STUDIES
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presence felt at the leisure events that target candidates are likely to
attend. It has set up a ‘friends programme’ to help prospects get to
know someone working at Cisco, and find out what it feels like to work for
that company.
Emphasising the unique attributes of your organisation, not just the
characteristics of the position, is the final key to attracting staff. A
company in Brighton, United Kingdom, makes a point of including in
its Web-based job advertisements links to other pages that give
information about local schools, sports facilities, housing, transport,
healthcare facilities, museums, cinemas, theatres and local history. This
helps candidates to overcome the natural resistance to relocation. It
cost very little to set up because much of the information was already
furnished on the Web by the local community.
Exploit new employee-referralschemesDevelop school and university internprogrammesPartner with contracting and searchorganisationsDo best employee profileand focus groupsStart ‘grow your own’ programmesMine the Internet
Fit your approach to the people youseekExploit informal networksTake the pain out of job-huntingGo where the talent isEmphasise unique attributes
1. Identifying qualifiedcandidates
2. Attracting qualifiedpeople
Which of these are you pursuing?How could you improve these?
Which new ones might you consider?How would you initiate them?
Use the questions in this graphic as
an agenda for a focus group within
your IS organisation aimed at finding
new sources of IS talent and attracting
them to join you.
<http://www.cisco.com/>
CASE STUDY
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Cisco Systems employs state-of-the-art practices to attract
technical staff
Cisco Systems is a dominant and rapidly-growing provider of end-to-end
networking equipment. The company was named by ComputerWorld in
1996 as the top place to work for IS professionals in North America, and
is renowned as an exciting and attractive employer. Yet the company
continues to pioneer a variety of sophisticated and innovative
techniques to attract and retain top engineering and IS talent in an
industry and geographic region (Silicon Valley) that is as fiercely
competitive for technical talent as any in the world.
Cisco had sales of over $6 billion in fiscal year 1997 and profits reached
$1.4 billion, a 53 per cent increase. To keep pace, it had to double its
workforce in the past 18 months – yet hire only the highest-calibre
people. In each quarter of 1996, it took on more than 1,000 new
employees. Things slowed down in 1997, but the company, now
employing 10,000, remains a voracious hirer.
Targeting prospective job candidates
The secret of Cisco’s success is that the recruiting team identified
exactly the kind of people it wants, devised a customised plan for
finding these highly talented people, figured out how they do their job-
hunting and (most important) changed the hiring process to attract
them. Cisco has also shown a knack for integrating employees of the
many companies it acquires.
According to CEO John Chambers: “Cisco has an overall goal of getting
the top 10 to 15 per cent of people in our industry. Our philosophy is
very simple – if you get the best people in the industry to fit into your
culture and you motivate them properly, then you’re going to be an
industry leader.” Cisco’s recruiters target what they call passive job-
seekers – people who are happy and successful where they are. Says
Barbara Beck, Cisco’s vice president for human resources: “The top 10
per cent are not typically found in the first round of lay-offs from other
companies, and they usually are not cruising through the want ads”.
Catching their attention
Cisco learnt how to lure the people it wanted. It began by holding focus
groups with ideal recruitment targets, such as competitors’ senior
engineers and marketing professionals, to find out how they spend their
free time (lots of movies), what websites they visit (Dilbert Zone is
popular), and how they feel about job-hunting (they hate it).
<http://www.cisco.com/>
CASE STUDY
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Then it applied this knowledge. Cisco reaches potential applicants
through a variety of routes not usually associated with recruiting, such as
art fairs and home-brewing festivals. Silicon Valley’s annual home and
garden show has been a particularly fruitful venue. The first-time
homebuyers the event attracts are often young achievers at successful
technology companies. Cisco recruiters work the crowd, collecting
business cards from prospects and speaking with them informally about
their careers.
Cisco also uses newspaper advertisements creatively. Rather than listing
specific vacancies, the ads feature Cisco’s website address. There, it can
inexpensively post hundreds of job openings and lots of information
about each one. The company also advertises its site in cyberspace to
reach a self-selected set of candidates – Internet users – worldwide. On
the Web, it can easily monitor and measure important aspects of its
recruiting programmes, such as the number of visits to the site, and
where prospects work (because most visit Cisco’s website while at work).
Thus, Cisco knows exactly which companies and groups it is reaching.
Exploiting new communication channels
Cisco developed its ‘friends programme’ after a focus group asked
happily employed people how they could be enticed to interview for a
job. Someone said: “I’d do it if I had a friend who told me she had a
better opportunity at Cisco than I have at my current employer”. A
thousand Cisco employees have volunteered to be ‘friends’, attracted by
a generous referral fee (starting at $500) and a lottery ticket for a free
trip to Hawaii for each prospect they befriend who is ultimately hired.
Although the programme is advertised only in local cinemas, Cisco
receives 100 to 150 requests each week from applicants wishing to be
introduced to a friend at Cisco. The scheme matches them to
employees with similar background and skills, who call them to talk
informally about life at the company. About a third of new recruits now
come through the friends programme.
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The Texas Instruments website provides job-seekers with career-
planning and assessment tools
Texas Instruments lists far more than job openings on its website. It also
provides tools and a wealth of information to help entry-level candidates
to plan their careers and assess how well they would fit into TI’s culture
and work environment.
Engineer Your Career™ is a creative career-planning tool that takes
candidates step by step through key activities in the career-assessment
and -planning process, online. It provides exercises and information to
help job-seekers assess the job market and their career prospects,
develop a strong CV and plan for marketing themselves, search more
effectively for job opportunities, improve their interviewing techniques,
and learn how to ensure success in a new job.
Texas Instruments has gone well beyond
standard recruitment material to offer a
free career-development service.
<http://www.ti.com/recruit/docs/eyc.htm>
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‘Fit Check’ assists candidates in determining if TI’s environment and work
content suits their wants and needs. It asks them to rate 32 different
statements about aspects of a job. The data is input online, processed and
then results are fed back immediately to the candidate.
Texas Instruments’ efforts to assist job-seekers gain it respect in the
marketplace, and informal comments about it can attract those who
would not otherwise be looking for a job.
Texas Instruments’ ‘Fit Check’ feature allows
job-seekers to assess themselves,
confidentially, for alignment with TI’s culture.
<http://www.ti.com/recruit/docs/fitcheck.htm>
CASE STUDIES
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Reengineer the hiring process for speed and cultural fit
A well-developed staffing strategy includes a policy of hiring for long-term
fit rather than short-term need. Organisations that do this base their
recruitment programmes on building the skills required to fulfil the
corporate plans and the related IS plans. A skills analysis shows where
the gaps are and the recruitment plans are devised to close the known
gaps and staff up for estimated future requirements. Apart from urgent
short-term needs, they try to avoid recruiting for a narrow set of skills.
For example, one of the major UK banks recruits into an IS resource
pool of 1,200 staff. Each year, it hires around 40 graduates and gives
them 3 months’ induction training. It cannot specify in detail the
particular job that any recruit will be working on, as it does not know
how and when staff will be deployed from the pool. Likewise, Champion
International, the US paper corporation, has 250 IS staff and does not
recruit for specific positions. Instead, it tries to hire the best people
available then fit them into the most appropriate position. Because of
this policy, Champion’s main hiring emphasis is on cross-functional
teamworking experience and skills, not on technical expertise.
Many organisations are reviewing their recruitment process in order to
speed it up, because good candidates are snapped up fast. One study
estimated that the average IS candidate is ‘on the market’ for only two to
five days. At Champion International, the recruiter vets the CVs,
forwards the good ones to a telephone screen team of IT project
managers, and advises the candidates of their status. Those who pass the
telephone interview are invited to onsite interviews with up to six
members of the IS department. Champion deliberately involves many of
its IS staff in the recruiting process in order to improve the chances that
candidates will fit into its culture, and to make the hiring process faster.
It can be completed in just a few days.
Involving many IS people in the recruitment process is generally good
practice. A US energy company assigns a mix of different IS people to
interview new candidates. First, it sends selected IS staff to a ‘new
employee interview training session’ to ensure they are competent to
participate. This formal one-day seminar teaches interviewers about
hiring strategy, interview techniques and areas to focus on. The
behavioural and critical thinking skills parts of the interview approach
were developed with the help of an external consultant, and are based
on the belief that previous behaviours and experiences are the best
indicators/predictors of future behaviour. So, candidates are asked a
series of questions related to real-life situations, such as “Give an
<http://www.championpaper.com/>
CASE STUDIES
Attracting and Retaining IS Staff
19Foundation Operational Excellence Report© Computer Sciences Corporation 1998
example of a situation where you had to hold back from speaking
because you didn’t have enough information about a problem”, or
“Which was the toughest group or individual for you to get cooperation
from and how did you handle it?”.
The emphasis on ‘soft’ skills is well illustrated by the best-employee
profiling used at Yahoo!, the Internet software company. It identifies the
key attributes of successful employees and incorporates them explicitly into
the hiring process. A Yahoo! spokesperson said: “We will not add new staff
unless they make the grade on the four attributes of great Yahoo! people”.
One of these is interpersonal skills because, with the company’s fast
growth, any person it hires will soon be responsible for managing others.
Another, related to the corporate culture, is passion for life – people who
are passionate about their subject area, but who also have a passion for
something specific in sports, arts or culture. This brings a broader
perspective to their work. The third is what it calls ‘zoom in, zoom out’.
“We need people who can get so tactical it hurts – who can do the blocking
and tackling to make a project happen. That’s ‘zooming in’. But these
same people also have to ‘zoom out’ – to look at the big picture.” Finally,
Yahoo! looks for spheres of influence – people who have their own
shortlists of great talent and can recommend good candidates.
When candidates are rejected, it is important to give them open and
honest feedback about why they are rejected, and give them counselling
to help them in their future job-seeking. The candidate will form a good
impression of the organisation, which will enhance its reputation in the
marketplace, and the organisation will benefit from the candidate’s
honest feedback, which will add value to the hiring process. This is
particularly important when the candidates are personal referrals.
http://www.yahoo.com/
CASE STUDY
Attracting and Retaining IS Staff
20Foundation Operational Excellence Report
© Computer Sciences Corporation 1998
IPC’s Assessment Centre gives both speed and depth to its
hiring process
The IS department of IPC, the UK magazine-publishing company, has
had good results from its Assessment Centre recruiting method. A
recruiting agent vets CVs and sorts out suitable candidates by interview,
then sends them to a full-day offsite to do a series of exercises and
mingle with the management team. The exercises test problem-solving,
presentation, team dynamics and personality. Groups of about 10
candidates are given a business problem to solve (for example, choose
the best of three options for relocating an office) and present their
solution to ‘management’. They then have a leaderless discussion
around a table about a scenario that is presented to them. After that,
there is a standard personality test, and an interview with two of the IPC
management team. When the day is over, the IPC and recruiting agency
staff discuss the candidates and classify them as Green (direct offer),
Amber (may do second interview) and Red (out). The recruiting
agency, who has been present throughout the day, then makes the offers
and debriefs the losers. The IT director of IPC participates in these
days. One of the reasons that people want to join IPC is the impact of
meeting the IT director, who is a good leader and maintains a high
profile both inside and outside the company.
The first Assessment Centre was not too successful, as three of the
accepted candidates left soon after joining because they did not ‘gel’
with the IPC team. IPC adjusted the focus of the assessment day to
emphasise the cultural side of things rather than the technical, and
recruits from subsequent Assessment Centres have all stayed.
When hired, the candidates go on an induction course, organised by a
corporate human resources member dedicated to central services
training and development. After a “Welcome to IPC” and a “Welcome
to IS”, two further courses are run in-house by an external training
company but customised for the IPC environment. These are
“Introduction to IT”, focused on the platforms that IPC uses, and
“Business Analysis”, also adapted to the IPC environment. This
demonstrates to recruits that the company is interested in providing
proper training and goes to the trouble of tailoring the courses.
To help retention, IPC is thinking of setting up a Development Centre
along the same lines as the Assessment Centre, but focused on the real
situation and the prospective promotion prospects of the participants.
The concept came from IPC’s advertising department who uses it to
hone the skills of high-flying sales executives. IS intends to use it for the
majority of the staff, not just for the chosen few.
Use the matrix of staff types against skills
as an exercise for a focus group within
your IS organisation aimed at raising the
awareness of HR staff, and IS staff
involved in recruitment, by identifying the
key skills appropriate to the different roles
in IS. The selection of staff types can be
extended to include those that are critical
to your organisation.
<http://www.ipc.co.uk/>
Attracting and Retaining IS Staff
21Foundation Operational Excellence Report© Computer Sciences Corporation 1998
The value of ‘ABC analysis’
The cases we have cited all emphasise the shift of focus in recruiting
from applied skills, needed for the short term, to behavioural and
cognitive skills, needed to adapt and grow as the IS department develops
and changes. As an aide-memoire to the differences in these types of skill,
we show below the examples that we quoted in a previous report,
Reskilling IS, incorporated in a matrix that can be used in an in-house
workshop to sensitise human-resources staff, and IS staff involved in
recruitment, to the different classes of skill required by different types of
IS work. Applied skills are the ones that are put on the CV; they are
usually product-focused, such as Visual Basic skills. They are the most
easily taught. Behavioural skills describe how a person acts and are
learned early in life; examples are action orientation, or being very
interpersonal. Behavioural skills are learned, therefore they can be
taught (but are more difficult to teach than applied skills). Cognitive
skills describe how a person thinks; many believe that these skills are
largely innate, therefore cannot be taught. This being the case, it makes
sense to make hiring decisions based largely on the candidate’s cognitive
and behavioural skills, and teach any missing applied skills later.
Examples
Examples
Examples
ExamplesConsultation
Systems integrationPrototypingModellingSimulation
Project managementBusiness knowledge
Object orientationTechnical fluency
ExamplesResults orientation
Risk toleranceResourcefulnessSelf-confidence
Thoroughness andfollow-through
VersatilityHigh energyCollaboration
HumilityArticulateness
ExamplesSystems thinkingProcess thinking
AbstractionInvention
LogicLateral thinking
Pattern recognitionSynthesisCuriosity
Anticipation
AA pplied skills BB ehavioural skills CCognitive skills
Networkmanager
Chiefarchitect
Helpdesksupport
Attracting and Retaining IS Staff
22Foundation Operational Excellence Report
© Computer Sciences Corporation 1998
Provide interesting work, as well as flexible work arrangements
Once the right staff have been recruited, three factors affect retention –
the work itself, the work environment and compensation. In the
following sections, we deal with each of these in turn.
Interesting and intrinsically rewarding work is the most powerful
determinant of whether people stay in a job or leave. Most IS staff find
that the ‘buzz’ they get from doing exciting work far outweighs perks
like a casual dress code. A boring, unfulfilling job is still a boring,
unfulfilling job no matter when you do it or what you wear. Yet we
found in our research that many organisations are taking steps to
improve the work environment, but paying little attention to making the
work itself interesting.
One way to increase the level of excitement is to make IS systems and
services as integral to the business as possible. This gives staff the
feeling that their work will make a real impact on the success of the
organisation. IS management should also work at creating excitement
around projects. In our recent report, Breaking the Rules of Systems
Delivery, we showed how the key to success in a ‘skunkworks’ project was
exceptional leadership that could fire up the team by clear and frequent
articulation of the mission, backed by visible enthusiasm from the
sponsor. In the inevitable cases where the project cannot be depicted as
other than boring but necessary, IS management should ensure that
staff are rotated out of the project within a reasonable time, and moved
to a high-profile one.
Another strong motivator to stay is the availability of a range of interesting
technology platforms. (Larger corporations reported that this was also a
potent factor in attracting candidates.) Even if its range of technology is
stable and not leading-edge, IS should organise the allocation to projects
so that all members of the department have the opportunity to work with
all the available technology. With a few exceptions – and these people will
be less and less useful in the fast-changing future – IS staff are eager to
extend their technological skill base. ‘Pigeon-holing’ staff may make
management’s task easier, but it dampens employees’ enthusiasm.
IS people want to feel that they are contributing directly to the success
of the business, that they are part of the line, and not in a staff-support
role. One way to accomplish this is to create special units in IS, focused
on exciting business-critical areas. Another approach is to operate IS as
a standalone business.
CASE STUDIES
Attracting and Retaining IS Staff
23Foundation Operational Excellence Report© Computer Sciences Corporation 1998
Rabofacet Spectrum has created a dynamic, developing environment
Rabofacet is the shared-services company of Rabobank, a Dutch banking
cooperative, and Spectrum is its IT service unit, with 350 staff. Its policy is to
attract people looking for interesting and exciting work and opportunities
for career development and learning, rather than those primarily interested
in money. Spectrum places a strong emphasis on providing alternative work
options. Staff are encouraged to work on different projects and in different
areas of the business. For example, a senior-level ‘expert’ may work as a
junior on a project outside his area of expertise.
IT is managed by Pierre van Hedel, whose vision for Spectrum is to make
it an IS innovation and knowledge centre in which people are rotated in
and out of other parts of the business. He wants the staff to become
more comfortable with trying new things and taking risks. He accepts
that not all projects will succeed, but hopes to achieve a 70 per cent
success rate. He is constantly seeking ways to broaden people’s skills and
experience. For example, he wants his staff to be externally focused, and
so encourages them to attend conferences and training courses.
Union Fenosa ACEX has created an exciting and unique place for
IS professionals to work
Union Fenosa ACEX is a profit-making subsidiary of an electrical utility
in Spain and provides systems and consultancy to both internal and
external clients. It supplies new processes and advanced systems for its
own electricity business, then exports them to many countries around the
world. In this environment, the staff find exciting opportunities to work
on leading-edge applications and international projects. They feel
themselves to be in line (rather than staff) positions with direct
responsibility for the profitability of the enterprise. There are numerous
opportunities for career progression either vertically (up to
management) or horizontally (across to a new technology or another
country), and promotion is mostly from within. The company has
maintained a low staff turnover, while consistently hiring new staff away
from large consultancies and IT service providers.
In both these cases, the job itself and the environment in which it is
performed have been designed to give staff more freedom in, and
control over, the work they do, how it is done, and the reward received
for doing it well.
<http://www.ufacex.com/>
CASE STUDIES
Attracting and Retaining IS Staff
24Foundation Operational Excellence Report
© Computer Sciences Corporation 1998
Make the work environment exciting and agreeable
The work environment is receiving a lot of attention at the moment as
companies vie to retain employees in a sellers’ market. The best
environments combine comfort and flexibility with an exciting
atmosphere. Excitement is engendered principally by the enthusiasm
and visibility of senior management. A remote management team often
creates a feeling of aimlessness, which can push people to move to a job
where they feel that what they are doing matters. We found that
physical comfort (lighting, heating, decor, storage space, desks and
chairs) has to be at an acceptable level, but in itself will not persuade
people to stay. What really counts is that staff feel that the work
environment is organised to treat them as individuals.
For example, Cisco Systems has set up a special initiative, called ‘Fast
Start’, to ensure that staff feel important from the first day. Employee
surveys at Cisco had shown that some new hires felt like lost baggage
rather than the company’s most precious asset. Their telephones didn’t
work, they had computers but no software, they had software but no idea
how to use it, or it took two weeks to get an email address. Today,
computer software tracks the hiring process and alerts facilities teams
just before a new recruit arrives. As a result, every new employee starts
with a fully functional workspace and a full day of training in desktop
tools. In addition, each new hire gets assigned a “buddy” (a peer in the
company) who answers questions about how Cisco works.
Flexible working hours appeal to individuals who have social or travel
reasons to appreciate the opportunity to choose their hours of work.
Flexitime arrangements are now fairly common, but some companies
are taking this a step further. ISCOR, the South African steel company,
introduced flexitime in 1995 and in 1997 started also offering full
employment contracts based on 5, 6 or 7 hours per day, with salary
adjusted down from the standard 8-hours-per-day contract. Overtime is
paid at the adjusted base rate during the normal working day, so that a
6-hour person does not earn more than a regular 8-hour person. The
number of employees who have taken up these contracts so far (20 out
of 400) shows there is a genuine need for more flexibility, and the
company is responding.
Telecommuting is another option that has great appeal to some people.
Many organisations are providing this in a small way, often on a pilot
basis. Other organisations have been considering it, but have still to see
their way around the disadvantages, struggling with one or more of the
following issues – economic justification, management resistance,
<http://www.cisco.com/>
<http://www.iscor.co.za/>
CASE STUDIES
Attracting and Retaining IS Staff
25Foundation Operational Excellence Report© Computer Sciences Corporation 1998
inadequate technical support, culture shock, and reduced personal
contact. Some companies are moving into telecommuting in a big way,
as illustrated by the case of Merrill Lynch.page 26
Forums and social events are other ways to engage staff. IBM in Ireland
finds that employees much appreciate the forums that it runs several
times a year. About 60 staff are invited to a relaxed, casual-dress offsite
meeting at which the senior management team explains its strategies
and answers questions in a free and open discussion that is continued
over a buffet lunch. Staff get the feeling that they participate in the
direction of the company and have an opportunity to put forward ideas,
and management gets input on the concerns of the workforce. In
addition, the organisation arranges quarterly get-togethers for around
200 staff on a Friday at 3 pm with live music and refreshments in the
reception area of one of their buildings. Employees enjoy the
intermingling with staff from other projects, which reinforces the
feeling of being in a community of like-minded people.
Most organisations are taking steps to
improve their work environment. This
has to be a continuing endeavour,
because each innovation soon
becomes the expected norm for
candidates.
Self-managed teams
Allowing employees to consult/work with other companies
Time off for study or community service
Sabbaticals
Satellite offices
Part-time positions
Compressed/shortened work weeks
Flexible work times
Examples of alternative work options and environment improvements citedby sponsors include:
Telecommuting
Job-sharing
Casual dress
Contracts for those who want them (to get them on a par with outside contractors)
<http://www.ie.ibm.com/>
CASE STUDIES
Attracting and Retaining IS Staff
26Foundation Operational Excellence Report
© Computer Sciences Corporation 1998
Investment in the work environment helps retain staff
The following cases are of two companies that have invested heavily in
the work environment. In both cases, they believe that their ability to
recruit and retain the staff they want is ample justification for their efforts.
SAS Institute spares nothing to make staff happy
One company that has made serious efforts to provide an ideal work
environment for its staff is SAS Institute. It is the largest private software
company in the world, providing a range of products to capture, store,
manipulate, analyse and present information. It started with statistical
tools but is now heavily into data warehousing, data mining and
executive information systems. James Goodknight, the CEO, built the
company up to its current $700 million status. His staff are renowned
for their loyalty, which is stimulated by the extraordinarily generous and
inventive suite of benefits that he has provided. For example, there is a
heavily subsidised cafeteria that is enhanced by live piano music. There
is a fitness centre that also provides a free laundry service. There are two
subsidised childcare centres on the 200-acre campus. There is a free
health centre that is staffed by two doctors and six nurses, and which
includes a bank of massage rooms for ‘stress therapy’. There is a full-
time ergonomics specialist who helps new employees choose furnishings.
There is even an artist-in-residence who paints pictures to hang in the
19 buildings on the campus.
Clearly, SAS Institute spares nothing to make its staff happy. It also
demands productivity and results in return. James Goodknight justifies
the range of benefits by saying: “I like to be around happy people, but if
they don’t get that next release out, they’re not going to be very happy”.
Many organisations would regard SAS Institute as having gone well over
the top in providing a comfortable working environment, were it not for
the impressive staff retention it achieves. The annual turnover rate is
less than 5 per cent, compared with more than 20 per cent for the
industry as a whole.
Merrill Lynch introduced telecommuting to help it become the
‘employer of choice’
Merrill Lynch, the financial-services corporation, is an interesting case of
an organisation that sees telecommuting as a key factor in staff
retention. Three years ago, the company launched a programme that
aims to have 450 employees telecommuting by the end of 1998. “We
didn’t care about cutting costs,” said Chief Technology Officer and
<http://www.SAS.com/>
<http://www.ml.com/>
CASE STUDY
Attracting and Retaining IS Staff
27Foundation Operational Excellence Report© Computer Sciences Corporation 1998
Senior Vice President Howard Sorgen, “our goal was to promote loyalty
and productivity, and make Merrill Lynch the most appealing IS
employer in the market. In order to become the employer of choice, we
had to consider all the things we could be doing above and beyond what
we had in place today to give us the edge over the competition. One of
them was telecommuting.” The venture was estimated to cost $500,000
upfront and $3,000 per year thereafter for each employee. After nine
months of debate, it was agreed that the cost of continually losing IS
staff could be even higher. If the programme could stop the IS
revolving door, it would be much more than an employee perk.
The company established rules and processes to govern work away from
the office. Employees cannot telecommute until they have been with a
new project for 90 days, and are then required to go to the workplace at
least once a week to maintain face-to-face contact with team leaders. Once
employees have decided to telecommute, both they and their managers
must attend a day-long training programme. Employees then spend two
weeks in a telecommuting simulation lab at Merrill Lynch. They
communicate with their managers as if they were already telecommuting,
and prepare themselves for constant distractions by sitting at desks next to
windows overlooking a busy street. Home workspaces are inspected for
safety and suitability. For example, a poorly-lit office next to the washing
machine would fail inspection. Merrill Lynch supplies the computers, but
employees must buy their own home-office furniture (at a group discount
rate). A five-person IT support group is dedicated to solving problems for
remote workers from 7 am until 7 pm on weekdays. The support staff also
carry beepers for out-of-hours problems.
Three years after its inception, employee satisfaction is up 30 per cent,
according to annual in-house satisfaction surveys. The programme has
also enabled the company to hold on to several star employees,
including a woman who telecommuted from Russia for several months
while she was there to adopt a baby. Another valued employee
relocated from New Jersey to Florida and now telecommutes five days a
week, visiting the office once a quarter. Says Sorgen: “It’s a tremendous
retention tool and a phenomenal recruiting tool”.
CASE STUDY
Attracting and Retaining IS Staff
28Foundation Operational Excellence Report
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Change compensation practices to combat the drift to freelancing
Fast-rising remuneration, both for in-house and contract staff, is a matter
of deep concern to IS management. Many organisations told us that
they have to uncouple IS salaries from corporate policies or industry
averages and relate them more closely to the market. The standard pay-
rate surveys are not published frequently enough to keep pace with
some of the ‘hot’ skills, so many organisations are commissioning special
market surveys on a consultancy basis, and communicating informally
with other organisations in their locality.
We recommend three actions:
Almost all organisations see some of their best staff leave to go
contracting. Take avoiding action: get a thorough knowledge of
your local market, the going rates, conditions, opportunities and
likelihood that demand will continue; then discuss contracting with
your staff and use this information to counter its attractions.
Carry out staff-satisfaction surveys. Staff will always be impressed that
you want to improve their welfare. Invite their input on the contents
of the survey, run it seriously and use the results as a basis for forums
where working conditions and pay can be freely and frankly discussed.
Get in-house staff onto competitive pay scales. Business managers are
becoming more aware of how vital IT is to their businesses. Prepare a
well-argued case, based on market research, for competitive pay scales
for IS staff, including some exceptional remuneration for exceptional
people (as occurs regularly in the business world).
A financial-services company in the City of London made an active effort
to stem the outflow to contracting. The staffing problem is always acute
in the City where there is much competition for competent staff. The
market is hot – some staff get two to three calls from headhunters per
week. In this company, the CIO cannot find enough analysts with
quality skills, and recently the situation has become even more difficult
as increasing numbers of staff have left to become contractors, attracted
by the possibility of doubling their pay.
The CIO managed to plug this drain on resources. He carried out and
published an analysis of the true difference between contractors’ and in-
house remuneration. He proved that, despite appearances, contractors
only cost the company 10 per cent more than permanent staff and so
persuaded the CEO to allow a 10 per cent increase to permanent staff in
CASE STUDY
Attracting and Retaining IS Staff
29Foundation Operational Excellence Report© Computer Sciences Corporation 1998
order to reduce the drift to contracting. The CEO agreed that 10 per
cent was a reasonable sum to pay for continuity of employment (saving
the costs of training, learning the culture, knowing the systems and
being known to the users).
The calculation is as follows. The base salary of an in-house analyst is
£34,500, on top of which the company has to pay 54 per cent in benefits
and 10 per cent in annual bonus – a total cost of £56,480. An equivalent
contractor’s fee would be £64,400. Although the in-house analyst pays 30
per cent in taxes, he benefits from the company’s non-contributory
pension scheme. The contractor must pay at least 25 per cent in tax and
has to buy his own pension, which effectively cuts his pay to £42,000. Thus
a permanent employee would increase his take-home pay by only 25 per
cent by becoming a contractor – very different to the popular myth that
you can double your pay by going freelance. This calculation has been a
powerful argument in dissuading staff from switching to contracting.
The same CIO has also done a survey of staff attitudes to benefits. The
results are shown below.
On the basis of these survey results, he recommended selected pay
reviews (based on the 10 per cent pay rise described above), market
supplement (tied to market-rate movements and adjusted every six
months) and share options. Although these were rated low by his staff,
he thought they did not appreciate their value and would be grateful
later. He attributed the low rating to general distrust of corporate
management. There have been many mergers and acquisitions in the
City of London and this, together with the downsizing culture of recent
years, has led to a general attitude of cynicism amongst employees. This
is common, not just in this company, but in IS departments throughout
the world. It will need several years of relative stability to generate a
more positive view of continuity of employment.
Market supplement
Work from home
Contract conversion option
Company car
Loyalty bonus
Pay for all overtime
Y2000 golden handcuffs
Training allowance
Share options
Attractiveness
High/medium
High/medium
High/medium
Medium
Medium
Medium/low
Low
Low
Low
CASE STUDIES
Attracting and Retaining IS Staff
30Foundation Operational Excellence Report
© Computer Sciences Corporation 1998
Make compensation and reward policies dynamic and flexible
Many IS departments are moving from remuneration systems based on
narrow salary grades to those based on broad salary bands. Traditional
grades are directly linked to job classification, and staff must be promoted
to the next grade to gain higher compensation. This is suitable for
hierarchic organisations, but has been found to be too rigid for IS
departments. Salary bands that are broader and can encompass multiple
roles and jobs provide the flexibility to compensate staff for the changing
roles, responsibilities and performance criteria that typify IS activities.
When the IS department of a major UK bank re-organised two years ago,
it simplified its grading structure into just three bands: P1 = Trainee,
P2 = Developers, Project Managers, Consultants or Technical Specialists,
and MCS1 = Managers. Most of its 1,200 staff are in P2. A minority of
staff who want their status to be recognised are pressuring human
resources to split P2 into sub-bands. So far it has resisted this, as it is
convinced that the broad band structure gives the flexibility that is
needed to deal with the wide and changing range of skills and
aspirations of IS staff. As a response to the pressure, HR is preparing a
career development plan that maps the many different paths that can be
followed to progress from P2 to MCS1.
Another way to improve staff retention is to organise remuneration such
that staff receive pay increases more than once a year. One company in
the City of London pays something extra every three months – the
annual increase, a share scheme addition, a half-yearly increment and a
performance bonus. This makes some potential leavers hesitate before
committing to a new employer.
Our research led us to the conclusion that loyalty bonuses are often
ineffective, because a keen future new employer will offer to match the
bonus – and pay it straight away. That said, loyalty bonuses will restrain
some staff from actively seeking opportunities elsewhere.
An interesting case of the use of bonuses is the UK Post Office IT Services
that has 1,450 IS staff. Staff turnover has grown from 3-4 per cent 5 years
ago to 11 per cent in 1997. The problem is not so much the overall
turnover, but the very high turnover in key skill areas – for example,
18-19 per cent in SAP skills. In March 1997, IT Services developed a
radical retention strategy with two parts – financial and non-financial.
The financial retention strategy identified three groups of employees
who required special attention:
<http://www.postoffice.co.uk/>
CASE STUDIES
Attracting and Retaining IS Staff
31Foundation Operational Excellence Report© Computer Sciences Corporation 1998
Employeeincentive
profile
Jobresponsi-
bilities
Higher priority
Lower priority
Specialperks
Higher priority
Lower priority
Additionaltraining
Higher priority
Lower priority
Flexiblework
options
Higher priority
Lower priority
Specialbonus
Higher priority
Lower priority
Employeeincentive
profile
Additionalpay
Higher priority
Lower priority
MaxSmith
SarahTaylor
Vitally important employees who were already paid 20 per cent over
market rates. It was decided that about 30 of these were worth even
more, so their pay was upped to 40 per cent over market rates.
Good employees who were not key but could cause serious disruption
if many of them left at the same time. They gave 100 of these a
loyalty bonus spread over two years.
Employees working on business-critical projects, including Year 2000
and new product launches. They identified 42 of these who were not
in scheme 1 or 2, and will pay them a bonus of 59 per cent of salary if
they are still on the payroll at 1 June 2000.
These three schemes have been effective in reducing turnover of
key employees.
To get authorisation for these increases and bonuses, IT Services
prepared a full business case, including actual staff turnover, forecast
turnover, cost of recruitment, cost of retraining, effect on ability to
deliver (for example, in the case of SAP it is impossible to get new
people if they lose some – there are none on the market), and a risk
assessment for doing nothing or for taking the proposed steps.
The non-financial retention strategy involves the development of a
“Psychological Contract”. It is based on the ‘cafeteria-style’ benefits
concept that allows individual employees to tailor the job, expectations,
and rewards and benefits they receive. In effect, the employee would
sign a document stating ‘I accept a salary of $xxxxx in exchange for the
following benefits’. The benefits would include: company investment
in staff development (currently five days minimum per year), pension
scheme, accommodation and personal technology, flexible working
hours, special leave (for example, to study), limit to time away from
home, travel conditions, lone-parent facilities, physical security, casual
dress and home-working. In addition to basic pay and benefits, they
would offer a package of “points” for different job categories that could
be used in any combination that an employee desires.
Each employee will respond to a
different mix of incentives. Job
satisfaction is improved if individuals
are given the opportunity to select
from a range of benefits the ones that
most inspire them.
CASE STUDIES
Attracting and Retaining IS Staff
32Foundation Operational Excellence Report
© Computer Sciences Corporation 1998
If “people are your greatest assets”, treat them that way
Loyalty and commitment are reciprocal in nature. If “people are your
greatest assets”, treat them that way. IS departments with good retention
records show commitment through their behaviour and actions, not
rhetoric. They give their staff decision authority, provide a work
environment that can be tailored to the lifestyle they seek, and put in a
career development, learning and reskilling process to demonstrate how
much value they really do place in them. A flat organisation that allows
horizontal as well as vertical career paths provides the context within
which individual staff can plan to move forward at a pace that suits them.
The most effective mechanisms for developing skills, fostering learning
and demonstrating to staff that you are committed to them are Centres of
Excellence and Coaches. Centres are groups of people, typically
organised according to a basic competence such as architecture or project
management, who are hired, trained, allocated to projects, evaluated and
nurtured by professional Coaches. Foundation has reported previously on
Centres and Coaches in Reskilling IS and New IS Leaders.
Texas Instruments has employed Centres of Excellence for skills
development and resource deployment since 1992. Centres were
implemented in three phases for a total of about 1,400 people across six
locations. They identified 17 distinct skill sets (for example, Software
QA, Business Process Engineers, Network Operators, Leaders,
Contractors), and coaches are experts in the centres they are affiliated
with. Coaches perform career planning, counselling, mentoring,
resource deployment, performance assessment, work process
development and future skills analysis. Among other quantified
benefits, IT has cut its contractor ratio to 5 per cent (people are trained
in-house for highly skilled technical work). Staff have “a heightened
sense of professionalism, and ownership of their own learning”.
Rabofacet Spectrum, the IS unit of a Dutch banking cooperative whose
work environment we described earlier,page 23 is organised into
competency clusters aligned with the hot skill sets needed to complete
high-impact projects. There are currently 17 centres, including business
consulting, software, knowledge management, Internet, applied maths,
management-support systems, multimedia, the usability lab and
development tools. These competency centres were chosen to reflect
the emerging technologies and applications that fit the needs and
direction of their bank clients. Cluster coordinators find inventive ways
to develop staff skills. For example, they will partner with a vendor or do
a joint venture with another company that will enable people to work
<http://www.ti.com/>
CASE STUDIES
Attracting and Retaining IS Staff
33Foundation Operational Excellence Report© Computer Sciences Corporation 1998
with new technologies. Staff are also encouraged to develop new
clusters. For example, one staff member began setting up technology
seminars for customers of one of the business units and has now turned
this into a new competency within Spectrum. Spectrum is growing
rapidly to meet the great demand for its services, and receives CVs from
all over the Netherlands from people who have heard of the challenging
and exciting work it does.
Ken Taylor, who has HR responsibility for the UK Post Office IT
Services,page 30 believes that one of the most important factors affecting
retention is the opportunity for learning and career development. Skills
centres were instituted about three years ago and address areas such as
project management, networking, HR and technical consulting. Staff are
encouraged to select the skills centre they wish to be affiliated with. This
approach was introduced along with personal development plans for each
individual employee, produced jointly by the skills-centre heads and the
individual workers. Taylor believes these initiatives have helped to stem
the staff turnover rate and also helped recruiting efforts. People want the
opportunity to grow and learn through both formal education and
training, and on the job experience. Taylor believes that the greatest
security he can offer his staff is marketable skills. He wants to ensure that
they do not have to leave the Post Office in order to update their skills.
These are three among many organisations that are pursuing the policy
of investing in long-term career development, not episodic training, and
reaping the benefit of improved retention.
Quality ofjob
‘Great’
‘Lousy’
CompensationPoor Good
‘OK’ line
‘Get stuffed!’ line
Source: Ken Taylor, Director, People and Resources Group,The Post Office IT Services
Ken Taylor, Director, People and
Resources Group, The Post Office IT
Services expressed the trade-off
between quality of job and
compensation in the form of a chart.
An interesting job will make up for poor
compensation, and vice versa, but if
employees feel that they are below the
diagonal line, they will become
restless; if below the ‘Get stuffed!’ line
they will leave.
<http://www.postoffice.co.uk/ >
CASE STUDY
Attracting and Retaining IS Staff
34Foundation Operational Excellence Report
© Computer Sciences Corporation 1998
Encourage staff to take responsibility for their own
career development
Many of the recent developments in HR – centres of excellence,
coaches, mentors, 360º appraisals, ‘cafeteria-style’ work options – are
moving in the direction of encouraging people to manage their own
careers. Most IS staff welcome this change. Many had seen contracting
as the only way to exercise greater autonomy.
IBM is engineering a culture change towards a more mature
relationship between manager and employee, promoting the concept
that “your career is your future – you manage it with IBM’s support”.
This is based on “Professions” (such as Project Management, IT
Architect and IT Specialist) that have graded levels of expertise
modelled on the traditional professions such as solicitors and
accountants. Within each profession there are “disciplines” (for
example, an IT architect could be a network architect, an applications
architect, a systems architect or a systems management architect) and at
each level there is an established set of skills (both ‘soft’, such as
customer relations, and ‘hard’, such as DB2). This structure provides
standards of attainment in each skill type against which employees can
gauge their development.
To help them, there is a “Career Route Map” that demonstrates the
development steps along a chosen path, which could be through a
particular profession, or between professions. There is also the
“Personal Portfolio” in the form of a book, designed to help employees
manage their own careers. The portfolio provides a framework for
individuals to collate their career experience and share it. It includes
objectives, development plan, achievements and so on, and serves two
main purposes: in discussions with the business to decide a person’s
suitability for a particular position and to make the business aware of
that person’s aspirations and training needs, and in peer review of a
person’s status in his Profession.
“Institutes” are skill-development events specific to a profession, and
provide a way of connecting the individual to the skill community to
which he/she belongs. It is particularly useful when a person loses sight
of their community when buried in project work. The idea is to
encourage staff to share the intellectual capital they have developed.
Groups of staff in the same skill area are brought together for three days
once a year in a university, and present papers. A competition for the
best ideas is judged by peers. In addition, local Institute meetings are
held every quarter. The advantage to staff is that they get to know each
<http://www.ibm.com/>
CASE STUDIES
Attracting and Retaining IS Staff
35Foundation Operational Excellence Report© Computer Sciences Corporation 1998
other better and get the feeling of belonging to a community. The
advantage to the company is that it gets better-educated people, working
in a better network, who as a result do not waste time reinventing the
wheel, because they are more aware of what other people are doing.
IBM has a worldwide Intellectual Capital programme into which this
activity is fed, enabling the sharing of knowledge and expertise with the
wider IBM community.
One problem that frequently arises is that the skills development
aspirations of the staff do not coincide with the work that needs to be
done to support the business. A German insurance company with
350 IS staff allocated from a resource pool found that the best way to
take the heat out of this conflict is to provide formal rules. The first
time it occurs, the client has priority, the second time, the client and the
resource pool have equal priority, and the third time, the individual
employee has priority.
Another recurring problem is that staff do not find time to go on the
training courses planned for them. In the UK Post Office, attendance
improved dramatically after implementing the policy that anyone who
wishes to get out of a training course has to obtain permission from a
senior executive. Mid-level managers and above have to get permission
from the CEO.
In all the above cases, responsibility for career development is
underlined by tying financial incentives to skills development as well as
to work performance.
<http://www.postoffice.co.uk/>
Attracting and Retaining IS Staff
36Foundation Operational Excellence Report
© Computer Sciences Corporation 1998
Recruitment and retention are two sides of the same coin
The previous sections emphasised the importance of making the work
environment exciting and agreeable, by attending to the work itself, the
environment, the compensation and the learning opportunities. This is
especially important to retain staff in the prevailing situation of staff
scarcity, but all the features that aid staff retention can also be used to
attract candidates in the recruitment process.
The panel opposite lists some of the sentences that recruiters could use
to describe the organisation in attractive terms. As we have seen, many
members of the IS and HR departments can be involved in recruiting IS
staff. We recommend holding an internal workshop in which recruiters
discuss which of these sentences they would use to make the
organisation sound appealing to different types of IS people. Too often,
the organisation is presented in the same way to all candidates.
This exercise helps sensitise recruiters to the different needs and
aspirations of IS candidates. For example, when we have run this
exercise, very different sets of sentences have been put together to
appeal to an IT Account Manager, a Chief Architect, a Project Manager,
a Year 2000 Assembler/COBOL programmer and a Java Specialist.
Recruiters often focus on the details of the particular position they are
seeking to fill, and pay insufficient attention to environmental factors.
The Workplace Audit Statements developed by the Gallup Poll
organisation in the United States provide a useful checklist for IS
managers who want to develop the best possible working environment
for their staff. Employees are asked to what extent the following
statements apply to their experience at work:
I know what is expected of me at work.
I have the materials and equipment that I need to do my work right.
At work, I have the opportunity to do what I do best every day.
In the last seven days, I have received recognition or praise for
good work.
My supervisor or someone at work seems to care about me as a person.
There is someone at work who encourages my development.
Use the sentences describing a
position in your organisation as an
exercise for a focus group aimed at
raising the awareness of HR staff, and
IS staff involved in recruitment, to the
different needs and aspirations of IS
candidates. The selection of staff
types can be extended to include those
that are critical to your organisation.
The exercise can also be used by
individual managers to reflect on ways
to improve the attractiveness of their
work environment.
Attracting and Retaining IS Staff
37Foundation Operational Excellence Report© Computer Sciences Corporation 1998
In the last six months, someone at work has talked to me about
my progress.
At work, my opinions seem to count.
The mission/purpose of my company makes me feel my job is important.
My associates (fellow employees) are committed to doing quality work.
I have a best friend at work.
This last year, I have had opportunities at work to learn and grow.
Gallup’s US database of surveys of more than one million employees
shows a clear correlation between positive responses to these questions
and high levels of employee loyalty and workplace commitment.
IT Account ManagerChief Architect
Project ManagerYear 2000 Assembler/COBOL Programmer
Java Specialist
In our culture, IS is deeply integratedinto the business
Hours of work are negotiableAll staff have free membership of the
local leisure centreWe are moving our portfolio onto web-
based systemsOur core systems are mainframe-
centricWe operate a wide range of technologyWe have a packages-only policyOur site includes a range of sporting
facilitiesWe run a nursery service for children
under school ageWe have an excellent non-contributory
pension schemeAll staff are incorporated into our career
development programmeOur projects are developed by self-
directed teamsWe pay performance bonuses on a
team basis
We do 360º reviews and awardindividual performance bonuses
With a very few exceptions, all ourpromotions are from within
Staff are affiliated to Centres ofExcellence run by Coaches
We rotate staff through a varied rangeof projects
We provide 100 hours of training peryear to each staff member
Telecommuting is available on a case-by-case basis
We use advanced RAD processesWe provide a stable, stress-free
environmentOur senior executives are actively
involved in ISWe are exploiting leading-edge
technologyWe offer incentives for skills
developmentRemuneration is at or above market
levels
We carry out regular staff-satisfactionsurveys
We provide a variety of social activitiesStaff participate actively in their own
career developmentWe are currently replacing all our
systems with packagesWe provide a full set of personal
technologyWe encourage technological
innovation and experimentsOur working environment is exciting
and dynamicThe IS systems are crucial to the
success of the businessPromotion exists both within IS and
into the businessWe have a reputation for timely
delivery of high-quality systemsWe have a complex and volatile
technological environmentOur methodologies and processes
are well established
For each of the job titles in the green box:As a group
Select five of the sentences from the list above that will give the best impression of an exciting and agreeable workenvironment for the prospective candidate. Then add two more of your own.
As individualsNote the action you could take to improve the candidate-sensitivity of your own job advertisements, as well as their general
appeal. Note ways in which your own work environment could be made more exciting and agreeable.
CASE STUDIES
Attracting and Retaining IS Staff
38Foundation Operational Excellence Report
© Computer Sciences Corporation 1998
Manage people moving out
Our research found little evidence that IS departments have developed
policies to deal with staff who are thinking of leaving, or considered how
best to handle those that do leave. Some staff leave for negative reasons –
dissatisfaction with the work or working conditions, or dislike of
colleagues or management – that might be overcome by improving the
environment. But there are also three positive reasons why staff leave:
to seek wider or more exciting opportunities elsewhere, to gain a
substantial increase in remuneration, or to relocate for personal reasons.
These can also be combatted/overcome.
Those who are hungry for different experiences do not necessarily have
to leave to get them. For example, Rabofacet Spectrum encourages staff
to present at conferences and teach at universities. It seeks joint
ventures with IT vendors to give staff greater learning opportunities. It
allows staff to work their 36-hour week in four days and use the fifth day
to consult with other companies. It welcomes and supports ideas for
new ventures or services. It encourages staff to transfer to other business
units to develop their careers. It has recently sent staff on three-month
secondments to Tanzania, funded by an international organisation.
One response to staff who wish to become freelance contractors and
increase their remuneration is to offer them ‘in-house freelancer’
contracts. Several companies we spoke to are considering offering all IS
employees the choice of a regular permanent employee contract, or a
contract on similar terms to those with outside contractors. Offering
this to all employees removes the resentment that in-house staff feel
towards well-paid contractors, and gives restless members of staff an
opportunity to test the water of the freelance life without plunging
totally into it. At the same time, the organisation benefits from a further
two years of the employee’s service. (Note that there are legal and tax
implications to resolve before this can be adopted as a matter of policy.)
Those who decide to leave because they have to move to a remote
location, perhaps to look after an aged relative or accompany their
spouse who has been relocated abroad, are often regarded as
irredeemable cases. Until comparatively recently, a manager could only
accept these personal reasons for leaving and wish them well. Now, the
employee can become a virtual member of the team, using remote
computing facilities. This great advantage of having established
telecommuting arrangements is only just beginning to be appreciated:
it can be a major help in retention.
CASE STUDIES
Attracting and Retaining IS Staff
39Foundation Operational Excellence Report© Computer Sciences Corporation 1998
If these methods of retention do not work and the employee is
determined to go, the organisation should make every effort to part on
amiable terms. When a manager is angry that someone has rejected all
blandishments to persuade them to stay, that person may depart with
strongly negative feelings. This will only lower the organisation’s
reputation in the eyes of the outside world, where word-of-mouth will
make other people less inclined to join. Wiser managements make
employees feel good when they leave, and take steps to maintain ‘ex-
alumni’ contact with all leavers.
A proper exit interview should be standard practice. The US consulting
organisation Software People Concepts, Inc, goes further than this – it
carries out an exit interview three to six months after the person has left.
It argues that the normal exit interview does not usually reveal the real
reason why the person is leaving, but if the person is happy with his or
her new employer after a period of months, the real reason will emerge
at the interview. If the person is not happy in his or her new job, then
there is an opportunity for re-hiring!
Managing people moving out is an under-developed area of retention
policy. IS departments could take as a model the results of Gensler, a
US construction company that has a staff turnover of 4 per cent, where
the industry norm is more like 20 per cent. Gensler makes firm hire-
back offers to leavers, and in cases where the ex-employee returns,
hangs a boomerang over his or her desk, “as our way of saying Welcome
Back!”. There are plenty of boomerangs, because the return rate of
leavers is a striking 12 per cent.
Attracting and Retaining IS Staff
40Foundation Operational Excellence Report
© Computer Sciences Corporation 1998
Adopt best practice under these management guidelines
In the previous section, we discussed the reasons why staff leave. Our
research also identified seven key reasons why staff stay: compensation
and reward, recognition, the work, technology, learning opportunities,
the work environment and leadership. IS departments should adopt best
practice in each of these areas, as indicated in this report. The
employment policy should embrace all of them within a focus on total
career advancement for each member of staff. A minimum threshold for
each factor must be identified and continually maintained for different
categories of staff.
Balance is key, so avoid overemphasising a single motivating factor. The
commonest culprit is compensation and reward. We saw many cases where
remuneration is relatively high but no effort is made to demonstrate
management’s recognition of good individual work. In other cases,
management is taking a series of steps to improve the work environment,
but doing nothing to make the work itself more significant and exciting.
The struggle with scarcity of IS staff is going to be with us for many years. IS
should develop an integrated strategy covering the whole staffing lifecycle,
and adopt best practice under the following management guidelines:
Actively seek out the people you need and explore creative ways to
reach them.
Become proficient in mining new sources of IS talent.
Hire for long-term fit, not short-term need.
Offer ‘cafeteria-style’ work options, not ‘one-size-fits-all’ jobs.
Provide interesting work as well as flexible work arrangements.
Invest in long-term staff career development, not episodic training.
Keep key employees by giving them a measure of freedom.
A prerequisite for success is that the organisation comes to regard IS staff
as a critical and scarce asset, to be developed and nurtured for their
valuable contribution to business results.
Employee motivation signatureNo amount of over-compensating inone motivator can account for a lackin another
and rewardRecognitionLe
ader
ship
Th
ew
ork
The
wo
rkit
self
Learning Technology
Compensation
opportunitie s
envi ronm
entDanger
Safe
Overkill
Aim to generate employee satisfaction
in all of the seven key motivators,
within a focus on total career
advancement for each member of staff.