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IT Hiring Practices Breed Frustration

By Patricia Schnaidt   Network and IS managers' frustration at their employers' inability to understand the specific needs of the IT organization and its professionals colored a hiring and retaining IS staff presentation that I gave last month at the Enterprise Management Summit. Common staffing practices at many organizations hardly can be called best practices in a market characterized by an increasing demand for technology- and business-skilled people, coupled with an intensifying shortage of people experienced in managing systems and networks, in particular Windows NT, SAP R/3, ATM, intranet and Web projects.

High demand paired with low supply is an economics formula for high prices--in this case, wages--but the textbook rule is not necessarily the case here. In practice, many corporations have taken a short-sighted view of IT resources and staffing, creating an environment that encourages IT staffers to leave in order to advance t heir careers and earn more money. This runs counter to conventional wisdom, which dictates that if IT is strategic to your corporation, enhancing its revenue stream, IT projects will be more challenging and IT salaries will be higher.

One complaint that session attendees had is often heard in IT departments: The compensation of current employees doesn't keep pace with the salaries offered to new employees. The frustration expressed by the session attendees is aimed at both their personal bank accounts and their ability to staff a department. IT managers at the session told tales of trying to hire people at starting salaries that were significantly higher than their own--which is little reward for being a long-term employee.

Others told of their companywide 2 percent or 4 percent raises, and management's unwillingness to take into account the industrywide demand for IT professionals when calculating IT salaries, even for new employees. When trying to recruit to fill positions, potential employees wouldn't accept the jobs at the offered rates. Or if they did accept, they stayed only a year, which is long enough to gain the experience needed for a higher-paying job elsewhere.

Another complaint often heard: The IT career path is bifurcated into management and technical, and upper management considers the technical track to be lower. Many medium and large IT organizations can afford to set up career paths for those who want to remain on the technical track, perhaps as chief architect or leading problem-solving tiger teams, but many smaller organizations can't do this.

Then the same upper management that wouldn't authorize more than a 2 percent raise hires consultants to do the new cool projects or the existing work after enough employees have quit. Consulting firms assuredly have advantages, including the ability to bring in people with particular specialties and experience putting in systems. Consultants are temporary, no t permanent, employees; their fees are off the already-burdened IT budget when the project is over.

The IT staff knows that management is paying the consulting firm $150 to $200 an hour or more for those virtual employees--often to do the same work as the person who just quit. The IT staff can't reconcile the differences, and they, too, consider the peripatetic consulting life. The solution is not for everyone to become a consultant or to work for a vendor, for then there would be no one left with technical experience to run the IT departments.

A common way to get significant raises and leaps in responsibilities is to change companies, thus attaching a stigma to IT people who've been in their jobs a long time, with "long" meaning more than five years. By changing jobs often, IT professionals also develop new technical and business skills, broadening their experience base. The corporation gets a constant stream of people with innovative skills and ideas, though in thi s scenario, upper management is no t calculating the cost of hiring and ramping up recently hired employees. And most important, the corporation is not retaining people who have deep a knowledge of the company's business processes and technology as well as the IT department's functioning--a situation that could worsen if IT truly becomes as strategic to the bottom-line business as all the trade press say it will be.

Patricia Schnaidt can be reached at pschnaidt@nwc.com.

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Updated September 8, 1997

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