InformationWeek
Defining The Business Value Of Technology
May 4, 1998
Managing That Churning SensationWhat can you do in a world where 20% job turnover among IT employees is considered normal? Get used to it.
By Edward Cone
t's the conversation all technology managers dread. "He said he'd gotten an offer he couldn't refuse," sighs Bob Schwartz, CIO of Panasonic, recalling the recent resignation of a 10-year veteran from his staff. "We lost some good knowledge when he walked out the door."
Welcome to the new world of churn. It's a world where managers scramb le to staff crucial projects, while workers view their current job as just a stepping-stone to the next one. The old rules of long-term employment died with downsizing and massive layoffs, and it didn't take long for workers to recognize their new freedom. Annual turnover of IS staff is estimated by several CIOs at 20%--that is, one in every five staffers quits each year. "Loyalty to a company is dead, and it has been for a while," says Paul LeFort, CIO of United HealthCare Corp. in Minneapolis.
For many IS managers, coping with employee turnover has become a big part of their job. Panasonic's Schwartz, for example, puts a lot of effort into retaining workers and anticipating inevitable departures. "There is no magic bullet, no single solution to the problem of keeping IT workers these days," says Schwartz, who in his effort to attract and hang onto people has rethought everything from titles to compensation to the dress code.
Making this national trend toward worker transience an even bigge r problem is the serious worker shortage. As a whole, the IT industry--including vendors, consultants, and users--will need to fill 1.3 million jobs over the next 10 years, predicts the Department of Commerce. As a result, everyone's essentially a free agent in the open market. "Churn is going to get more rapid, not less," says Christopher Meyer, director of Ernst & Young's Center for Business Innovation and co-author of a new book, Blur: The Speed of Change in the Connected Economy (Addison-Wesley, 1998).
Of course these changes aren't happening in a vacuum. The churn faced by IT managers is part of a global process. "The economy is a market for talent," says Meyer. "That's not the old industrial model. The watchword here is the substitution of market mechanisms for command-and-control mechanisms, just like you saw when the Berlin Wall came down. It works at the macro level, and it will work at the micro level."
What's an IT manager to do? Deal with it--with recruiting, training, wha tever it takes, says Dick Silvers, CIO at Marketing Specialists, a food brokerage in Irving, Texas, whose company serves as a middleman between food companies and grocery stores. Marketing Specialists has instituted specific programs to retain staff. "You have to be flexible," he says. "We let people work at home, and we work on their environment when they're here." Silvers, a former CIO at Tandy Corp., says he also believes in providing workers with extensive and expensive training as an incentive to stick around (see related story, " Can Training Revive Loyalty? ").
One thing Silvers doesn't mention: money. "It's less the salary numbers than how we treat people," he insists. It's not that money doesn't matter; it does. But for IT workers, good compensation has become a given. IT workers earn an average annual salary of $46,000, significantly higher than the nationwide private-sector average of $28,000, according to new Commerce Department estimates. And for some top I T executives, compensation soars into six and even seven figures. "Everybody's got money," says Rick Throckmorton, a VP and partner with Booz, Allen & Hamilton who works in McLean, Va., and New York. "It's the ante to get into the game. But once the money is competitive, it's not the determining factor."
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Illustration by Joe Scanfani
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