It’s fair to say that we are in the middle of an economic correction. I say “correction” because this is a time when previous mal-investment is flushed from the economy, and new investment prepares for the future. The focus tends to be on the reduced revenue, tightened budgets, and staff reductions required to correct for the poor investments. Some focus, however, particularly in IT, should be directed toward investing for the future, even as post-mortems are conducted on past errors.
This is particularly true of IT staffing. Many believe that the dot-com collapse combined with other IT layoffs has produced a surfeit of IT professionals, thereby reducing the need for aggressive hiring practices. But there is evidence that this is, at best, wishful thinking. Rather than being a time to sit on the sidelines, this is a time to get in the game, be aggressive, and hire the staff that will carry your company into the next economic upturn.
One sign of a surfeit of IT professionals would be falling salaries — when supply exceeds demand, prices (in this case, salaries) fall. But this is not what we are seeing. In my company’s latest industry survey, Strategic Trends in Information Technology, respondents say that their top IT staffing issue is keeping pace with market salaries. In other words, there is ongoing upward pressure on salaries. So even if the IT labor market is not as tight as it was 18 months ago, it is still tight, or salaries wouldn’t be rising.
This is a clear call to action. Here we are in an economic slowdown, and salaries are still rising — what are they going to do as the economy picks up? Rise even faster, of course, as demand for IT professionals increases in lockstep with increased business activity. So right now is a golden opportunity to recruit the IT talent you need for the future.
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One weapon for your arsenal follows directly from the fact that keeping up with market salaries is the number-one IT staffing issue — figure out a way to pay market-beating salaries. Certainly this is tough in these times of tight budgets and uncertain futures, but doing so will distinguish your company from three-fourths of the companies out there. Survey results show that only 24 percent of companies pay market-beating salaries.
The most common IT compensation practices are flexible hours (used by 71 percent), training on hot technologies (51 percent), assignment to leading-edge projects (42 percent), and telecommuting (38 percent). If you want to run with the pack, follow these practices. If you want to lead the pack, follow these practices and pay market-beating salaries. In today’s economy, that should give you the pick of the best available candidates.
In addition to tight budgets, most companies have another hurdle that stands in the way — their human-resources systems. Most HR systems assign salary ranges to job codes, and HR administrators fight tenaciously to keep employees at or below the midpoint in their salary range. As managers want to raise an employee above the midpoint or — my God — above the upper limit, the fight turns into a brawl. Why, that would upset the whole structure of the HR system. Once we start making exceptions, there will be no end to it. How do you expect us to maintain order and structure if you won’t follow the rules?
When faced with this institutional rigidity, the first question to ask is: What is the purpose of the HR system? Is it to put all the pegs in the right holes, or is it to acquire, retain, and advance the employees that make the company work? Is HR there to help hiring-managers, or is HR just the salary police? Sometimes it helps to remember that the rules of the HR system were created by humans and can be changed by humans. The system is not an autonomous, omnipotent deity that requires the sacrifice of the best possible staff to its rigid dictates.
IT staffing is a perennial issue. The form changes — sometimes it’s a shortage of college graduates, sometimes it’s the aging IT workforce, and right now it’s recruiting and retaining experienced professionals — but the issue remains. Its persistence speaks to one of business’s universal truths: it always comes down to people. Use the opportunity offered by current conditions to get the people you need to take your company into the future. Staff up now.
Chris Pickering is president of Systems Development Inc., an IT research and consulting firm. He also is a senior consultant for the Cutter Consortium. His latest industry survey, Strategic Trends in Information Technology, is available now from www.sdireports.com.