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d H. Retaining Your Hot Skills Employees . . . Use Dollars AND Sense. Hot Skills Market Still Strong. Business demands  Demand for Hot Skills  Pay  Turnover for high tech is 12% 26% of companies have >10% high tech vacancies Takes half of companies 2 - 4 months to fill vacancy

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Retaining Your Hot Skills Employees . . . Use Dollars AND Sense

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Retaining your hot skills employees use dollars and sense l.jpg

dH

Retaining YourHot Skills Employees . . .Use Dollars AND Sense


Hot skills market still strong l.jpg

Hot Skills Market Still Strong

  • Business demands 

  • Demand for Hot Skills 

  • Pay 

  • Turnover for high tech is 12%

  • 26% of companies have >10% high tech vacancies

  • Takes half of companies 2 - 4 months to fill vacancy

  • 25% cos. have >20% contractors

    Reference: Hewitt Spring 2000 HOT Technologies Survey, Private studies


Skill premiums l.jpg

Skill Premiums

Reference: Hewitt Spring 2000 HOT Technologies Survey


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Recent Top “Ten” Hot Skills

Fall 1998

SAP

PeopleSoft

BAAN

Oracle

Data Mining

Disaster Rec

Call Cntr Arch

Y2K

Middleware

Telecomm Engr

Spring 1999

SAP

PeopleSoft

BAAN

Oracle

Object Engr

Disaster Rec

Call Cntr Arch

Rel DB Mgmt

Num/NonNum Rch

EDI/E-Commerce

Fall 1999

SAP

PeopleSoft

Y2K

Data Visual

Object Engr

Disaster Rec

Multi-media

Rel DB Mgmt

Num/NonNum Rch

Middleware

Spring 2000

Web Infra

PeopleSoft

SAP

Y2K

Data Whs

Num/NonNum Rch

Middleware

Supply Chain Mgt

Voice Sys Engr

Object Engr

Web Security

EDI/E-Commerce

Web Des/Dev

Data Visual


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Varied Market MovementsTotal Cash — Examples

Reference: Various Hewitt HOT Technologies Surveys


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Bonuses

Reference: Hewitt Spring 2000 HOT Technologies Survey


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Bonus and Base- Averages by Job -

Reference: Hewitt Spring 2000 HOT Technologies Survey


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Stock Options

  • Only 1/3 employees eligible

  • 13% of employees receiving

    • Up from 10% Spring 1999

  • Average amount received 23% of base

Reference: Hewitt Spring 2000 HOT Technologies Survey


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Who Are They?

  • Population — non-managers

    • Half 37 years old or less

    • Half in IT profession 8 years or less

    • Half with present company < 3 yrs

    • Half expect to remain <2 yrs

    • 48% currently looking for a job

      • 8% actively, 40% somewhat

    • 64% contacted by recruiters in past 12 months

      • Of those, half contacted at least 3 times in past 6 months

        Reference: InformationWeek Research Salary Survey of 16,900 IT Professionals Spring 2000


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What IT Folks Want

  • What IT people say matters most to them about their job — top four

    • Challenge of job/responsibility

    • Flexible work schedule

    • Job stability

    • Base pay

Reference: InformationWeek Research Salary Survey of 16,900 IT Professionals Spring 2000


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Situation Summary

  • Market is strong, very dynamic - $ and people

  • Rate of increase in market pay is slowing down

  • Continues to be a churn as to which skills are the hottest

  • Prevalence and amounts of bonuses leveled off

  • Use of stock small but slightly increasing

  • Majority of people are Gen Xers

  • Challenge of work is still most important


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First Step — Vital Signs

  • Where is the pain?

  • Quick, simple, quantitative

    • Hot skills market position

    • Turnover

    • Hiring cycle

    • Applicant ratio

  • Determine

    • Areas needing immediate action

    • Areas needing more information


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Market Analysisby Individual


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Above market range of pay


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Market Analysisby Skill/Organization


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Market Analysis

  • Thresholds for concern

    • JUDGMENT call

    • Not formula-driven

  • Consider …

    • Individuals — compare to 20% below

    • Skills/IT organization — compare to 10% – 15% below


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Triage for Low Pay

  • Identify CRITICAL individuals or skills

    • Critical to business goals

    • Another JUDGMENT call

  • Consider …

    • Raise base pay to within 5% of market base pay

    • Target near-term total cash to 5% above market total cash


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Turnover

  • Identify “who” is turning over

    • Voluntary, “regrettable quits”

    • By skill and level

    • By organization

    • By criticality of projects working on

  • Acceptable levels vary by organization

    • Compare to 12% average for high technology employees


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Action for High Turnover

  • Do pay triage if needed

  • MUST identify reasons

    • Ask employees

      • Top three issues they think need addressing

      • Top three things they like

    • MUST take action on feedback

    • Often, poor management will be an issue


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Hiring Cycle

  • How long it takes to fill a vacant position

    • From initial recruiting activity to starting on the job

    • Compare to 61 – 90 days on average for hot skills


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Action for Long Hiring Cycle

  • Build process map

  • Identify and remove roadblocks

  • If timely offers declined

    • MUST find reasons

    • Ask new recruits for improvement suggestions

    • Ask declines for reasons


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Applicant Ratio

  • Number of applicants per employee

    • Compare to median of 3.9 per mgr/prof employee for Best 100 companies

  • Top three attractions for IT professionals

    • Reputation of IT function

    • Reputation of company

    • Promise of doing innovative technical work

      Reference: People Practices of the 100 Best Companies to Work for in America 2000, CIO Communications/ICEX Survey 1998


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Action for Low Applicant Ratio

  • Identify reasons

    • Map and analyze recruiting process

    • Examine company and IT reputation

      • Examine characteristics of “100 Best Companies to Work for in America”

      • Develop YOUR “best practices”

    • Market your IT prowess


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Retention

“Retain” according to Webster’s dictionary . . .

  • To “hold or keep in possession”

  • To “engage the services of”


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Comfort zone

Full time

On-site

Uninterrupted tenure

Exclusive focus

Job centered

Independent

Low turnover

Discomfort zone

Fluctuating time

Multiple locations

Interrupted tenure

Non-exclusive focus

Skill and task focused

Interdependent

High turnover

Employment Relationships


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Why Is Retention Important?

  • Consistency of work, ability to meet goals

  • Quality of work and products

  • Business, customer, and work history and context

  • Productivity and efficiency

  • Control of activities

  • Skill, knowledge and capability

  • Culture, value and purpose constancy

  • Escalating turnover impact and costs


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How Can We Get There with High Turnover?

  • Rapid integration of new employees

  • Rapid competency development

  • Effective project management and tracking

  • Employees with multiple skill sets

  • Easy access to knowledge when needed

  • Clear goals, expectations, processes

  • Continual learning, feedback and knowledge transfer


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Opportunities from High Turnover

  • Constantly challenging status quo

  • Fresh perspectives

  • Introduction of new thinking

  • Conscious transfer of learning

  • Innovation

  • Disruption of complacency

  • Greater awareness of key support systems


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Looking at the Whole Picture

What is YOUR picture?


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Create Your Retention Profile

  • Analyze loss: turnover rate, skills lost, reasons for loss

  • Analyze gain: tenure profile, skills you keep, reasons for staying, acceptance ratio, job satisfaction or engagement factors

  • Identify your retention risks


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Competitive compensation

Strategic people practices

Workforce strategy development, execution and change

Required

Key differentiators

Critical supporting systems

Retention Strategies


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Hot Technologies

92% alternative work schedules

28% mentoring programs

8% paid sabbaticals

63% on-site ATM

32% convenience services

9% personal concierge services

12% voluntary turnover (high tech employees)

100 Best

100% alternative work schedules

64% mentoring programs

29% paid sabbaticals

82% on-site ATM

77% convenience services

26% personal concierge services

10% voluntary turnover (mgr/prof employees)

Hot Technologies Survey Participants and 100 Best Companies

Reference: Hewitt Spring 2000 HOT Technologies Survey, People Practices of the 100 Best Companies to Work for in America 2000


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What You Need to Find Out

  • What are employees experiencing in their work here?

  • What are the primary reasons that people join and remain in the organization?

  • Why do some employees contribute extra effort and others do not?


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Engagement

  • “A state of emotional and intellectual commitment to an organization”

  • Engaged employees will be more likely to

    • Stay with an organization despite competitive offers

    • Express a consistently positive viewpoint about their company

    • Exert discretionary effort that contributes to business results


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Overview of Engagement

The Seven Factors

Culture and Purpose

Opportunity

Sense of purpose

Growth/

Organizational values

Development

and behaviors

Total Compensation

Advancement

Pay/Financial recognition

Interaction

Benefits

Quality of Life

Work Activities

Engagement

Physical environment

Impact

Time/Work/Life

Challenge/Interest

Status/Pride

Leadership

Relationships

Credibility

Coworkers

Managers

Trust

Customers

Reference: Hewitt Associates LLC Engagement Model


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ITStrategicSolutions

ITOperations

Data Center

ITApplicationDevelopment

Impact of This Predictor

ITLogistics

Culture and Purpose

1.9

1.8

1.0

2.0

Total Compensation

0.7

0.6

1.3

0.6

Work Activities

1.1

0.8

1.9

1.2

Relationships

0.5

0.5

0.5

0.7

Leadership

0.3

1.4

0.7

1.0

2.1

Quality of Work/Life

1.4

1.1

0.6

Opportunity

1.7

2.1

3.2

2.5

Engagement Rating

81

78

73

78

Source: Proprietary survey conducted by Hewitt Associates

Enhancing Engagement at One Company’s IT Groups


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Key Considerations

  • Identify your retention needs

  • Create your retention profile

  • Determine the “systems” that will help you manage well with high turnover

  • Match these with your IT and business strategy

  • Work in partnership with IT


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I want ...

Autonomy

Flexible assignments

Promotions, fast rise

Sense of community

Continuous learning

High compensation

and I want ...

Team membership

Specific roles

Short tenure

Remote, flex-hours

Critical assignments

Greater life balance

Managing the Hot Skills Contradictions


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dH

Retaining YourHot Skills Employees . . .Use Dollars AND Sense

John H. Davis, Ph.D., CCP

Hewitt Associates

Suite 100

2201 West Royal Lane

Irving, Texas 75063

972-402-8700

www.hewitt.com


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