STRATEGIES FOR ATTRACTING AND RETAINING A SKILLED IT

STRATEGIES FOR ATTRACTING AND RETAINING A SKILLED IT WORKFORCE Albert Wong albert@jobstreet. com CTO, Job. Street. com March 2, 2004

Cost of turnover Direct cost: • Severance cost • Recruitment cost • Orientation • Transitioning - Learning up and Training Easily add up to 3 or more months of staff cost Indirect cost: • Lost of experience and knowledge • Opportunity cost • Staff morale

Contents • • • What employees want? What employers want? Retention case studies Attracting new staff Contracting and Outsourcing

What employees want? • Depends on individual, stage of life/career and external conditions Job. Street Jan 2004 Survey: What non-monetary attraction will best attract you to stay with your current employer? 1. Honest communication/Trust 11. 9% 2. More responsibility 4. 9% 3. Challenging work 8. 2% 4. Career advancement 43. 6% 5. Work-life balance 31. 4%

Retention Factors • • • Compensation Fair pay equated with performance and effort expended Culture & Work Environment Strong workplace communications, trust in employer and work relationships Training & Development Training, mentoring, education and career development Supervisor Role Overall performance of supervisor, working style and relations with staff Growth & Earnings Potential Opportunities for new skill development, promotion and financial reward From Spherion Study in US

What do employer wants? • ROI from employees • productivity • quality of work • Need to balance between short term and long term

Case study – Company A • • IT organization of a MNC 30 staff 0 turnover in 4 years Freeze hiring/salary increment last 2 year

What is the score for Company A? • Compensation • One of best paying in town. 14 months over 12 months. • Performance based system – perceived to be fair in most instances • Stock options • Culture & Work Environment • Reports directly to US, open communication and feedback, friendly and good work life balance. Minimal politics. • • Training & Development • Budgeted 2 external training to be taken • Internal opportunities Supervisor Role • Not dictatorial style – project timeline from bottom up, informal rewards, open feedback Growth & Earnings Potential • Headcount growth of 30% for coming year, overseas exposure A balanced work/life environment

Case study 2 - Company B Local company IT department • 25 staff • 25% turnover in last 2 years mostly in 1 -2 years experience range • Hot skills - Web development • Core staff stayed

What is the score for Company B? • Compensation • Average compared to direct competitors - MNC • Private stock options • Culture & Work Environment • Flat organization, open, flexible, No politics. Some communication issues Training & Development • Substantial on the job learning opportunity Supervisor Role • Mostly less experience supervisors • • • Growth & Earnings Potential • Career path not well defined, less exposure compare to direct competitors • Less work/life balance

What is your company’s score? • • Do a informal survey on how employees grade each of the factors on a 1 -5 scale. Get feedback regularly besides from formal reviews on what top employees want

Best Practices • Don’t plan to retain all • Identify stars • Work closely with them, and build up relationships. • Retain them • More demoralizing if stars leave • Be flexible - flexible hours (late hours common), no time clocking, casual dressing, free snacks, red tape/hierarchy • Work scope • Keep open communication and build trust. Make their opinions count. Regular 2 way feedbacks. Stop politics

Best Practices • Compensate fairly based on results and competitively vs direct competitors – not general market salary • Rewards • Cash • Training • Time off • Promotion • Stock options Ask what they want – not what you want

Best Practices • • • Set high entry point and expect high standards Promote from within Proper process and documentation Pair staff where possible – back ups Appreciate supporting staff

Best Practices • Transitioning stages • 3 month acclimatizing barrier w Buddy/mentor • 1 -2 year expectation leap • 3 -4 years - how am I doing assessment • Choose your location well if possible • Focus on improving business first

Role of Supervisor • Research shows immediate supervisor plays very important in retention • Gallop Survey – Book: First Break The Rules • Logical since supervisor likely has most effect on working “environment” of a staff • • • Do I know what is expected of me at work? Do I have the materials and equipment I need to do my work right? At work, do I have the opportunity to do what I do best every day? In the last seven days, have I received recognition or praise for doing good work? Does my supervisor, or someone at work, seem to care about me as a person? Is there someone at work who encourages my development?

What attracts new staff? • Compensation and benefits • Advancement and learning opportunity • Company reputation

Attracting Employees • Develop a good core team who loves the company • Build a continuous learning environment • Expect high standards and implement best retention practices

Build an Employment Brand • Encourage staff to talk about company with friends • Write about your best practices on your career web site • Generate publicity - win awards • Promote on campus – hire top students w Build academia relationships

Other Practices • Employee Referral Program • Cash based on confirmation • Effective for a number of companies • Signing bonus for hot areas • Stock options

Candidate Sources Based on Job. Street Malaysia Customer Survey

Other staffing options • Contract staff • Outsourcing • Hiring from overseas

Contracting • Good for short term peaks or projects requiring specific experience • Access to skilled staff • Lower overall cost • Flexibility • No severance cost • Disadvantages • Possible integration and morale issue • Higher salary expected – at least 20% more • Direct or indirect through contracting firm • Option to convert to staff • Treat them like employees

Outsourcing • Why outsource? • Tactical Reasons w Reduce cost w Reduce initial capital outlay w Lack of internal resources w Problematic functions but. . • Strategic reasons w Business focus on core areas w Access to “better” capabilities/standards w Shared risks

Outsourcing • Disadvantages • Losing control • Vendor might not be able to provide desired results • Losing trained staff • Know what you want explicitly – specification, performance levels, internal interfaces • Work closely with outsourcing firm • Outsource development but down in house

Hiring Foreign Staff • Usually on contracts • Immigration • Easier to retain • Recruiting process • Use search service as local knowledge needed • Hire from good schools • Culture issues

Conclusion • There is no magic bullet to attracting and retaining staff • Work on finding and providing what each of your core employees values AND towards long term improved productivity in return • And if you are looking for IT staff in Malaysia, Singapore, India and Philippines, visit www. jobstreet. com or email us at sales@jobstreet. com

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