Channel Faces Workforce Retention Challenge

Despite the economic slowdown, IT managers still perceive recruitment and retention as a problem, mostly because the areas where they need people the most are also the areas with the greatest scarcity. No surprise there. Solution providers face the same dilemma, but have one big advantage in the competition for talent that the average IT shop cannot hope to match: the ability to offer challenging work and flexible work arrangements.

Our recent study on retention at Computer Economics found that when it comes to retaining tech talent, money is not the primary ingredient. Yes, salaries need to be competitive, but it is not the bottom line for retention. The No. 1 factor that keeps tech workers around is the amount the organization invests in education and training.

This says that technical employees like working with the latest technologies, learning new skills, participating in projects, and seeing a clear path for career advancement. That does not sound like the average IT operations job. Solution providers that are doing project work and pushing the envelope on emerging technologies have a clear edge in attracting top-notch talent.

Some solution providers, however, face self-inflicted challenges when it comes to recruitment and retention. Historically, one of the strategies has been to institute incentive pay throughout the organization, but our research indicates that aggressive incentive pay programs can actually increase turnover. While incentive pay may be a good way to get employees motivated and focused on strategic objectives, it does not necessarily lead to high job satisfaction. Solution providers need to be careful when designing incentive pay programs to minimize the adverse impacts.

In short, the lesson is that increasing base salaries and enriching incentive pay is not the most effective—and certainly not the least expensive—way to improve recruitment and retention. Keeping jobs interesting, investing in training, and providing quality-of-life benefits such as flexible work schedules, telecommuting, and additional paid time-off can be more influential than fattening paychecks, according our study. As counterintuitive as it may seem to some, many IT managers also find that flexibility can improve productivity.

Solution providers who find themselves facing recruitment and retention challenges should consider taking advantage of the channel’s natural advantages. Invest in training and improve the quality of life of your employees, and they will be very reluctant to leave for “greener” pastures.

(John Longwell is the director of research for Computer Economics in Irvine, Calif., an IT research and advisory firm that has been providing IT spending, staffing and technology trends data and related metrics to industry and government since 1990.)