John Andrews used to think he had things under control. As chief information officer at CSX Technology, (the information systems unit of CSX Corp.) in Jacksonville, Florida, his recruiting needs were manageable. He had become accustomed to having a stable and reliable IS workforce. Life was good.
Then, two years ago, a major employer in the region embarked on a crash year 2000 project, offering IS salaries 25 per cent to 45 per cent above the market rate. Information technology staffs throughout the region were ripe for the picking. Retention, which Andrews had pretty much taken for granted, suddenly became Job One.
Sound familiar? Today, successful IS managers must play a role similar to a career counselor. They must mediate between the needs of their much-in-demand IS employees and the opportunities available in the workplace.
In a survey of 240 companies that participated in the Annual Best Places to Work survey - to be released later this year - Computerworld identified the top 25 IS employers in retention. For the most part, those IS organisations are at-large, Fortune 500 companies. Although these "retention getters" have different formulas, prominent features in nearly all of their retention strategies include mentoring programs, well-developed career ladders, competitive - though not lavish - compensation and strong attention to the needs of employees.
And paying attention to employees does produce results: For the top 25, attrition rates are mostly in the single digits, sometimes the low single digits. Here's a look at what a few of these leading retention programs are doing:
Greater Voice, Greater Options
In the past, IS professionals faced a "glass house ceiling.'' If you had a technical bent, you had to switch to a management track for continued career growth, says Joe Smialowski, who has been CIO at Sears Roebuck & Co. since 1993. Sears has changed that scenario, implementing multiple career paths for IS professionals.
"It used to be that the management level was as far as you could go if you chose a technical path, but now we have mostly equal rungs all the way up - just like general management," Smialowski says.
Offering alternative career paths is becoming increasingly important as many organizations flatten the IS ranks. Quite simply, there is less demand for traditional IS managers, but growing demand for highly skilled IS specialists. That puts greater demand on job satisfaction levels.
In an effort to keep up with simmering employee issues, Sears each year conducts the My Opinion Counts survey. It measures employee views on opportunities within Sears, teamwork and other aspects of the workplace.
And, like others in Sears management, Smialowski knows employee opinions really do count: Part of his annual compensation is tied to employee satisfaction goals - what he calls a 360-degree feedback process.
Obviously, money is an important component in any retention effort, though Smialowski argues it isn't the No. 1 ingredient for success. Sears has an annual incentive plan based on a mixture of overall company success and the success of the particular business units an IS person supports.
Together, those factors account for 11 per cent of compensation. An additional 1 per cent is pegged to individual performance goals.
Is everybody happy?
"I have learned that a key to retention is providing employees with a line of sight for their career growth," says Bob Monastero, director of human resources at the IS department at Xerox Corp. in Rochester, New York. Monastero credits an annual employee satisfaction survey with providing insight that has helped Xerox maintain single-digit turnover.
As at Sears, Monastero and the IS managers at Xerox have a lot riding on keeping the rank and file happy in the 800-person, global operation. "Ten percent of my annual bonus is tied to employee satisfaction," Monastero says.
And satisfaction here is key. Four years ago, Xerox passed most of its IS staff over to outsourcer, Electronic Data Systems Corp. The remaining staffers are considered mission-critical.
The annual satisfaction survey is a vital element in retaining employees. Employee responses are closely evaluated to show where staff loyalty might be vulnerable. "That gives us the opportunity to look at the weak areas and try and correct them," Monastero says.
Monastero also compares results with those typical at other Fortune 500 companies.
Learning about employee needs and developing retention strategies has resulted in a four-pronged retention program.
One element is working conditions. At employees' request, Xerox now lets workers telecommute, work part time and job share.
Another program element is skills development - lots of it. "We have learned [from our surveys] that for employees, maintaining technical and business skills is very important. So Xerox has loosened its purse strings and now funds almost any educational program that has a job connection," Monastero says.
In practice, that has meant providing full funding for employees seeking certification or individual courses as well as those chasing their master's degree, he says.
As long as the training is related to an employee's work and the employee feels it would be valuable, Xerox writes the check.
A third program element recognises the changing IS workforce. Monastero is looking at alternative career advancement opportunities for IS professionals who aren't lured by traditional management.
As for traditional benefits at Xerox, this fourth element includes profit sharing and bonuses.
"Every employee is on a corporate profit-sharing program, and over the last two years, we have been providing about 10 percent above base pay," Monastero says."We [also] have every employee on a bonus program, so their financial opportunity is higher than in the past. Compensation is tied to both personal and corporate performance as well as the performance of the IS unit."
Consider Yourself ... One of the Family
At Corning Inc. in Corning, New York, the corporate infrastructure is viewed in terms of its ability to support employees. And according to Gerrie Storch, human resources manager for IT, from the moment employees join the company, Corning makes every effort to give them full access to the tools and support they need.
Like Xerox, Corning offers a panoply of benefits and a competitive salary structure. And it takes advantage of its local labor market economics. But Storch says she also has a retention secret - she makes sure employees don't stew.
"We try to take away the dissatisfiers," she says.
That means having a strong program for training supervisors, ensuring that they are effective and able to get new employees oriented as soon as they come aboard and giving new employees a proper introduction to Corning corporate culture. It also means acknowledging internally where the organization needs improvement.
"When people come into the company, they are assigned a buddy - another employee - who can help them with questions, solving problems and getting acclimated," Storch says. The program helps keep employees from feeling lost, alienated or frustrated.
Staying On Just a Little Bit Longer
Dennis Rygwalski, director of IS at Fleet Financial Group in Providence, Rhode Island, has deconstructed the retention problem. His conclusion: He wins if he gets employees to stay on just a bit longer than the average for his industry.
Success in the retention game isn't to keep everyone forever, Rygwalski says, but simply to increase the average duration of employment. He estimates that three or four years is typical across the industry. If he can raise that average by an additional year or two, he says he will have accomplished a great deal.
One strategy has been to actively recruit new hires fresh from college and then build a loyal relationship with them. "We have established a training program for them as well as a coaching process, and each one is assigned a mentor," Rygwalski says.
To keep them satisfied, "we host a series of breakfast meetings for new employees where they can sound off and let us know what aspects of Fleet haven't lived up to their expectations," he says.
Retaining the Troops
In a similar vein, the retention motto for Fleet might well be "Think globally, act locally." Fleet is ranked as one of the nation's largest financial institutions, but its IS operations are scattered across markets in second-tier cities: Providence, Hartford, Connecticut, and Albany, New York.
Still, Rygwalski acknowledges, the lure of more dollars in a red-hot market is difficult to fight. As a result, Fleet has had to implement a retention program specifically targeted at its year 2000 staff - with bonuses available to those who stay on until the job is done. And, he adds, "We are constantly looking at our salary levels to make sure they are adjusted to the market."
The Real Year 2000 Lesson
Although Andrews' year 2000 work at CSX was a thing of the past, he was quick to apply the retention lessons he learned when recruiters began trying to lure away his people. "For the last year and a half, we have implemented a review of market salaries every six months to make sure we don't get blindsided," he says.
What's more, Andrews makes sure employees realise that if it's exciting technologies and opportunities they want, look no further. "We have been early adopters of many of the newest technologies, including 6 million lines of Java code," he says. That figure exceeds any other single location in the world, Andrews says.
The company also has a recognition program, quarterly bonuses, extensive training opportunities, frequent communications with employees and a casual dress policy.
To make sure that employees really do think of CSX as a place to grow, Andrews has developed and implemented a browser-enabled tool to let people develop their own career map within the organisation.
"If someone wants my job," Andrews quips, "this tool helps them understand the requirements and paths to get there."
Earls is a freelance writer in Franklin, Massachusetts.
SIDEBAR: Retention Deficit Lessons
Alan R. Earls
If you are a manager who loses sleep over your turnover problems and thinks the solution may be launching a formal retention program, you may be wrong.
Many on the front line say keeping information systems employees isn't as simple as offering them new perks, lighter workloads or fatter salaries, though each of those elements plays a part. Instead, managers say, keeping employees depends on a company's willingness to reach beyond traditions and circumvent one-size-fits-all human resources policies. It means winning loyalty one person at a time.
Sometimes elaborate and expensive retention efforts can backfire, effectively advertising to your employees how vulnerable you are and how many opportunities are available elsewhere. Often they are symptoms of IS environments that don't encourage ideas, or don't promote communications.
John Burns, vice president for year 2000 issues at the Canadian Imperial Bank of Commerce in Toronto, recites a laundry list of problems with the retention schemes he's tried. For example, formal retention programs tend to bring responses from competing organisations, and a bidding war is often the result, he says. Similarly, showing preference to year 2000 staff or others with specific in-demand skills creates waves of resentment that can undermine the retention program for the rest of the IS staff.
"As we built the metrics to establish a [retention] baseline, we discovered that the most important item was to be an employer of choice," Burns says. That involves applying all the tools of the trade - compensation, training, special awards - and more, he says. But all the efforts should be bound by a visible commitment to the team and the individuals who are part of it.
"Why do all these fancy things to force people to stay? Why not just be a great employer and make people want to stay?" asks Robert Helms, director of human resources. The answer, it seems, lies in using the "fancy things" in a down-to-earth, one-to-one fashion that encourages mutual trust and commitment between employer and employee.
Computerworld's Annual Job Satisfaction Surveys bear out that point. IS professionals routinely say they are underappreciated, overworked and overstressed. Based on that, they want more money and benefits, or they'll find more appreciation, better pay and less stress elsewhere.
Steve Ossandon, president of Interworks Systems Inc. in Melville, New York, cites two decades of corporate downsizing across the country as the primary culprit in the IS retention battle, not just hot year 2000 and outsourcing competition. Employers are less loyal, and employees know it.
"I remember [what] my grandfather thought about his company back in the 1950s and '60s," Ossandon says. "He was a part of that company, with loyalty, and was not even considering going somewhere else." Try saying that about today's workforce.
Ossandon implies that changing workforce attitudes will take time - and personal effort. But when it comes to the nitty-gritty of hanging on to IS talent, you'll get your payoff. Ossandon says the key is to not only provide job security, but also to engender feelings of belonging, contribution and value.
"I make sure I do rounds each day when I'm in the office, and I encourage other managers to always do the same," he says. As a result, turnover in his operation is minimal, he says.
Jennifer B. Wilson, associate vice chancellor for human resources at University of Wisconsin at LaCrosse, agrees with that approach. Computer professionals will stick around if they feel they are part of a larger team and feel a sense of belonging, she says.
Even when that sense of belonging breaks down, decisive intervention by a manager can bring it back. "We beg a lot," laughs William Woodside, director of technology at Giant Food in Maryland. And it pays off. "We have actually talked to a number of people that had already given their notices, and by talking with them and finding ways to address their concerns and be more flexible, we were able to retain them," he says.
"Loyalty is a two-way street," says Mark Cook, director of computer services at the Columbus School of Law in Washington. Cook says managers should never take their staff for granted. "Make sure the staff knows you are their champion," he says.