Revenge of the Dot-Nots

FRAMINGHAM (07/17/2000) - You have no stock options to offer. There's no pinball machine or air hockey table in the coffee room. You prefer that workers leave their dogs at home. And your company is in an industry with a low glamour factor - say, groceries or insurance.

In short, you're a dot-not.

So how do you compete for the scarce information technology professionals that virtually everyone - most notably much higher-paying and far hipper dot-com companies - are trying to attract and retain?

At Widener University, a private, 2,400-student college in Chester, Pa., luring such talent is certainly not done with money. Salaries for some of the university's IT workers fall as much as 20 percent below the region's median pay rate.

Yet in the past few years, Gary Habermann, director of technical resources, can recall losing only two IT employees to dot-coms.

His secret: "I've tried to put together an environment that makes it fun for people to come to work," he says. "I try to pay them to play with toys."

Other dot-nots are luring technical talent with the promise of ultraflexible working hours, a casual work environment and a better work/life balance.

At Widener, the university's high-tech toys are located mainly in a US$4 million technology lab. The lab houses hardware and software, such as technology for streaming video applications that Widener's IT staffers get to experiment with as much as six months before it hits the market.

"We're a huge believer in alpha and beta testing because it's my belief that if we're going to use a product, we should know it better than the engineers who built it," Habermann says.

By forging relationships with multiple vendors, "We've earned a reputation as reliable testers," Habermann says. The hardware and software that make the grade usually end up in the university's 10,000-node network, which spans 90 buildings and runs voice, data and video applications. Habermann has also contracted for Widener to provide technical and network support, which includes purchasing PCs, to 12 local school districts.

Passing Along the Perks

Because of the huge volume of business he generates for vendors that supply all the equipment, Habermann is able to buy the gear at a substantial discount. He can then pass the savings on to his staffers in the form of bonuses and salary increases to help bring both in line with the local market.

Other perks include casual dress, flexible hours and free tuition for employees, their spouses and their children. "I just hired an engineer away from Nortel because he has two girls who in another few years will be ready to start college," Habermann says. "If you've got kids and need to put them through school, you can't beat working for an educational institution."

Also, measured in pretax dollars, tuition at Widener costs $16,000 per year, so for two children, that represents an additional $32,000 - an annual bonus most IT workers, even those at dot-coms, aren't guaranteed to receive in cash, Habermann says.

Boll Homa, CIO at Hannaford Brothers Co., a chain of 155 grocery stores based in Portland, Maine, says he also believes in touting the company's leading-edge technologies to both prospective and current IT staff. More so than money or stock options, new technologies are what often appeal to technically oriented workers, Homa says.

For example, Hannaford is about to launch a pilot project deploying wireless technology and two-dimensional product codes in its stores. It's part of a longer-term supply-chain project to do computer-assisted reordering based on point-of-sale data.

"We do talk about this during the interview process," Homa says. "We try to make them see that if they want new technology, they don't have to go to a dot-com."

He concedes that there are "not too many dot-coms in Maine," but the competition with them for IT talent has nonetheless been fierce because Boston's dot-coms are less than two hours away.

Homa, who moved to Maine three years ago from his home in Connecticut and a previous job for which he commuted 50 miles to New Jersey, also emphasizes the quality of life in Maine. "It's very inexpensive to live here," he says.

"There's low crime, good schools and access to incredible sports all year long."

Homa's recruiting efforts have largely succeeded, he says, "by giving people access to interesting things to work on and by implementing technologies that have a true impact on the business so people can see a direct correlation between their work and the business."

Just 45 miles west of Boston, Allmerica Financial Corp. in Worcester, Mass., faces even stiffer competition from big-city dot-coms. To help attract and retain IT talent, the company has instituted several new compensation and training programs.

As a result of those programs, the IT staff turnover rate has dropped from more than 20 percent to 10 percent in the past two years, according to former CIO Robert Bruce. (He recently left Allmerica to seek a position in operations at a technology company.)Among other things, Allmerica tripled its IT training budget to give staffers access to new technologies. On the salary side, the company completely revamped its compensation programs, including upgrading salaries to bring them in line with market levels. To establish these levels, Allmerica "much more closely" scrutinizes multiple salary surveys and studies them twice annually. Before, it reviewed surveys only once a year, Bruce says.

The company also implemented a bonus program for workers whose skills may not be leading-edge but are nonetheless in high demand. These include Oracle database administrators, network administrators and C++ programmers, who are paid bonuses ranging between $1,000 and $3,000 every fiscal quarter.

The program is administered by senior technical experts, who are in the best position to gauge which skills are most in demand based on the level of difficulty they may be having staffing a particular project, rather than by IT managers, says Bruce.

Opportunity Cost

In contrast, IT employees with dot-com experience say that many dot-coms are under too much time pressure to have their technical experts closely consider co-workers' skills, much less help administer employee retention programs.

Margaret Schweer, director of IT human resources at Northfield, Ill.-based Kraft Foods Inc., says she believes a company's IT salary dollars are best spent retaining the best IT talent rather than trying to prevent workers from heeding the siren song of dot-coms.

Schweer maintains that at best, IT managers and corporations in general can influence perhaps 20 percent of what goes into an employee's decision to flee for a dot-com or any other company. "It's the market that's driving turnover.

Turnover happens. Just get over it," she says, adding that it pays to try to control the "flow and direction" of staff turnover rather than trying to halt it altogether.

So forget about copycat pinball machines or all-day cappuccino service. There are some very basic things that companies can do to compete on the same level as dot-coms during the recruiting process, especially when college graduates are the target group.

One way to compete is to act more swiftly than large corporations are accustomed to acting. Dot-coms typically notify prospective employees of a hiring decision within 48 hours. Larger companies need to do more of the same, Schweer says. "It's a new economy, but we [larger, non-dot-com companies] still work on envelope time. That has to change."

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