They Turned The Tables On Turnover

By STEVE ZURIER

The worldwide IT labor shortage shows no signs of easing. If anything, the ever-increasing number and scope of Web projects is tightening the hiring market.

Companies could be shy as many as 850,000 qualified IT workers this year, the Information Technology Association of America reports. That shortfall will require management to step up its recruiting and retention efforts even more.

Some 60 percent of IT staff and 67 percent of IT managers have been contacted by a headhunter in the past 12 months, according to a new survey by InformationWeek Research. While the percentages are down slightly from a similar survey last year, those recruited say they've been contacted, on average, three times in the past six months.

Many companies are trying to lure and keep managers and staffers with more money. IT managers working on Internet projects have stock options with a median value of $75,000, according to the InformationWeek survey. Total cash compensation, including bonuses and other cash payments, will rise 9.3 percent to $78,000 for IT managers and 8.2 percent to $58,000 for staff. The largest increases in salary and total compensation this year will go to people in Internet-related job functions. Staffers working on Web projects will get nearly 11 percent higher total compensation, and managers will receive a 12.5 percent increase.

Still, recruiters realize that money alone won't always attract and retain good people. "Quality-of-life" perks such as free ski lodge passes, massage therapists and Friday morning espresso carts are becoming more popular. Companies are also doing more thorough screening of candidates. In this report, InternetWeek takes a look at four companies that have done an exceptional job of attracting IT and e-business talent and keeping their turnover rates low.

Ariba Inc. says it has lost only one person voluntarily from its development group in the past three-and-a-half years, while AllBusiness.com, a start-up that merged with NBC Internet Inc. earlier this year, keeps its IT turnover rate at about 6 percent. UtiliCorp United, an international energy company, boasts a 7.7 percent IT turnover rate, down from a high of 41 percent in 1997. Defense contractor Raytheon Co., which like most defense companies has struggled financially as the industry consolidates, manages to keep its IT turnover at less than 10 percentÐbelow the 12 percent to 20 percent average Gartner Group cites.

Of course, IT turnover is just one measure of success. What's important is making sure the right people stay, notes Barbara Gomolski, research director at the Gartner Institute.

In an average IT department, 20 percent of individuals are highly critical to the success of the company, 70 percent are highly valued and 10 percent are expendable, Gomolski says. "The folks in the 70 percent should get competitive pay and nice perks," she says. "You should do what you can to keep them happy. But the folks in the 20 percent should receive the most. They are the ones who should get the lucrative stock options and the maximum amount of flexibility."

Managers at each of the companies profiled say finding and keeping IT talent is a constant grind. And they say that while money is an important driver, today's IT workers are also looking for a fulfilling place to work. Given the estimated 850,000-worker shortfall, IT workers can be choosyÐso you might want to start thinking about that espresso cart.

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Ariba's Culture of 'Scary Fun' Keeps Turnover Down
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Raytheon: Competing For Web Talent
UtiliCorp: Valued Employees Will Stay