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Articles from our Newsletter:

How Employers are Handling the affects of the Expensive Gas Situation

How slow Real Estate sales are affecting Companies' abilities to Hire

IT Execs Sound Off on Recruiting & Retention Issues 

IT executives recently shared their thoughts regarding several IT talent challenges in the 2007 Recruitment, Retention and Development Survey conducted by CIO Insight and Ziff Davis Media. It may not be news that IT executives continue to face talent challenges, but the results do point to systemic issues that if addressed could help alleviate retention difficulties for some organizations. 

Demand for IT staff is growing. Only 50% of participants agreed that their current level of IT staffing was sufficient when the survey was taken (April to May 2007). Another 56% expect to grow their IT staff in the next 12 months. When this question was asked only eight to nine months earlier (August 2006), 48% said they had sufficient staffing levels and only 45% expected to add IT staff in the subsequent 12-month period.

The survey also found that different HR strategies seem to yield different full-time staff turnover rates. As the chart below demonstrates, companies that use a pay-focused strategy end up with double the staff turnover of those that use a human capital investment approach. A human capital investment approach is characterized by long-term staff development, career development and job stability rather than professional achievement and compensation.

Only a minority of companies says they practice a pay-focused HR approach (the approach that clearly yields the highest staff turnover rate), which is good news. Obviously professionals can be recruited by offering top salaries, but it’s a risky technique as those same employees may eventually move on to companies that can offer more exciting projects and more money and perks. According to the survey, the most common reason that IT staff members left over the past three years was for "better pay or benefits."

IT Unemployment Remains Low; Wage Growth Outpaces the Market

Today’s high demand for IT workers is demonstrated by persistent low unemployment rates coupled with growth in wages that are considerably higher than those of the overall economy. The unemployment rate for most IT occupations was less than 2% compared to the overall unemployment rate hovering at 4.5% during the second quarter of 2007. The lowest unemployment rate was for network and computer systems administrators, perhaps reflective of the increased demand to harden IT security systems.

While wages for all workers in the private industry rose 4% in May 2007 from a year earlier, pay in many IT and high-tech related sectors was generally higher. These wage increases are no doubt reflective of the higher demand for workers in these areas. Compared to a year prior, wages were up 6.3% for workers in the computer systems design services sector and up 5.8% in custom computer programming services.

However, wage changes in IT/high-tech-related manufacturing sectors were mixed with some sectors dropping and others on the rise. With wages in computer and peripheral equipment manufacturing decreasing 6.2% over the past year, the debate about offshoring will likely not abate. Pay in the semiconductors and electronic components sector was up 8.6% while wages in the communications equipment manufacturing sector were up by only 3.7%.