Savvy Strategies for Attracting and Keeping IT Workers

Savvy Strategies for Attracting and Keeping IT Workers
by William H. Wallace, Jr.

When the University System of Georgia (USG) felt the IT staffing squeeze, its Board of Regents ordered a study of IT worker recruitment and retention practices throughout the system, the public sector at large, and the private sector. The result was a set of recommendations that reflects some strategies more familiar in the corporate world than in higher education but tempered by USG's resource constraints.

During the course of research to identify strategies to recruit and retain in formation technology (IT) workers within the University System of Georgia (USG), a colleague who transferred from the corporate human resources arena to the higher education human resources arena made a telling observation. He noted that when a position remains vacant for more than three days, a corporation views the lack of activity in terms of unnecessary costs. Conversely, a college or university views it in terms of savings.

What is the significance of this philosophical difference in the approach of business and that of higher education to employee recruitment and retention strategies? The answer might be found by analyzing the stiff competition for IT workers. National data on IT worker trends help put this competition in perspective and suggest that recruitment and retention strategies traditionally found within the higher education community probably will be inadequate to meet the community's IT staffing needs (see sidebar next page).

Earlier this year, an IT task force at USG recommended some strategies more commonly found in business and industry. The strategies do not represent "pie in the sky" dreams; rather, they reflect fiscal and other realities documented through a survey of IT worker practices and policies at USG institutions, the findings of which are highlighted below. The data collected by the task force are useful to other colleges and universities because they represent the minimal data that those institutions should amass before they rethink their own IT recruitment and retention strategies. To the extent that the data reflect the general circumstances of other institutions, they also are useful in suggesting investigation of specific strategies.

Some of the task force's recommendations, enumerated below, are far-reaching. Many recommendations will require legislative review and approval by the state of Georgia. Notably, task force members unanimously supported the recommendation that any recruitment and retention strategies adopted for IT workers be applicable to all categories of employees.

USG IT Task Force

The University System of Georgia--three research universities, one medical college, fifteen regional universities, and fifteen two-year colleges--has been actively involved with two major technology initiatives over the past few years. Significant resources have been devoted to the selection and implementation of a student information system and a human resources/payroll/financial system. Given USG's increasing reliance on technology to improve operations, the system's ability to recruit and retain highly skilled IT support personnel has emerged as a critical issue.

In August of 1997, the administrative central office of the USG Board of Regents selected human resource and IT professionals to serve on a task force to analyze the current IT hiring policies and practices of member institutions. In addition, the task force was to investigate IT recruitment and retention practices and trends in the higher education community, the public sector at large, and the private sector. Finally, it was to submit recommendations to improve USG's IT recruitment and retention strategies.

Within a few months, the task force developed and mailed a survey to all USG institutions. Among the areas investigated were (1) percentage of institutional operating budgets allocated to information technology; (2) composition of IT workforce, including number of student workers; (3) assessment of employee turnover rates, reasons for employee termination, and identification of external employers hiring USG IT personnel; (4) factors inhibiting an institution's ability to recruit and retain IT personnel; and (5) strategies that could improve recruitment and retention efforts. Readers are encouraged to contact the author to obtain a copy of the survey instrument.

Survey findings

The Regents Office of Instructional and Information Technology (OIIT) and thirty-one of thirty-four USG member institutions participated in the IT survey. The task force found that $159 million or 4.8 percent of combined operating budgets for the survey respondents was allocated to information technology in the 1997-1998 fiscal year.

During the same fiscal year, USG employed 2,278 individuals in IT positions, 64 percent of which were allocated to academic computer support and 36 percent to administrative computer support. Of these positions, 1,622 (71.2 percent) were permanent positions, 61 (2.7 percent) were temporary positions, and 595 (26.1 percent) were student positions. At four of the thirteen two-year colleges participating in the survey, more than 50 percent of all IT positions were occupied by students. At ten of the eighteen research and regional universities participating in the survey, more than 26 percent of all IT positions were occupied by students. The task force found that the larger the institution and the more complex its the mission, the greater the number of its IT position classifications.

USG's turnover rate for IT workers for the 1996-1997 fiscal year was 6 percent. Of the IT workers who resigned from or terminated employment with a USG institution during this year, 61 percent left for employment in technology-related businesses in the private sector. Another 15 percent transferred to other USG institutions or to other institutions of higher education, and 13 percent transferred to OIIT. The remaining 11 percent resigned or terminated employment for unknown reasons. Of those who left USG altogether, noncompetitive salaries and a lack of career advancement opportunities were the primary reasons for doing so.

During the 1997-1998 fiscal year, USG purchased client/server technology that operates in a Windows NT and an Oracle database environment. Consistent with the predictions of the Gartner Group (see sidebar), the system has begun to experience a significant increase in its IT worker turnover rate.

According to survey responses, IT positions at USG generally remain vacant for two to six months. Approximately 60 percent of USG institutions reported that the cost to recruit and employ an IT worker is about the same as that to recruit and employ a non-IT worker. But 40 percent of the institutions reported that the cost is higher for IT workers. The IT position posing the greatest difficulty in terms of recruitment/employment is programmer, followed by network support worker, systems analyst, and database administrator.

Survey respondents identified five primary factors that have limited their ability to attract and retain IT workers. Nearly all (94 percent) pointed to lack of competitive salaries. A little more than half (56 percent) cited the geographic location of the institution. One-third (31 percent) reported lack of institutional administrative support or of perceived need for additional IT workers. One-quarter (25 percent) specified lack of flexibility in stated minimum position requirements. And 13 percent cited a legislative mandate prohibiting the majority of IT workers from participating in USG's optional retirement plan.

The majority of survey respondents (81 percent) identified advertisements in local or regional newspapers as their most important recruitment source. More than half (59 percent) cited internal transfers and promotions. Recruitment and employment of students was valued by 41 percent of respondents, referral of applicants by other institutional employees by 34 percent, and advertisements on the Internet by 31 percent.

Recommendations

The majority of task force members supported recommendation of the following IT recruitment and retention strategies:

allocation of funds for IT workers upon approval of new institutional or system-wide building initiatives;

creation of revenue for new IT positions through partnerships with corporations;

reduction of number of IT position classifications and increase of pay ranges and flexibility in salary administration policies;

establishment of cooperative education programs with IT departments and granting of tuition waivers for students selected for such programs;

joint employment of IT workers by USG institutions in geographic proximity and proportionate sharing of the workers' salary and benefits.

The task force made additional recommendations in its final report to the USG Board of Regents. One recommendation that will require legislative approval involves USG employees' mandatory participation in a state-managed retirement plan. The state legislature has limited participation in the state's optional retirement plan (ORP) to specific categories of employees. Employees who are ineligible to participate in the ORP are required to participate in the state teachers retirement system (TRS). An employee must have ten years of creditable service to be vested in TRS. The task force, with the support and input of the USG Human Resources Advisory Committee, recommended that the vesting time in TRS be reduced from ten to five years.

The recommendations noted below would require approval only by USG and reflect the task force's recommendation that recruitment and retention strategies be applicable to all USG employees, not just IT workers.

Award non-recurring salary bonuses to employees who perform above and beyond the scope of their defined position responsibilities.

Allow USG institutions, within limits, to assist with the relocation costs of individuals offered positions in critical areas.

Implement a true "cafeteria plan" benefits program, which would provide a finite dollar allocation for each benefits-eligible employee, allow the employee to select only the benefits he or she desires, and redirect any remaining dollars to the employee's base salary. (The institution enjoys long-term financial savings from this arrangement because employer expenditures for employee benefits are fixed.)

Allow USG institutions to make mid-year employee salary adjustments to retain key personnel in critical positions. (USG currently prohibits mid-year salary increases for its employees without prior approval from the Central Office of the Board of Regents.) The adjustments would be made only when funding for them is available within the institution's operating budget and only with the approval of the institution president. Factors to be considered in making decisions about adjustments should include market competitiveness, individual job performance, work load analysis, and personnel training and replacement costs.

Allow USG institutions to make tuition remission and reimbursement (TRR) available to all benefits-eligible employees (not just full-time benefits-eligible employees, as currently is the case) and to students majoring in critical IT disciplines if the students are willing to participate in a work internship program within a USG institution.

Explore opportunities for partnerships with companies that have expertise in recruiting and retaining professionals in highly competitive occupational categories. Agreements could be drafted to ensure that the business interests of both parties are protected.

Establish a permanent cross-functional and cross-discipline work group to address IT recruitment and retention issues and invite representatives of the private sector, state agencies, and state legislators to participate in discussions of these issues.

Postscript

On November 11, 1998, the USG Board of Regents approved four changes to the USG personnel policy to address the system's IT worker emergency. First, the earnings limitation on the rehiring of retirees will be changed to allow retirees to work up to one-half of a full-time schedule. System institutions will be required to absorb the additional costs entailed by this change within their existing operating budgets. Second, these institutions will be given greater flexibility to redirect internal funds and adjust salaries on the basis of market and employee turnover considerations. Third, they will be allowed to make mid-year salary adjustments, on an exception basis and without prior approval, to retain personnel in critical and strategic positions. Again, the institutions will have to fund adjustments within existing operating budgets. And fourth, the current policy of allowing system institutions to grant extra compensation to faculty will be extended to IT personnel. IT workers will be permitted to earn extra compensation for work performed in addition to normal duties when no other qualified person is available to undertake the work. The Board of Regents will review the costs associated with these changes in two years.

The IT task force has presented a plan for implementation of its other recommendations to the board's administrative central office. One of the most creative of these recommendations is an "80/20" program. Through this program, IT workers would fulfill 80 percent of their work commitment in the USG institution in which they were hired at an agreed-upon institutional salary figure and the remaining 20 percent of their commitment in any USG institution at the prevailing market rate of pay. Each IT worker's areas of specialization would be logged into a database, which USG institutions would search when they required a particular type of IT expertise. The proposed program, which would necessitate legislative review and approval, is premised on the realization that USG institutions are better served by guaranteed access to IT workers at less than a full-time work commitment when the alternative might be loss of these workers to external competitors. The recommendation that the task force will support with the greatest vigor is the one that its members unanimously endorsed: make all recruitment and retention strategies adopted for IT workers applicable to all USG employees.

Sidebar

NATIONAL IT WORKER TRENDS

Job growth in IT fields now exceeds the production of talent. Consider recent findings of the U.S. Department of Commerce's Office of Technology Policy.¹ For the 1994-2004 period, the United States will require more than one million new computer scientists and engineers, systems analysts, and computer programmers. This figure translates into an average requirement of 95,000 IT professionals annually. Yet in 1994, only 24,553 students in the United States were awarded undergraduate degrees in computer and information sciences. And although graduates of computer and information science programs tend to be talented and well-versed in theory, they generally lack formal instruction in networking/distributed computer environments and experience with large software projects.

Research by the Gartner Group² suggests that retaining scarce IT workers is becoming more difficult. The annual turnover rate for such workers traditionally has been 6 to 10 percent in North America. Today, however, this rate hovers between 12 and 20 percent. For organizations that operate in a Windows NT or Oracle database environment, the turnover rate often is higher. Organizations implementing client/server technology could experience a 10 to 30 percent shortage of IT staff. High turnover in the IT labor market probably will continue until 2003 or 2004, when demand for IT workers is expected to slow and supply of such workers is expected to increase.

The Gartner Group surveyed many IT workers about their reasons for leaving organizations. Respondents identified (1) a lack of acknowledgment or recognition; (2) salaries for workers who fill recently vacated or new IT positions that generally are 10-35 percent higher than those of long-term IT staff members; (3) inflexible salary administration practices that cripple organizations' competitiveness in the IT labor market; (4) a lack of career path options; (5) inadequate, insufficient, or inappropriate training; and (6) organizational atrophy or disarray.

¹ America's New Deficit: The Shortage of Information Technology Workers (Washington, D.C.: Office of Technology Policy, U.S. Department of Commerce, 1997), 3-33.

² Gartner Group, "Management Strategies and Directions," Research Notes, 28 August 1997, 3-22.

William H. Wallace, Jr. ([email protected].) is Director of Human Resources at Kennesaw State University in Kennesaw, Georgia.

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