How to Win the Talent War

Times are good for technology workers looking for a new job or just entering the workforce. Already one of the fastest-growing industries in the U.S. economy, the tech sector will continue to expand, thanks to the ongoing innovation in computer systems design.

According to the U.S. Bureau of Labor Statistics, employment of computer programmers and information systems experts is expected to grow faster than the average for all occupations through the year 2014. Consequently, the demand for managers to oversee these workers and systems administrators will also increase.

In addition, replacements will be needed for info-tech workers who retire or move into other occupations. Unemployment for skilled IT professionals is currently less than 2 percent, experts say, and situation will only tighten over the next 10 to 15 years as baby boomers retire from the workforce.

The Coming Talent Gap
At the same time, there has been a marked decrease in the number of people graduating from school with technology degrees since 2000, studies show. "My hypothesis is that IT has been less of an attractive area after the dotcom bubble burst," observes Katherine Spencer Lee, executive director of Robert Half Technology, a staffing firm in Menlo Park, Calif.

"It is absolutely getting more challenging -- not only in the identification of the right talent but the attraction," says David Bair, national vice president of KForce Technology Staffing in Tampa, Fla. "The reality is, the number of individuals available to do the jobs is not enough. There continue to be gaps."
Tory Soli, president and senior managing partner at I.T. Staffing Services in Phoenix, Ariz., offers another theory on the unsatisfied demand for IT workers. "A lot of companies outsourced to India and got cheap labor, but found it wasn't working [that well] and are taking things back in-house,"' says Soli. (article continues)

Attracting the Best and the Brightest
IT managers are already preparing for the coming talent war. Interestingly, while money is an obvious lure, it's not an automatic deal-clincher. The winning strategies to attract the best and the brightest are more varied than you might think:

  • Give IT professionals the opportunity to work on cutting-edge projects Bair says that IT staff want their skills to stay current, and if a company "isn't bringing in new modules or tools, then their skills are going backwards." His advice: "Move to the latest versions of tools or applications."
  • Be willing to accept less than perfection "You can't expect one person to do everything. An application developer is a programmer; don't ask them to maintain the system," advises Soli. "If you want 10 things out of this person and they only have nine, add a little more flexibility and look at the person's softer skills." Also consider taking a chance on recent graduates who can grow with solid training.
  • Write a job description that stands out  Bair suggests writing a job description that differentiates your company from the others. "You have to sell what you have as an organization. It's not enough to say 'I need a Java developer.' Say, 'I need a Java developer who can come into a dynamic organization and can deliver on a cutting-edge web portal,'" he says. "Get more creative in how you [develop] a marketing campaign around open positions."

Don't just round up the usual suspects. Look for talented workers by leveraging current staff who belong to user groups and key professional organizations. "It behooves you to have people in your organization who can network and identify those individuals who may be looking," says Bair. Offer referral bonuses as well. (article continues)

Strengthen Retention Strategies
Turnover is expensive. According to a recent Harvard Business Review article, the fully loaded cost of replacing a worker who leaves (excluding lost productivity) is typically 1.5 to 2.5 times the worker's annual salary. In a tight job market, companies can't afford environments that people don't want to work in.

There are three primary reasons people stay with an employer:

  • They like the boss they work for "Retention starts by having thorough training programs for your leaders so they know how to motivate, mentor, lead and train individuals underneath them," says Bair.
  • They want to know they can grow  Employees want a clear career path that enables them to build a future with the company. Organizations need to create strong career development programs that build in the opportunity for new initiatives and challenges.
  • They want to keep learning  Employees like to keep their skills up to date. "Investing in new technologies is one of the most underestimated retention tools there is," says Bair. "People will realize their company is trying to stay cutting-edge."

Another way to retain good people is to create an environment that is fun and makes their overall life easier, which can be done for little or no cost. Google is frequently cited as an example of a company that offers free food, transportation, flexible hours and the ability to telecommute -- not to mention a coin-free laundry room in the Mountain View, Calif., office. Having Ping-Pong tables and latte machines at the office can't hurt, either. Even if you can't pay competitive salaries, Soli suggests offering potential employees extra vacation time.

As the IT talent war heats up, companies will need incentives to attract and retain the right people. Don't underestimate the power of painting a positive picture of the functional and business skills the person can gain by working for your organization and how the experience will lead to greater opportunities in the future. Just be sure to turn that rosy picture into reality. Broken promises are the surest way to lose your talent today -- and leave you in the lurch tomorrow.

Hire Your Replacement

Succession planning is a long-honored practice in human resources (HR) circles. But although it's standard for organizations wishing to buffer themselves against the untimely departure of their most senior IT executives, it's a relatively rare action for enterprises to take on behalf of their low- or mid-management IT positions.

Why not initiate your own personal succession planning? That's right -- actually finding, hiring (if necessary) and training your own replacement. Although that might have seemed like a risky proposition 12 months ago when IT jobs were scarce and pay raises seemed like little more than rounding errors, today it might be the best thing you can do to advance your career." Given today's shortage of qualified IT workers, grooming your replacement is a very solid strategy," says Mark McManus, vice president of IT research at consulting firm Computer Economics in Irvine, Calif.

Show What You Know
Training a prot

Boost the Chances of IT Budget Approval

Successfully surviving the budget process requires more than just shouldering past competing departments and technologies. To hit the jackpot in a steadily dwindling pool of IT funds demands a different way of thinking. In addition to determining a cogent list of reasons to get what is needed, you also must learn to deconstruct the drivers behind the process.

Chief Considerations
You need to learn what pressures drive your CEO's, CFO's and CIO's funding decisions, then propose ways to relieve those pressures. "Find out where the biggest constraints exist," counsels Kevin Verde, CIO, Jason's Deli in Dallas, Texas.  "Is it staffing? Is it mindshare or focus? Is it dollars? Is it server-sprawl? Is it risk tolerance? Is it complexity? Ask questions and know your CEO, CFO and CIO well. Then, appeal to those perceived constraints within the request."

The priorities of the CIO, CFO and CEO may differ. It's vital that your budget strategy take account of all three and incorporate them into a solid, focused proposal. "Find the common ground, which is an understanding of the business, the business strategies, and the goals and objectives of the corporation," advises Bahija Noell, vice president of the Business Partnership Management Office in the Information Technology Division of Aflac, the insurance giant headquartered in Columbus, Ga.

As long as the CIO and the business leaders agree that technology initiatives must align with the corporate business strategies and bring value to the (article continues)

shareholders, customers, field force and employees, then gaining support to move forward with technology initiatives and securing a place on the business project roadmap becomes relatively easier to achieve, adds Noell.

Find Allies
Aligning IT initiatives with enterprise goals, however, is only one part of a successful budget strategy. Interpersonal communications and relationships can boost you to the front of the line - or boot you to the end - quicker than the time it takes to present your business case.

Measuring the pulse of the organization calls for effective communication between IT and other departments. "Because technology investments often involve large expenditures, the trend is for more shared governance over the decision-making process," says Jennifer Pitts, assistant professor of Computer Information Systems Management at the Turner College of Business at Columbus State University in Columbus, Ga.

With business managers as well as IT managers justifying the value of technology investments, relationship building must occur across several disciplines. The good news: "This trend has helped overcome some of the challenges commonly associated with technology decisions being driven by politics versus strategy," says Pitts.

Weigh Hard and Soft Costs
Although interdepartmental relationships are a key factor in clearing budget hurdles, they do not trump the importance of a fundamental business case. "Technology projects that cannot be cost-justified or are not aligned with the company's strategy are generally not resourced in terms of funding or personnel, regardless of the corporate politics," warns Pitts. (article continues)

A continuous and iterative dialog between the CIO and the IT and business managers helps articulate underlying budgetary considerations and head off unpleasant surprises. An unexpected bonus: While some of the ideas brought forward may not come to fruition, discussing them enables everyone to have a better understanding of the organization's financial situation and to move a step closer to learning what is likely to be approved, says Noell.

For example, finances may not be the deciding factor in okaying an IT project. "For me, dollars are not the only thing that must be budgeted. For every request, I have to factor in any new project's impact on our departmental focus," says Verde.

If your proposal is truly based on a strong business argument that addresses upper management concerns, it is more likely to be included in the budget without delay. But even if it gets shelved, a well-researched approach may make future budget requests more successful. "Clear-cut, bottom-line thinking -- the slam-dunk case to save money or improve how we can serve our customers -- wins every time," says Verde. "Back up the case with hard facts and prove the results afterwards, and future requests will likely be met with less resistance."

Five Measures of Management

Too little management can leave IT stalled; too much can choke it to a standstill. The trick is to find that magic balance that enables the whole IT department to chug steadily forward like a well-oiled machine.

Historically, IT departments tended to be organized in layers. "That model doesn't much exist anymore," says Colleen Young, vice president/distinguished analyst at industry analyst Gartner, in Stamford, Conn., mainly because the layers typically were top-heavy, suffocating the workers beneath.

Young advises mid-sized businesses to have no more than three to five people reporting directly to the CIO; large or global businesses should cap the number at five to eight direct reports. Each of those reports can optimally supervise between 15 to 20 workers, or up to 35 workers per supervisor in multi-disciplinary teams. "Beyond the 1:35 ratio, you are in danger of imploding," she says.

Flattening the layers may not weed out every obstacle IT has to trudge through, but a streamlined structure leads to fewer snarls. "The flatter the organization, the better. And smaller teams work better as well," says Bobby Cameron, vice president and principal, IT Management, at Forrester Research in Boston, Mass. (article continues)

That's because smaller IT teams often take a more entrepreneurial approach to problem solving. The IT department of Jason's Deli, a multi-million dollar, multi-state chain of restaurants headquartered in Dallas, Texas, is composed of a CIO and 11 staff members. "Each person is essential to the business and the group is very much on its game," says Lee Greer, marketing director. "For example, when one of our delis loses its Internet connection and can't get customers' online orders for delivery, our IT staff is immediately aware of the problem, and will either send the orders to the affected deli's fax machine or call them in. They make sure nothing interrupts our business."

Young says this is the ultimate advantage of the newer management structures. "A flat but multi-disciplinary structure allows you to have line-of-sight to results. It means fewer managers, self-empowered teams and more seamless operations."

The New World Is Flat
There are three basic structures in this new IT world: centralized, decentralized and federated. Each has its own set of advantages and disadvantages. The solely centralized model runs the risk that new developments can disappear into the black hole of a functional silo, while the typical decentralized model often spawns repetitive functions and concomitant costs. "The federated model tends to have the new development function spread out across the firm with infrastructure operations increasingly becoming a central/shared service and with a line from local-to-central IT for strategic functions like the CTO and the office of the CIO," explains Cameron.

IT managers needn't be bound to one specific structure. There is an infinite number of combinations blending characteristics from all three. (article continues)

What is the ideal management structure for your organization? Young, Cameron and Greer agree that the best IT management structure parallels the business structure. "The management model defines what is optimized, what innovation is emphasized and where the revenue will be optimized," notes Young.

No matter which structure you choose, it should encompass five fundamental IT practices: infrastructure operations; new technology development; IT relationship management; architecture, planning and strategy; and the responsibilities of the office of the CIO -- human resources, finance and training.

Don't fall into the trap of making management structural decisions based on personalities. "The tendency in small-to-medium firms is to organize based on personalities instead of by role or IT process," warns Cameron. "Placing all architecture under the infrastructure operations manager makes it so that development has to come to ops for direction. This results in strange accumulations of responsibilities that create poor flow of work."

Five Measurements That Matter
There are five measurements that management can use to evaluate and plan IT staffing, regardless of the model:

  • Employee time worked
  • Staff turnover rates, both compared as a trend over time and against local HR trends
  • Annual SWOT (Strengths, Weaknesses, Opportunities and Threats) analysis, as analyzed by the IT and business staff
  • Performance against specific objectives for quality and expense improvement
  • Calculation of work done per dollar spent per user

In the end, good IT management boils down to adopting a structure that enables the entire department to distinguish busywork from profitable production. "You must be flexible enough to be able to react quickly to situations, but structured enough that nothing falls through the cracks," says Greer.

Purchases, Negotiations and You

In the IT world these days, creativity frequently caves to pragmatism. To survive and profit from the converging and merging evolution of IT advancements, in-house proprietary and legacy systems have largely succumbed to out-of-the-box and off-the-shelf solutions. This situation is increasingly forcing IT pros out from behind their computer screens and over to the bargaining table.

Does that mean the process must be combative in an attempt to achieve the desired results? Not if you really want to get what you need. 

"Negotiation is not a game of war, or tic-tac-toe, or one-upmanship," says Anthony Bosco, vice president and CIO of Day & Zimmermann, a Philadelphia, Pa.-based business services company. "You don't need to strong-arm the guys across the table. They do not have the power to make the decision anyway. Instead, arm them with information -- ammo really -- so they can take it back to their bosses and get what you actually need."

Build a Team
Many top CIOs believe that the negotiation process is about forming a team all around the table. According to Scott Griffin, vice president and CIO of Boeing Information Technology in Seattle, Wash., "A good strategic partner wins as much in the deal as you do, and you both are happy." (article continues)

That is not to say, however, that all vendors will approach the bargaining table with an equal sense of benevolence. "If they lack passion for all things past the sale, or they insist on peddling their products and services as-is rather than help you make it work from your perspective, you probably need to walk away," advises Bosco. "Competition is so strong today that you should be able to find a quality vendor that will truly help you."

There can also be legal ramifications that can upset a deal, so you'll want to be sure that what is written matches what is spoken. "Value added services are the most important thing to look for in a deal," says Ben Finley, senior partner of Finley & Buckley, P.C., a law firm located in Atlanta, Ga. "Just make sure all those promises make it to the paperwork."

IT professionals who routinely win at the negotiation table and avoid bottom-line blunders know that success centers more on "buying in" than buying bargains. "It's about getting the best value for the company, which does not always mean the lowest unit price. It means lowest cost of ownership," says Boeing's Griffin. "We had a supplier win a contract by coming up with the best bid for cost of ownership. We were able to get a lower cost of ownership, and they were able to get more revenue." (article continues)

Know the Right Moves
Here are top tips for having a successful negotiation regardless of which technology you're shopping for:

  • Buy bulk "Boeing consolidated IT operations in 2004. As a result, we were able to aggregate our IT spending and get better pricing," says Griffin.
  • Play big "We believe in IT standards, so we do well when we are one of a supplier's ten largest industrial customers," says Griffin.
  • Add value "Sometimes the value-added services from the vendor can actually outweigh the core product or service you are buying," says Finley. "Make sure you consider the big picture and not just the deal parts."
  • Sweeten the deal "There is more value to the vendor than just the sale," says Bosco. "If you offer to be a showcase account for the vendor or to introduce them to your colleagues at other companies, vendors will often reduce their price in exchange."
  • Do your homework "You lose credibility if you try to beat up a vendor with something you are not really knowledgeable about," says Bosco. "Know what you are talking about, know what a fair price is, and know what the industry is moving towards in general before you enter negotiations."
  • Study the details "If you have good value data from suppliers, the data will set you free," says Griffin. Get comparative data about competitors, third-party evaluations and comments and verifiable quantitative information. Your knowledge will set you free when you have in-depth, reliable information on which to make your decision.
  • Read the contract "Ultimately, the deal is what is written on paper, not what you discussed in negotiations," says Finley. "Read the contract; have legal counsel read the contract. If the paperwork isn't correct, go back to the table and fix it."

Remember that negotiation is a method of problem solving and a means to add much needed products, services and resources to your IT arsenal.

"At the end of the day, both sides have to have exactly what they need to stay in business," says Bosco. "If you force a vendor too low, they won't be there to service your account later and so you will only have hurt yourself." And you'll only find yourself at the bargaining table again -- perhaps way too soon.