Perk watch: fancy cars are out, bowling is in

A rose finally did it.

Competing IT services firms in Michigan had been doing everything they could to move in on The Epitec Group Inc.’s growing IT services business. Underbidding on IT staffing contracts. Wining and dining corporate accounts. Even making plays for the company’s IT talent.

So when Holly Maguire, manager of employee relations and “maestro of corporate harmony,” discovered that every one of Southfield, Mich.-based Epitec’s programmers and consultants had been presented a single rose and offered a free lunch by a competing IT services recruiter, she was forced to act.

After making several phone calls to the competing firms’ management – in effect, telling them to cease and desist – Maguire met several rose recipients for lunch to chat about their jobs and future prospects at Epitec.

The lesson: It’s critical to stay in touch and keep key IT talent happy.

Maguire acknowledges that belt-tightening has made it tough to find new ways to keep personnel content without breaking the bank. “We’ve never offered enormous monetary bonuses, but we do try hard to keep our IT professionals happy,” she said. The company uses fairly inexpensive employee appreciation initiatives.

Other businesses are working harder to keep communication lines open, delivering straight talk about corporate performance to help IT employees understand, first, how well or poorly the company is performing and, second, the impact of their contributions on the business.

For example, Cognos Inc., a business intelligence software company in Ottawa, recently staged a few in-house events during which a marketing executive spoke to the IT department to describe how recent networking and software improvements had radically improved productivity for marketing executives in Australia.

Another senior executive talked about how an upcoming upgrade of Cognos’ database to Oracle11i will dramatically improve shipping and distribution processes within the company.

The reason for the communication? After months of bad news about layoffs and other economic declines, “we wanted our employees to know we understand they are working hard, and we appreciate their efforts,” said Rob Collins, CIO at Cognos.

The significantly scaled-down bonuses, perks and incentives that budget-strapped companies have to offer these days are keeping IT workers on board – for now. At Epitec, for instance, an account representative visits each IT consultant once a month to talk about work or air grievances. The corporate newsletter lists employees recognized by peers for outstanding work.

An “award patrol” delivers special plaques and balloons to those who have earned praise on the job. The company hosts an employee appreciation month featuring events like office-wide pizza lunches and family bowling nights once a week for four weeks. And IT staffers receive gifts for staying with the company, such as a leather portfolio after three years and a watch at 10 years.

In addition, while some companies have cut, Epitec actually added some this year.

Now the company boasts a 98 per cent project completion rate – which means IT staff assigned to specific projects either complete those projects or are hired by the client again 98 per cent of the time – a statistic that Epitec said is unrivalled in the IT services industry.

Keeping IT talent on board is no longer solely about stock options and designer coffees. It’s important to provide work/life balance, say analysts and recruiters. And it’s “even more critical to connect an IT professional’s job to specific business goals to improve your chances of retaining top IT talent,” said Phyllis Klees, a partner at Deloitte & Touche LLP’s Human Capital Advisory Services practice in San Jose, Calif.

At Cognos, the onus is on management to make IT personnel understand the importance of their contributions on the job, Collins said. And that’s not always easy to do. The lesson is that “the length of an IT professional’s stay at any company is most affected by whether he or she has a wonderful boss, good career growth opportunities and whether he or she is having fun,” Collins said.

He said many companies fail to retain employees “because they think when times are tough, we better shut up.” But he said that behaviour is completely wrong. “If you hide information from employees, hideous things like Enron can emerge. A culture of secrecy is not in anyone’s best interest,” Collins said.

Meanwhile, recruiters, human resources executives and CIOs say that although more IT professionals are available for hire, finding workers with the right skill sets to meet the increasingly rigorous demands set by corporations is difficult. “There’s more talent to choose from, but it’s still challenging to find those with the experience and skills to meet our corporate clients’ growing list of requirements,” Maguire said.

Analysts and recruiters also say some companies have taken advantage of the skills glut to vigorously upgrade their IT workforces – in many cases, they’re firing IT workers and hiring lower-cost but more-skilled people to replace them. And some who are still holding on to their jobs say having a job right now is compensation enough.

But CIOs and other recruiting experts worry that after months of layoffs and corporate belt-tightening, there will likely be much turnover as the need for IT talent rises, creating a talent shortage all over again.

The Information Technology Association of America (ITAA) in December reported that U.S. companies hired 359,000 IT workers between October and December 2002 and dismissed 211,000 IT employees, for a net gain of 148,000 workers. The total number of U.S. IT workers stood at 10.1 million last month, compared with 9.9 million in January 2002, according to the ITAA.

The bottom line: “Most IT professionals are tired of hearing continuing news about layoffs at companies like General Electric and Motorola,” said Maria Schaffer, an analyst at Stamford, Conn.-based Meta Group Inc. “If companies continue to operate purely in a cost-cutting mode, as soon as the economic situation improves, the best performers will leave.”