Retaining IT employees by being the "Employer of Choice”

1. Retaining IT employees by being the "Employer of Choice” Andrew Strathdee - Director, Corporate HR Partners Ltd.

2. Home Truths • Retention is a voluntary act - employees stay because they want to • People will leave…..the questions are when and why

3. Key Questions • What makes us attractive as an employer? • What are we doing which makes employees dissatisfied? • How are other organisations dealing with the problem? • How do we hang on to our employees ……and longer?

4. Competitor Information • Competitor Strategies - Towers Perrin Survey of over 300 European Co's - Spring 1997 • Reward and Retain Best Performers • Link Pay to Organisations Key Success factors • Achieve/Maintain Market Competitiveness • Pay for Competence • Reward High Productivity, Quality and Customer Satisfaction

5. What was being done? • Introduction of variable pay • Reviewing Performance assessment and appraisal and linking to pay and Career/skills development • Reviewing pay and grading structures • Extending Job/Role Evaluation • Reviewing benefits, Terms and conditions/Perks as part of Total Compensation • Introduction of Share Schemes

6. Why the Change? • Business Model is changing • Globalisation of markets and technology • Move to Customer and Quality Focus • Address Performance Linkeage • linking pay to business performance • Competition for Staff • The demographic time bomb is still ticking.… • Need for Flexibility • Improve Competitiveness

7. Why the Change? • Perceived Need for Better Pay differentiation based on performance • Reflect flatter organisation structures • Respond more rapidly to organisational change • Reflect broader employee roles • Enhance ability to value individual skills and competencies • Increase flexibility of base pay

8. Employer of Choice • However, whilst.....… • Employee Commitment was seen as vital • People were seen as the differentiating factor • Winning Employee Commitment was the major reason for introducing changes to reward • There was • Little consequent improvement reported in employee commitment and morale • Hardly any changes introduced with the benefit of employee consultation - only 12% reported doing this........... Are we surprised?

9. Being the Employer of Choice........ • Employees need to be part of solution • We need to listen to them • We need the data - look at Opinion Survey Results as well as • Focus Groups • Manager Reports • HR Statistics • They tell you the hot issues - we all need to address them.

10. Employee's perceptions at Lotus • Growing Up Lotus... learn to be a big corporation without losing sight of the core values that make Lotus unique. • Effective Management... ensure that managers are as skilled in managing people as they are in developing software. • Customer Connection... bridge the gap between what employees know about satisfying customers and what Lotus does to effectively deliver that expertise to those customers. • Market Attention... stay ahead of competitors through smart investments, aggressive marketing, and wise use of resources. • Valuing the Individual... provide fair reviews and reward programs, alternative career development options, inclusive communication, and consistent administration of policies and programs. Source - Towers Perrin Lotus Opinion Survey

11. Employee's perceptions - why choose Lotus? • Lotus... Keep "being Lotus" without losing sight of the core values that make Lotus unique , ie. not bureaucratic, delegates decision -making. • Effective Management... Develop Managers who have time to consult, coach, listen and lead - management is a skill which needs time and training. • Winning Team... stay ahead of competitors and building public image that makes you proud to work for Lotus. • Valuing the Individual...Offer training and career development options, inclusive communication, consistent administration of policies and programs and facilitate the integration of work and family. • Pay and Benefits...Not generally an issue Source - Towers Perrin Lotus Opinion Survey

12. Employer of Choice - Employee's perceptions Q? What would most likely help to retain good performers? % selected Better career advancement opportunities 27% More effective management of people 20% Better pay and benefits 15% Less work pressure and stress 10% Access to the latest technology Technical Source - Towers Perrin Lotus Opinion Survey

13. Employee’s Perceptions Which one item would most likely result in retaining good performers at your company? (Result in Percentages) Source: CHRP/Hayward Survey - 1999

14. Employee’s perceptions The following six items could motivate you to do your best work. (Divide 100 points between the six elements, giving the most points to the items that motivate you the most, and the least points to those that do not. You may put all your points on one item, but your total must = 100.) Source: CHRP/Hayward Survey - 1999

15. Employee’s Perceptions How do you rate your pay compared to what you believe other companies offer for similar work? Source: CHRP/Hayward Survey - 1999

16. Employee’s Perceptions How would you rate your pay compared to what others in your location doing similar work receive? Source: CHRP/Hayward Survey - 1999

17. Employee’s Perceptions How would you rate your benefits package compared to what you believe other companies offer? Source: CHRP/Hayward Survey - 1999

18. Employee’s Perceptions To what extent is your company successful in attracting and retaining the people it needs with its current pay and benefits package? Source: CHRP/Hayward Survey - 1999

19. Employee’s Perceptions To what extent do you agree that compared to other companies of the same size, your company will provide good opportunities for you to advance your career and develop your potential? Source: CHRP/Hayward Survey - 1999

20. Employee Perceptions In general, compared to other companies in your industry, how would you rate your company as an employer? Source: CHRP/Hayward Survey - 1999

21. Employee Perceptions Is it likely that you would look for a job outside your current employer in the next six months? Source: CHRP/Hayward Survey - 1999

22. Employee Perceptions Your Company is clearly changing for the worse or better? Source: CHRP/Hayward Survey - 1999

23. Aligning a New Reward Strategy ......The Deal Business - The Strategic perspective What the business requires to succeed Organisation - The Systems Perspective How the organisation operates, implements and manages Culture -The Employee perspective What employees need and perceive Source - Towers Perrin European Survey 1997

24. Building "line of sight" from business strategy to the deal

25. Employer of Choice The Deal - TheEmployee's Viewis Holistic - the elements must be taken together

26. Where do we go from here? • It's not Rocket Science - most of us have the right tools already....… • We have the Vision and the Mission, what we lack is the Delivery! • Employees are taking the holistic view of Reward, it is not just pay and benefits. • To be the employer of choice we need to meet those TOTAL reward needs.

27. So - how do we hang on to them...... and longer? • Know your Employee Profile - analyse the population, age • Review Market evidence internal and external • Identify quickly fixable problems - what are your employees thinking about……... • Pay • Grading • Training Commitments?

28. Performance Management • Develop effective objective setting process • Performance assessment and appraisal - link to pay and career/skills development - 6 monthly reviews • Ensure pay review and appraisal run with the business strategy and corporate objectives

29. People Development • Develop Career ladders • Involve Technical Management in the design and completion • Extend Technical ladders in all job families into dual ladders • Ensure recognition of technical contribution eg: Appoint Chief Technical Officer • Introduce a “Fellow Program” • Complete development plans for individuals • Improve employability

30. Training • Offer training materials as broadly as possible and encourage their use • Developed Certification programmes either Company eg MCSE or CLE or get external validation of internal programmes • Develop Learning Resources Centres • Contract and ensure delivery of agreed training • Monitor for improved performance after training • Target training activities • Identify training styles • Make learning an approved company activity

31. Communications • Make good use of the technology • Develop overall communicationsShotgun mails, Company News Online, Company Meetings via Video and Teleconferencing, etc • Ensure Technical and other support staff not treated as second class citizens to Sales and Marketing - give them a kick-off meeting too….

32. Home / Work Balance • Look at Parenting leave • Introduce Sabbaticals(eg Extra four weeks after 6 and 15 years service for a useful purpose) • Take your holidays programme! (New Idea!!!) • Keep an eye on hours worked.… • Monitor Holiday carry-over

33. Review Contracts • Look at Family Friendly policies • Flexible Working • Extend use of Variable/staggered Hours • Use the technology - remote working • Develop new contracts • Develop Home/Flexible working contracts • Experiment with Weekly/Monthly Hours contracts • Promote Job sharing

34. Manage Employees Better • Employees perceive the need for Managers to take responsibility for managing and communicating, so… • Conduct regular Managing People Training - make an essential programme • Increase profile of Managing people effectively • Make a key element of a manager's objectives • Introduce Good Management Awards - nominated by staff

35. Managing Better in practice...… • Better compliance with current procedures • Get tough about objective setting and appraisalsbeingcompleted and appraisals conducted on time • Salary reviews conducted and paid on time • Consider360 degree feedback, employee initiation • Make sure "Line of sight" with business objectives ismaintained in better written individual objectives • Ensure Manager is responsible for career development planning

36. Pay • Reviews Pay in line with business cycle (?6 monthly in technical areas) • Reward performance fairly against the criteria • Use Discretionary Bonuses (frequently budget under-used) • Variable pay - to link to business success • Stock schemes to link reward to Business growth • Incentives Schemes

37. Recognition • Develop recognition mechanisms • 100% and Achievers Clubs • Awards - Wizard etc. • Team and Individual Recognition • Use more small awards • Dinner for two etc • Shopping Vouchers • Events • Bottle of champagne

38. Benefits • Review against total remuneration model • Allow more flexibility within the model • Give more choice in Pensions - especially investment choices • Make Car leasing widely available

39. For the Future? • What about time management as a motivator? • Encourage family responsibilities to be considered in objectives - not just "work" based? • Improve communication and report back and involve at all levels - staff report back sessions • Publicly recognise good work outside the Company?

40. Conclusions • The solutions are not simple or complete - they are a complex mixture of doing many things better • Reward is much more than pay and benefits • Career development, skills development and improving employability are crucial • Know your employees and listen • Retention is better than recruitment, even if only an extension of length of stay • Make sure leavers are friends of the organisation