Strategies for Recruiting and Retaining Information Technology Workers: The Case of Lebanon

1. Strategies for Recruiting and Retaining Information Technology Workers: The Case of Lebanon By Toufic Mezher and Dima Sabouneh American University of Beirut Engineering Management Program

2. Introduction The last decade was marked by a technological revolution. This was due largely to the successful deployment of IT solutions in the industrial and service sectors and emergence of software technological parks (STP). This high demand for IT professionals has resulted in a global shortage. The objective of this presentation is to summarize the innovative recruiting and retention programs adopted by the successful IT organizations to solve the the shortage problem.

3. Introduction In Lebanon, the IT sector has become one of the most vital and advanced sectors in the country. New automated Telephone switches were installed by the Lebanese MPT. In addition, Internet service provider companies and GSM network operators emerged in the past 5 years.

4. Human Resources Management HRM is the utilization of human resources to achieve organizational objectives. Six functional areas are associated with HRM: human resource planning, recruitment and selection; human resource development; compensation and benefits; safety and health; and employee and labor relations.

5. Who is the Core IT Worker? The core IT occupations are: computer scientists, computer engineers, systems analysts, and computer programmers. The core IT occupations are differentiated from other IT-related jobs by significantly higher skill and educational requirements.

6. Who is the Core IT Worker? Computer Scientists: they generally design computers and conduct research to improve their design or use, and develop and adapt principles for applying computers to new uses. Computer engineers: they work with the hardware and software aspects of systems design and development Systems analysts : they work to help an organization realize the maximum benefit from its investment in equipment, personnel, and business processes. Computer programmers: they write and maintain the “programs” that list in logical order the steps that computers must execute to perform their functions.

7. IT Labor Shortage The term "shortage" refers to a "market disequilibrium between supply and demand". A shortage requires two things: an occupational market in disequilibrium and a slow market response. When a worker shortage occurs, employees and workers take various actions, some of which can be tracked statistically as indicators of the presence and severity of a shortage.

8. IT Workforce Shortage Assessment The followings are some indicators of IT labor shortage: Increased recruiting, overtime, reducing minimum qualifications, substitution of machinery for labor, training, bonuses, benefits, and a growing amount of IT work contracted.

9. Costs of an IT Worker Shortage Slow Innovation and Product Development Slowdown in Productivity Improvement Fill positions with people who are less than adequately qualified High Failure Rate of software projects Limit innovation and stifle competitiveness Increase in the cost of doing business High-wage jobs

10. IT Human Resources Management The ability to attract IT professionals with the desired skills and to retain them so that they may offer productive contributions is an outcome of the human resource and work practices employed by an IT organization. Due to the severe shortage and high turnover rate of the IT professionals, getting and keeping “the right person with the right skills at the right time” requires extraordinary efforts and innovative practices.

11. Alternatives to Recruitment Temporary and Contract Employees: employers can get the specific skills they need for a temporary project without hiring people that might need to be laid off later Outsourcing: allow the proliferation of technical consulting companies and staffing operations that can offer a wider range of opportunities to individuals.

12. IT External Recruitment The recruitment process usually begins when a manager issues a job requisition. The requisition is usually accompanied by the job analysis. Then, external sources for meeting the specified qualifications and skills are identified. The process is achieved by matching the skills of the applicants with the required skills using selection tools and interviewing.

13. Job Analysis of an IT Manager

14. Sources of IT Workers Four-Year colleges programs Graduate programs Competitors College Relationships Recruiting Firm Employee Referrals World Wide Web Networking

15. Selection Tests The tight IT labor market and increasing salaries are prompting the use of testing services. The selection tests include: job knowledge, work sample, and personality tests. Due to the variety of IT-related jobs, selection tests are specific for each position or occupation.

18. Interviewing The interview provides an opportunity for the employer and applicant to assess whether a match exists between an applicant’s qualifications and skills and the organization’s needs. It should include the following issues: Job-related information is discussed Job description is communicated to the interviewee Some work samples are shown to the applicant Topics like overtime, flextime, and compensation issues are discussed Communicate to the applicant the organizational competitive differentiator elements.

19. Retention Practices

20. Crafting an IT HR Strategy • In order to understand an organization IT HR retention strategy, we have to understand two factors: the length of the employment and needs of IT professionals: • Length of Relationship: Organizations seeking a long term relationship will invest more in career development and security. Organizations seeking a short term relationship expend additional resources on compensation and benefits. • Assumptions about Needs: Under the assumption that IT professionals are driven by professional achievement needs, practices related to concern for productivity are more heavily emphasized. Under the assumption that IT professionals seek a balanced life, a balance of practices from both strategic levers of concern for productivity and concern for the individual are used.

21. Crafting an IT HR StrategyLTI Strategy An organization following an Long-term Investment (LTI) strategy sees IT people as worth developing and retaining because of their specific knowledge and competencies relative to the organization. The organization believes that besides the need for professional achievement people have other short and long term needs to be maintained. The LTI strategy has more emphasis on practices related to career development and security.

22. Crafting an IT HR Strategy BP Strategy An organization following a Balanced Professional (BP) strategy sees the IT people as a scarce resource providing valuable contributions to the organization for a number of years. The organization believes that besides the need for professional achievement people have other short and long term needs to be maintained. BP strategy places more emphasis on practices related to the concern for the individual.

23. Crafting an IT HR Strategy HPP Strategy An organization following an High Performance Professional (HPP) strategy sees the people as a scarce resource providing valuable contributions to the organization, ideally for a number of years. The organizations following the HPP strategy do not consider building commitment and loyalty among professionals. Thus, IT workers may tend to experience stress and burnout resulting in high turnover rate.

24. Crafting an IT HR Strategy STP Strategy An organization following Short-Term Producers (STP) strategy sees the people as a scarce resource providing highly valuable contributions to the organization in short term. It believes that IT people willing and able to provide these contributions are driven by short term professional achievement and financial goals. STP strategy has more emphasis on compensation.

25. The 4 strategic levers Long Term LTI BP Length of Relationship Sought HPP STP Short Term Personal & Professional Personal, Professional & Security Professional Achievement Assumptions about Needs

26. IT Recruitment & Retention in LebanonThe Objective of the Survey Data were collected form 10 Lebanese IT organizations in three sectors using a questionnaire. This survey has several objectives: To show that there is a growth in the Lebanese IT sector despite the severe economic situation in Lebanon and there is a shortage in certain types of skills’ set To identify the organizations’ recruiting policies and the strategies used in external recruitment such as sources, methods, and selection tools To assess the extent to which each organization is applying the 11 retention practices in order to keep its employees.

27. Questionnaire Contents The questionnaire utilized in the survey contains 17 sections: Information about the Organization Information about the IT department Information about the IT labor shortage. Recruitment Interviewing Selection Tests Performance Appraisal Work Arrangements Human Resources Development and Training Longer-Term career Development Organizational Stability and Employment Security Financial Compensation Opportunities for Advancement Opportunities for Recognition Quality of Leadership Sense of Community Lifestyle Accommodations

28. The Surveyed Companies

29. IT Labor Shortage Half of companies stated that they have problems finding professionals in Web-related jobs (Web design using JAVA as a development tool and Web administrators). Half of them complained that they are having problems finding networking professionals (Designing/installing/ maintaining a LAN or WAN), Cisco products, UNIX and WinNT professionals. This can be attributed to the fact that there is a rapid change in technology and frequent changes in skill requirements, there are mismatches between what university teaches and industry needs, and a lot of professionals are immigrating to other countries: Canada, States etc where the working conditions are better. Two companies said that they lack low-level managers because they cannot find professionals that combine technical and supervisory skills.

31. Recruitment Practices (cont’d)

32. The Recruitment Practices (Cont’d) It is important to note that one company stated that it does not recruit women because of the nature of the work, which requires constant travelling. Two other telecom companies said that they do not assign to women duties like microwave installation d. Selection Tools Interviewing: All of the organizations admitted that they usually conduct an interview to assess the technical and personality skills, the experience and the educational background of the applicant. Only three of them mentioned that the organization’s strategy and policies (Challenging duties, compensation, and salary) are communicated to the applicant Selection Tests: None of the organizations has a prepared available technical or personality tests for the applicant. Usually, these tests are rarely conducted

37. Concern levels of the 10 organizations

38. Recommendations and Conclusion The IT Lebanese organizations are facing shortage in IT workforce. In order to overcome this shortage, many strategies can be adopted: creation of governmental practices, collaboration between universities and industry, retraining of the current IT workforce and innovative recruiting and retaining practices.

39. The Need for Governmental Initiatives It should continue to build an up-to-date information infrastructure. It should encourage the development of information technology parks by given incentives to the private sector. Incentives include tax breaks, low cost of lands and utilities, building educational institutions nearby, low communication costs, reduce governmental bureaucracy, change labor laws, etc. Information technology parks can help stop the brain drain from Lebanon. It should take the initiatives by using IT technologies in all its ministries and agencies by using local companies. It should reinforce the bureau of national statistics which should include information related to educational institutions and IT industry, e.g., existing companies, IT labor market including forecasting future needs, and other related information.

40. The Need for Governmental Initiatives • It should adopt programs for K-12 education that will lead to greater technological literary. This will enable a larger fraction of citizens to participate in and benefit from more productive working careers. • It should encourage continuous education and training for the workforce. • It should invest in basic and applied IT research. • It should help to strengthen traditional higher educational programs in IT related areas. The government can encourage colleges and universities to promote degrees to prepare students to meet IT industry needs. • It should encourage universities and industry to form a variety of partnerships to train the IT workforce.

41. New Higher Education Outlooks Universities should broaden their educational approach in sciences, in technology, and in the humanities and should educate students to be more sensitive to productivity, to practical problems, to teamwork, to the culture, institutions, and business practices of other countries. Create a new cadre of students and faculty characterized by (1) interest in, and knowledge of, real problems and their societal, economic, and political context; (2) an ability to function effectively as member of a team creating new products, processes, and systems; (3) an ability to operate effectively beyond the confines of a single discipline; and (4) an integration of a deep understanding of science and technology with practical knowledge, a hands-on orientation, an experimental skills and insight. The curriculum in business and engineering management schools should have strong emphasis on international management, technology management including information technology, and human resources management.

42. New Higher Education Outlooks • Establish a major interdepartmental research center on information technology between business and engineering schools. • IT curricula needs to develop faster than other disciplines and determine the types of training needed by employers. • Universities should provide additional incentives for faculty to encourage them to stay in academia and not go to the private sector. Incentives should include higher salaries and more research funds. • Business and engineering schools should form advisory boards from the private sector. This will increase the collaboration between the education and the private sector and will facilitate internship and other joint programs. • Try to form joint education and training centers with leading IT companies like Microsoft, Cisco, etc.

43. Retraining of the Current Workforce Cisco Equipment Training for network professionals Windows NT (Win 2000) skills’ enhancement UNIX knowledge enhancement for system administrators JAVA knowledge training for Web Designers Middle level Managers: if the company has a PFW policy then the employee having a bachelor degree should enrol in the university to get a Master degree in MBA or Engineering Management. These two programs are available in most of the Lebanese universities

44. Improvement of the Recruitment Practices The Internet recruitment should be more used. The internship method should also be used more often. Actually, three companies are using it. It is a cheap hiring method where the selection decision is more certain because the employee worked for a probationary period before getting hired. In the interviewing process, only 3 companies admitted that they communicate to the applicant the company’s differentiator elements. (organization’s vision, compensation, and training). Finally, selection testing (technical and personality) should be conducted more frequently. Due to the increasing IT salaries and IT shortage, a wrong hiring decision is highly costly for the company.

45. Improvement of the Retaining Practices Five of the surveyed companies are following the BP strategy while the other five are following the HPP strategy. In order for these companies to shift to the LTI strategy where the turnover rate is minimum all the surveyed 10 organizations must improve their practices in career development and employee security lever. The 5 organizations following the HPP strategy must improve their level of concern for the individual as well The three strategic levers: concern for productivity, Organizational Stability and Employment Security, concern for the individual must be adopted aggressively in order for IT companies to move toward LTI strategy.

46. Final Conclusion Collaboration between industry and universities is necessary to bridge the knowledge gap between them. Educational institutions are a good source for building knowledge and skills for future IT professionals and for the continuing education of existing ones. Retaining current employees is crucial to the continuation of work within the organization and offering good employees long term-contracts (3 to 5 years) is an additional good retaining incentive along with an above average pay. Companies should always strive to move toward the LTI strategy and periodically conduct a satisfaction survey because the needs to people are changing constantly.

47. Final Conclusion • IT companies should think global and try to get contracts from the international markets especially when companies in the US or Europe are outsourcing part of their work (e.g., Ireland and Indian experience). One advantage of Lebanese market is in its highly skilled professionals which are trilingual (Arabic, English and French). This give it an advantage over other regional countries. • The government should take the lead in building human resources in the country through legislation, constantly update the information infrastructure including building local networks connecting the country, building information technology parks including nearby educational infrastructure, and give more incentives to attract both local and international companies. These incentives should include tax break, cheap utilities and lands, cut on government bureaucracy, etc.