Attracting, Developing, & Retaining an IT Workforce

Presented to: Dr. LacityMIS: 6800 - Winter 2006

Presented by: Group 2

Kevin Burlage, Patrick Dunn, Tim Sullivan, Vyacheslav Mikryukov

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Table of Contents

EXCECUTIVE SUMMARY OF IT PRACTICES....................................................................................................3

THE FUTURE OF IT CAREERS....................................................................................................................................3THE IMPORTANCE OF CONTINUING EDUCATION.....................................................................................................3THE KEY IS GREAT MANAGEMENT & CULTURE.....................................................................................................4CASE STUDIES............................................................................................................................................................4

ATTRACTING IT PROFESSIONALS......................................................................................................................5

THE FUTURE IS BRIGHT FOR INDIVIDUALS WHO CHOOSE AN IT CAREER..............................................................5WHO WILL BE COMPETING FOR THE BEST AND THE BRIGHTEST IT TALENT?......................................................6WHY SHOULD U.S. COMPANIES BE CONCERNED WITH THE SUPPLY OF IT WORKERS?........................................6

U.S. Department Of Education, Bachelor’s Degrees Conferred.........................................................................6U.S. Department Of Education, Master's Degrees Conferred.............................................................................6

WHAT ARE THE HOT JOBS?.......................................................................................................................................7REDMOND MAGAZINE SURVEY.................................................................................................................................8COMPENSATION IN THE IT SECTOR - INTERNATIONAL PERSPECTIVE (MERCER’S STUDY)................................10

Bonuses and incentives........................................................................................................................................11The IT premium...................................................................................................................................................11The value of experience.......................................................................................................................................11

DEVELOPING IT PROFESSIONALS....................................................................................................................12

WHAT SKILLS AND COSTS ARE ASSOCIATED WITH EMPLOYEE DEVELOPMENT?.................................................12TRAINING LOCATIONS & TYPES.............................................................................................................................13WHAT ARE SOME OF THE MOST ECONOMICAL METHODS USED TO DEVELOP EMPLOYEES?..........................13

Computer Based Training...................................................................................................................................14Transfer Learning................................................................................................................................................14

HOW DEVELOPING VIA EVALUATIONS GUIDES TRAINING EFFORTS?.................................................................14WHAT’S HAPPENING IN THE DEVELOPMENT OF REAL WORLD IT STAFFING?..................................................14WHAT HOT SKILLS REQUIRE ADDITIONAL EMPLOYEE DEVELOPMENT?..........................................................15

RETAINING IT PROFESSIONALS........................................................................................................................17

ENDURING PRACTICES FOR MANAGING IT PROFESSIONALS...............................................................................172004 BEST PLACES TO WORK IN IT EMPLOYEE SCORECARD.............................................................................18CIO MAGAZINE STAFFING SURVEY.......................................................................................................................18CONVENTIONAL WISDOM OR REALITY?................................................................................................................19

CASE STUDIES..........................................................................................................................................................20

ANHEUSER-BUSCH...................................................................................................................................................20The King of Beers................................................................................................................................................20The IT Director perspective.................................................................................................................................20

EDWARD JONES........................................................................................................................................................22Wall Street comes to Main Street........................................................................................................................22The HR perspective..............................................................................................................................................22

ANHEUSER-BUSCH VS. EDWARD JONES.................................................................................................................24

CONCLUSION...........................................................................................................................................................24

References....................................................................................................................................................................25

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EXCECUTIVE SUMMARY OF IT PRACTICES

In the past 25 years, Information Technology (IT) has vastly changed the world we live in. The speed of change has been exponential, and the benefits fruitful for many. There is little doubt IT will continue to grow for decades. In fact, the U.S. Department of Labor projects many of the fastest growing occupations over the next 10 years will be in the IT sector. On the other hand, U.S. Department of Education data suggests IT graduation rates are not growing fast enough to meet market demand. It is no secret IT salaries have been rising for years and workers are reaping the rewards. In fact, the most experienced workers obtain premium compensation for there commitment to development. Great companies go beyond compensation and training to attract IT professionals. They recognize quality in leadership and culture are primary ingredients in the overall employee “satisfaction” mix. As such, companies need to be effective in all three components, attracting, developing and retaining IT professionals, in order to compete with the best.

The future of IT careers Although the IT labor force has experienced cyclical swings in previous years, the long-term forecasts are all the same. The IT revolution has changed the way business is transacted between persons, places and things. In his recent book, The World is Flat, Thomas Friedman claimed that the U.S. is quietly experiencing a labor crisis, and unless we invest in education for science and technology, the rest of the world will take advantage of our complacency.1

Given that the majority of companies are digital, in one way or another, they all need qualified IT workers to build and support their IT infrastructure. Consequently, companies will be competing for the same highly skilled IT workers from a relatively small labor pool. The challenge will be attracting the best and the brightest, yet managing escalating costs. In fact, a recent survey taken by Redmond Magazine, reported the average IT salary in 2005 was $68,5002

The importance of Continuing Education Understanding the importance of continuing education for a long-term IT career is essential for IT Professionals. Great employee development will not only attract IT professionals, but it will help organizations retain employees too. Companies can select one of three economical methods for employee development including computer-based training, transfer learning, and mentoring.

Procter & Gamble analyzes its IT staff’s work-life balance, cross-trains their employees, and sends them to a minimum of ten days formal training.3 Allstate Insurance Company searches for IT employees with varied skilled sets, and many employees have a combination of formal training, certification, communication and interpersonal skills.4 Additionally, Allstate’s IT department uses a variation of the Capability Maturity Model (CMM) documentation standards to track employee training & development. 5

Some of the best developmental practices from the real world include two weeks training per year in business and IT skills, quarterly bonuses, a healthy work-life balance, a fair reward system and strong communication skills. Organizations should reward employee development

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using a fair reward system; such as the five hundred dollars rewarded to Allstate employees for achieving certifications.6

In contrast, one survey of 800 IT employers conducted by E-skills, a training firm located in the UK, concluded fifty-five percent of companies of all size, and twenty percent of companies with two hundred or more employees, have no training plans in place.7

The best organizations provide business, project management, and IT skills training. Comprehensive employee development pays off because it increases an employee’s dedication to the organization and confidence. Confident, dedicated employees are more likely to stay longer, thereby increasing employee retention. 8

The key is Great Management & Culture IT managers face many challenges in attracting and developing talent. A primary component that seems to elude companies and IT managers is how to best retain IT professionals. Depending on where you look or whom you ask, there seems to be an endless amount of theories and practices’ professing what works the best.

Fellow researcher and author, Tim Sullivan said, “People don’t quit jobs, people quit people.” In doing so, he made a complex issue seem quite simple. The best companies hire and develop managerial excellence because IT workers must enjoy not only whom they work for, but also whom they work with. The dynamics of these relationships can make or break a corporate culture.9

A closer look at survey and independent research reveals both employers and employees value a good working community. After all, most people spend 8 – 10 hours a day at work and if they actually enjoy it, then they may not risk leaving for a few more dollars and cents.

Case Studies Data gathered from Anheuser-Busch and Edward Jones offers helpful insight on how real world companies apply IT workforce practices. For the purpose of comparison, the personal interviews with a company representative focused on the following IT concerns:

Attract1. What recruiting sources work best/worst? 2. What are the "hot" or high demand skill areas3. What IT positions are challenging to fill? Why?

Develop1. How are IT professionals developed in a constantly changing global workplace?2. What types of internal and external training do IT professionals attend?3. What is a typical career path for a college graduate?

Retain1. How many people work in IT?2. What strategies are employed to maximize retention?3. What strategies are used to minimize turnover?

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ATTRACTING IT PROFESSIONALS

The future is bright for individuals who choose an IT career Are the nerds getting the last laugh? Do not be fooled into believing the hottest jobs of the near future are for “tech” savvy computer programmers. In fact, according to the U.S. Department of Labor’s projections for the years 2004 to 2014, six of the top ten fastest-growing occupations requiring a bachelor's degree or higher compel prospective IT workers to have a range of talent which includes technical, business, and project management expertise.10 The occupation list includes job titles like analyst, engineer, administrator and manager. The job titles missing from the fastest growing list are programmers and developers, which are usually associated with people that fit the "computer geek" stereotype. The perception and the reality regarding these careers may be influencing college freshman to choose other majors. In fact, a study of 1,600 schools conducted in 1999 concluded only 12 percent of high school students thought a career in computer science was "cool".11

12 Department of Labor – Fastest Growing Occupations http://www.acinet.org# Occupation Employment Percent

Change*

Rankby

State

Earnings Quartile

Educationor Training

12004 2014

1 Network systems and data communications analysts 231,300  357,500  55%    Bachelor's degree 

3 Computer software engineers, applications 459,800  682,200  48%    Bachelor's degree 

4 Computer software engineers, systems software 340,300  486,500  43%    Bachelor's degree 

5 Network and computer systems administrators 278,400  385,200  38%    Bachelor's degree 

6 Database administrators 104,400  144,300  38%    Bachelor's degree 

12 Computer systems analysts 486,500  639,500  31%    Bachelor's degree 

26 Computer and information systems managers 280,300  352,900  26%   

Bachelor's or higher degree, plus work experience 

13 Department of Labor – Fastest Growing Industries http://www.acinet.org

# Industry Employment Percent Change

2004 2014

3 Software publishers 238,700  400,000  68% 

4 Management, scientific, and technical consulting services 779,000  1,250,200  60% 

16 Internet publishing and broadcasting 31,300  44,900  43% 

20 Computer systems design and related services 1,147,400  1,600,300  39% 

37 Data processing, hosting, and related services 270,500  360,000  33% 

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# Industry Employment Percent Change

2004 2014

44 Wireless telecommunications carriers (except satellite) 189,100  247,100  31% 

Who will be competing for the best and the brightest IT talent? According to the Department of Labor 2004 to 2014 projections, seven of top fifty fastest-growing industries are in the IT sector. Cleary, software publishers and consulting services will need high quality software engineers, computer analysts or network and database administrators to be competitive in their respective industries. On the other hand, they will need to compete with companies in every industry.14

Why should U.S. companies be concerned with the supply of IT workers? Prior to 1980, the number of undergraduate degrees conferred for computer and information science was only a few thousand per year. In the early 80's, there was a large influx of students seeking computer science degrees, peaking at 42,337 in 1985-1986. It is reasonable to conclude, this anomaly correlates with the introduction of personal computers such as Commodore, Compaq and Apple. Overall, growth was relatively flat from 1990 to 1998, with an average of approximately 25,000 degrees per year.

However, in the subsequent five-year period, the number of degrees doubled to 57,439. To put this in perspective, computer science degrees represents 4% of all bachelor degrees conferred, whereas, business administration degrees represent 22%. There was a similar growth pattern for master degrees conferred in computer science. The tables below demonstrate the correlation between bachelor and master degrees conferred during these periods.15

U.S. Department Of Education, Bachelor’s Degrees Conferred

U.S. Department Of Education, Master's Degrees Conferred

The IT industry requires more than 2 million new IT workers in the next 10 years. 16

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In the next few years, companies could be fiercely competing for new IT workers. In fact, the U.S. Department of Commerce estimates that the United States will require more than 1.3 million new, highly skilled IT workers through 2007.17 The majority of these IT jobs will require a bachelor's degree or better. 18 If the Computer and Information Science graduate rates at U.S. colleges continue at the historical rate, the IT worker demand will far outgrow the supply. This will cause companies to execute controversial employment practices such as offshoring, outsourcing and foreign worker sponsorships. Should IT workers be concerned about the cause and effect of supply and demand? Have U.S. companies already figured out high labor costs plus low labor supply equals offshoring?

What are the hot jobs? Choosing a career path in the IT field can be a difficult choice with long-standing ramifications. When choosing a career, one must take into consideration what skills are the most marketable, the corporate culture of the company, and the chance for growth within the company. If one chooses to get into the management side of the IT field, they must not only have good technical skills, but good project management and business domain skills as well.19 They must be able to decipher which projects are worth undertaking and how to manage people and resources to get optimal results.

By far, the most lucrative positions to attain in the IT field would be systems analysts, management, and some of the more advanced programming positions. Average salaries in these fields can, and very often do, exceed $100,000 per year, depending on experience and education.20 As with any field, the more skills and experience one has will only increase the salary they are able to demand. Computer Systems Analysts are “responsible for designing computer information systems, modifying systems to improve production or workflow, or expanding systems to serve new purposes”.21 General business skills are just as important in this position as technical skills, as the systems analyst must be able to accurately determine which implementations will most help the company. They must stay abreast of which skills are the most beneficial to business and learn new skills as they become more commonly used.

Management positions in the IT field are by far the most difficult to attain, but can be the most rewarding also. For a management position, one must have extensive business knowledge, both in IT and other fields. It can take many years to move up to a management position in IT. The technical side of information systems is not as important in a position such as this as would be for a systems analyst, but it is important for the manager to have a working knowledge of the systems used within the company. An IT manager must be able to effectively utilize all resources available to them to be successful in the position.22 Management can be the most stressful of all IT positions for the simple reason that they are responsible for all operations, as well as potential mistakes that may occur within the department. An IT manager must also have a very creative mind in order to be successful. They must keep an eye on emerging technologies and decide if the company can effectively use them. It is very important to keep up with new systems, because what may be a hot skill today may be obsolete within a matter of months. The manager must also be aware of new technologies that other companies may be using in order to stay competitive. IT is an ever-evolving field. If management is not able to keep up with new trends, they will get behind in their work, which can be very dangerous if the company wants to

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maintain an effective IT network. Overall, an IT manager’s position is very challenging and very stressful, but can also be the most rewarding if one is able to accept such an undertaking.

A career path that fewer and fewer people are choosing to go into is government work. “There is a shortage of government IT contractors with security clearance,” according to Will Hadfield of Computer Weekly magazine.23 Security Clearance can be very difficult to attain in this day and age, so many IT contractors are choosing alternate methods to attain work. However, experts claim that having security clearance for government work can increase one’s salary by up to $15,000 per year.24 Currently, the United States Department of Defense employs 161,000 IT professionals.25 Of those workers, one third of them are over the age of 50, 36% of whom are eligible for retirement26. Unfortunately, many government IT workers are leaving their positions without people who are adequately trained to replace them. The United Kingdom estimates that they will be short 800,000 IT workers by the year 2008.27

Redmond Magazine Survey Is adequate compensation most important factor in attracting skilled IT professional? To analyze the current situation and trends in this area, we relied on the Redmond Magazine survey of 1,700 IT professionals28 conducted in the end of 2005 and the Mercer Human Resource Consulting research report, conducted in 2004, which includes data from more than 43,000 IT professionals in 3,300 companies in 32 countries.29 These are the most recent and comprehensive surveys available. The Mercer survey, however, was only available in an abbreviated form.30

In this section we provide an overview of the findings reported in the Redmond Magazine survey, covering the US IT sector. The demographic of the respondents provide a snapshot of an average American IT worker: 39-year old male with an average experience of 10 years. The results of the survey show that in 2005 the base salary (before bonuses and taxes) in the IT sector was $68,500, which is 5% higher than in 2004.

The survey indicates that job responsibilities, which are reflected in the job title, are one of the primary determinants of salary level. IT professionals in managerial positions are expected to make considerably more than skillful engineers or developers. An average management salary is in the range of $83,000-$85,000 per year, while both engineers and developers are expected to earn an average of $60,000-$70,000 per year. This finding is consistent with other studies that emphasize a substantial amount of synergies resulting from the combination of business and IT skills (for example, getting an MBA for those who have a Bachelors degree in IT or vice versa). The study titled “The effect of MBA education on total compensation of IT professionals,” conducted by the Ross School of Business at the University of Michigan31, provides additional support to this conclusion.

Another important variable that determines the level of compensation is professional experience. The survey shows, however, that the effect of experience on compensation is not necessarily uniform across different positions. Professionals in managerial positions with 10 years of experience earn an average of $20,000 more than their less experienced (6-9 years) colleagues. In contrast, more experienced (10+ years) database developers earn only a few thousand dollars

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more than those with 6-9 years of experience. Network engineers and system administrators are in the middle of the spectrum, with an average increase of $10,000 for every three additional years of experience. Again, we find a clear indication that most lucrative and promising positions in the IT sector are related to management.

Formal education has always been an important factor effecting compensation in almost every industry. The survey indicates that IT is not an exception. Indeed, we see a very strong correlation between level of formal education and average base salary. Professionals with Doctorate degrees make an average of $96,000 per year, while those with only a Bachelors degree make an average of just $67,000 per year. IT professionals with Bachelors degrees would be well advised to pursue a graduate degree, as their base salary is expected to increase by $14,000 per year as a result. Even post-graduate study without any degree will add $8,000 per year to the salary of those who pursue it.

Interestingly enough, college dropouts and those who never even attended college are able to make decent money in the IT sector. This sentiment is echoed with a recent article in Forbes magazine entitled “Five Reasons to Skip College”32, which specifically mentions software engineering as a profession that depends more on “on-the-job” education than on classroom learning. However, the data collected by the Redmond Magazine still shows that there is a very strong correlation between the level of formal education and the level of base salary.

Although the survey found little variation in the amount of salary in which IT professionals work, the data does make it clear that industries in which IT is instrumental usually pay higher salaries than those where IT function is ancillary. Indeed, in aerospace and ISP/ASP sectors, the average salary of IT workers was $80,000-90,000 per year, while in the food industry it was near $50,000 per year. For most other industries the difference is not so dramatic.

With respect to the effect of Microsoft certification on salary, the survey shows that salary is not a primary factor that motivates IT professionals to attain certification. More than half of the respondents (51%) either were unsure that certification had an impact on their salary or simply said that it had no impact (33%). The average rise for those who experienced an increase was 7.8%.

Needless to say, in the today’s world, salary is not the only variable in the compensation equation. Many companies offer an array of additional benefits that play a crucial role in attracting IT talents. The most common types of additional compensation are company sponsored pension plans (70% of the respondents) as well as medical (59%) and life insurance (51%). Stock options, not long ago one of the most widely used forms of non-cash compensation in Silicon Valley, ended up on the bottom of the list with only 12% of respondents mentioning them in the survey. There may be two reasons responsible for this result – 1) recent changes in the rules of accounting for stock options for financial reporting purposes and 2) sluggish stock market performance compared to the dot com frenzy of late 90s.

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One of the most traditional ways to provide additional compensation to hard-working employees is a cash bonus. 55% of the respondents reported that they were given a cash bonus last year. The amount of an annual bonus ranged from less than $1,000 to more than $20,000, with a mode of $1,000-5,000 (23% of respondents). It has long been debated whether the amount of the bonus should be tied to the individual performance or company profitability. The survey shows that managers are still divided on this issue, with 29% of them awarding bonuses based on company-wide results, while 24% of them think that individual performance should be the primary driver of the bonus amount. Nonetheless, 46% of managers found the way to reconcile these views and award bonuses based on formulas that incorporate both types of performance measures.

There is growing evidence that after a period of layoffs and stagnation following the dot .com bubble, many companies are starting to hire additional IT personnel. The survey shows that there are more companies planning to hire new IT people in the next twelve months (40%) than those that are not (37%). The remaining 23% are undecided on the issue, which may be interpreted as an indication that they do not rule out the possibility of adding new people to their IT staff. This is a very promising sign. It should be noted, however, that almost three quarters of the companies that do plan to hire IT professionals in the next year are considering an addition of only 1 to 5 employees to their IT staff.

Only 5% of IT professionals were unemployed at some point during the last year. However, 85% of them were either rehired or were able to find another job. Only 15% of the people who were fired last year (i.e. 0.75% of all IT workers) remained unemployed. According to the survey, the average time it takes for IT people to find another job after they have been laid off does not exceed four months.

The readers of the Redmond Magazine were also asked to quantify the impact of outsourcing and their expectations about outsourcing for the next year. Surprisingly, 94% of the respondents experienced no negative effect of outsourcing on their jobs. Only 6% of those surveyed lost their jobs as a result of outsourcing. However, almost twice as many (11%) indicated that they expect to lose their jobs to outsourcing in the next year. Obviously, it is hard to make any conclusions based on these two numbers but it could be the case that outsourcing is not as dangerous as it is often perceived in the IT community.

Overall, when asked whether IT will remain their long-term career choice in the years to come, 86% of the respondents gave a positive response.

Compensation in the IT sector - International perspective (Mercer’s study) The salaries of IT professionals vary greatly depending on where they live, according to a research report from Mercer Human Resource Consulting. The study includes data from more than 43,000 IT professionals in 3,300 companies in 32 countries.

Annual pay ranges from $164,900 per year in Switzerland versus $24,900 per year in the Philippines for senior-level IT positions. For lower-level jobs, the disparity is also great. The same position earning $64,100 per year in Germany earns only $12,400 per year in China. This

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helps explain why so many companies in North America and Europe are keen to offshore IT services. Switzerland pays the most at all levels, with IT professionals earning from $75,100 to $164,900, depending on their level of experience.

Germany, Japan, Hong Kong, the United States and Denmark are the next highest. The Philippines, Vietnam, Bulgaria, Malaysia, Indonesia and India pay the lowest wages for IT workers.

Bonuses and incentivesAccording to the Mercer’s survey, low-paying countries pay a large percentage of total compensation in the form of variable incentives. Among the 10 lowest-paying countries, the variable pay ranges from 3% to 15%. Most countries have a variable pay component of 8%. In high-paying countries, the percentage of variable pay ranges from 1% to 10%, with 4% being the most typical.

Indonesia, Bulgaria, India, and Japan place the largest percentage of pay at risk (10% to 15%) for the lowest IT experience level (team leader/senior professional). For high level of IT experience (senior manager/expert), Brazil, Germany, and Canada place the largest percentage of pay at risk (18% to 20%).

The IT premiumThe “IT premium” is the difference in compensation for the IT function compared to similar jobs outside of the IT function. For example, the lowest IT experience level (team leader/senior professional) in Bulgaria, Australia, Poland, and Hungary is paid more than 20% higher than jobs with similar experience in another field. In Argentina and Sweden, IT professionals at this level earn more than 10% less than all other professions.

However, Mercer’s survey shows that the “gap” closes at IT levels with the highest experience (senior manager/expert). The largest IT premium at this level is 16% in Hungary. Premiums in the USA, Hong Kong, Spain, and Bulgaria range from 5% to 8%. The remaining 27 countries pay a premium of less than 5%, sometimes even negative amounts. In Taiwan, Philippines, and Malaysia, the senior manager/expert level is paid more than 20% less than similar jobs in other professions.

The value of experience According to Mercer’s survey, lower-paying countries generally provide a larger increase in pay as the job becomes more advanced. Higher-paying countries have flatter pay practices, with less differentiation between job levels.

Several factors may contribute to this variation. For example, countries with generous social benefits, such as the Nordic countries in Europe, have smaller pay progression ratios. Countries with a rapidly growing IT economy, such as India, reward greatly for expertise and responsibility. U.S. and Canada pay for performance irrespective of tenure. In Asia and Latin

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America, the reward for career growth may be two to three times that received in Western Europe or North America.

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DEVELOPING IT PROFESSIONALS

More than other professions, IT professionals are constantly required to update their skills sets in order to prepare for the broad array of quickly changing and newly emerging technologies. IT professionals must redevelop and update their skill sets in order to remain marketable as the latest technologies gain market share. In fact, according to a study in 2004 by the Chartered Institute of Personnel & Development, ninety-five percent of employers say training improves retention and helps to avoid recruitment costs.33

Employee development is the conduit that connects the attraction and retention efforts of management. Good employee development will not only help attract IT professionals, but will also help organizations retain IT professionals. Therefore, it is vital for IT Managers to understand the importance of continuing education and training is in order to maximize the development of their staff. Organizations have recognized that they need to increase their IT staff’s skills, especially in project management and business proficiencies. 34

What skills and costs are associated with employee development? What’s more, employers are demanding more diverse technical skills. Thus, there is a strong need for IT professionals to have strong business skills in management, marketing, finance, and accounting; as all are core to the ongoing development of IT professionals.35 For example, Avon trains its IT staff in strategy techniques and assertiveness skills.36 Additionally, IT Managers should ensure employees have a healthy work-life balance. For example, public sector employees may have a better work-life balance than those in the private sector; this may explain part of the difference in pay scales for public vs. private sector employees.37

Additionally, a survey of eight hundred IT employers conducted by E-skills, an online training company, concluded that fifty-five percent of companies of all-size have no training plans in place at all. 38 Of companies with two hundred employees or more twenty percent also have no plans in place. 39 Despite these grim numbers, many companies agree that training investment does indeed pay off. Increased dedication, staff loyalty and confidence, and reduced turnover are all benefits of continuous training.40 However, training should not be a perk for employees, but should be driven by the need of the business. 41

However, there are significant training costs associated with the development of IT professionals. There are two types of costs that factor into employee development, explicit and implicit costs. Explicit costs are the more obvious, direct costs such as tuition, books, computer based training software, and travel and/or meal expenses. Additionally, there are implicit costs, which are a little more hidden and less obvious, which are more challenging to track accurately. An example of implicit training costs would include lost productivity, hourly wages or salary, overtime costs incurred because an IT employee was unavailable while in training, or temporary replacement workers used while employees were sent to training.

According to training firm E-Skills; companies will need to increase IT training budgets in order to cover gaps in training, which are expected to occur by the second quarter of 2008.42 A reproduction of a graph, which originally appeared in Computer Weekly in October of 2005, is

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shown below. The graph shows the percent of IT staff, which will be requiring higher-level IT skills by mid-2008. For example, twenty-one percent of networking staff are expected to receive training in higher-level IT skills by mid-2008. For Database Administration, twenty percent are expected to receive training by the second quarter of 2008. 43

Training Locations & Types Training may be carried out at either an onsite offsite locations. An onsite location provides some advantages because employees are usually more familiar with the environment, and do not become confused or frustrated with trying to find the correct classroom or lecture hall.

Internal Training usually consists of lectures, seminars, or classroom training provide by human resource representatives, or from subject matter specialists from particular departments. Also, two of the most economical internal training methods which employers use include Computer based training and transfer learning. Another method of internal training is mentoring, where another employee, usually senior in position, provides career and skill guidance to the protégé.

What are some of the Most Economical Methods Used to Develop Employees? Computer based training and transfer learning are two examples of economical solutions to employee development and training efforts because of their low cost per employee.

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Computer Based TrainingOne cost effective method employers are using for employee development is Computer Based Training; known simply as CBTs. CBTs can be easily distributed on central locations such as an Intranet or the Internet. CBTs can also be distributed using CD-ROMs, memory sticks, or diskettes. Organizations can purchase CBT subscriptions to access extranets provided by third parties. CBTs provide training in a large variety of business disciplines, at a very economical cost per employee. CBTs do not clearly fall into either the offsite or onsite categories. CBTs may be started at work during the day on the company’s Intranet, and then complete that night at home via the Internet. Cingular Wireless allows IT employees to use a web-based version to train at any time. 44

Transfer LearningOrganizations can reduce the overall cost of employee development by using Transfer Learning techniques in their organizations. Transfer learning is the concept of training one, or a few employees from a group or department, and then having those employees come back after training to train the remaining members of the group. Transfer learning works best when used with smaller groups that have one-to-one communication occurring on a daily basis.

What’s more, transfer learning appears to work better in smaller groups because it allows the originally trained person to become the trainer for the rest of a group. Transfer learning uses existing communication channels between co-workers to facilitate the employee development process. In fact, Cingular Wireless considers on-the-job training as being central to the development of its IT professionals. Nonetheless, transfer learning can also occur in a one-to-many environment. However, the one-to-one environment appears to work better; because people learn at different rates, they can be trained at the speed that best suits their individual learning style.45

Conversely, there is external training. External Training is provided by a third party organization and can be provided at the company’s location, a location of the company’s choice, or at an offsite location. Offsite locations like a hotel or resort conference room can be used to gather disperse groups in a central location. External training occurs most commonly in traditional training settings such as colleges, technical, and trades schools.

How Developing via Evaluations Guides Training Efforts? Another developmental method is to use evaluations to guide the development of IT professionals. Annual evaluations are the most common time frame used for evaluations. However, more frequent evaluations that occur every three or six months have the advantage of keeping the development of IT professionals more focused. The more frequent refocusing of employee training allows organizations to better center their training efforts on those skills with the greatest demand within their organization.46 What’s Happening in the Development of Real World IT Staffing? After employees go to training, those skills need to be further developed by assigning employees challenging tasks that reinforce the recent training efforts. Next, described are some examples of what companies are doing with employee development. Below some details of developmental methods used by Allstate Insurance and Procter & Gamble are described.

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In 2005, Procter & Gamble (P&G) was granted Computer Weekly’s Best Place to Work in IT. One of the primary reasons noted for the win was due to the way the company ensures a work-life balance for its staff.47 Procter & Gamble analyzes work-life balance of its IT staff to ensure employee’s obligations at home are being met. For instance, public sector employees may have a better work-life balance than those in the private sector; this may explain part of the difference in pay scales for public vs. private sector employees.48

Additionally, Procter & Gamble uses cross-training to give their IT staff exposure to a wide variety of business disciplines. In addition to cross-training, Procter & Gamble sends their employees to a minimum of ten days formal training conducted outside the organization.

Mentoring & coaching are also used to promote employee development by allowing them to practice in the real world skills they’ve recently been trained for. 49

Allstate Insurance seeks IT employees with varied skilled sets. They prefer employees who have had a combination of formal training, certification, communication and interpersonal skills. 50 In fact, Allstate rewards certifications with a reward of five hundred dollar bonus. Additionally, Allstate’s IT department uses a variation of the Capability Maturity Model (CMM) documentation standards to track employee training & development. 51 By using CMM documentation standards they are able to more readily identify training gaps. Employees gain more marketable skills, which allow for greater career flexibility across and within the Allstate Corporation. This allows for greater career progress, versus more traditional career paths.52

A summary of best practices from the real world include two weeks training per year, training in both business and IT skills, quarterly bonuses, a healthy work-life balance, a fair reward system and strong communication skills. As mentioned earlier, Procter & Gamble provides its employees with a minimum of two weeks formal training. Additionally, Procter & Gamble ties bonuses to quarterly results, rather than annual results. 53 Another good practice is to provide employees with ongoing training, not only in IT skills; but also in business skills such as finance, sales, and marketing.54

Also, IT Managers should analyze IT staff’s work-life balance to make certain employees have a healthy home life.55 Likewise, organizations should reward employee development using a fair reward system; such as the five hundred dollars rewarded to Allstate employees for achieving certifications.56 Finally, employers need to create and maintain open communication channels to make sure they have strong communications with employees.57

What Hot Skills Require Additional Employee Development? There are several hot skills that employers would like to see more developed. Four of them are project management, security, Microsoft .net, and radio frequency identifiers (RFID). As stressed earlier, project management skills and certification are in strong demand across the IT workforce. 58 59 60 61

Another hot skill companies will be developing is security. With terrorism and increased volatility of the geo-political environment; companies have been obligated to improve security. The Information Systems Security Certification Consortium (ISC) 2 has a security certification,

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which has grown from 3,000 to 35,000 worldwide in just four years; which is the Certified Information System Security Professional (CISSP) qualification.62

Another skill that organizations will be seeking is in application development using Microsoft .net. A survey of two hundred ninety-six large employers, conducted by training firm QA, had over one hundred respondents indicate Microsoft .net would be the most demanded IT skill in 2006.63 Additionally, ads for IT jobs requesting Microsoft .net skills rose fifty-eight percent in 2005, according to a Computer Weekly survey.64

Additionally, radio frequency identification technology (RFID) is gaining popularity in industries such as logistics, supply-chain management, and delivery companies. The RFID technology helps companies reduce shipping costs, provided their IT staff knows how to implement it correctly. 65 In fact, there is a new certification created by CompTia, called RFID+, which ensures IT professionals are capable of implementing RFID hardware and software. To pass the RFID+ exam IT professionals must understand how to survey a site and correctly make a tag selection, choose a location to place the tag, and finally test tags.66

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RETAINING IT PROFESSIONALS

The parody of this cartoon is that IT management is more important to aliens than the leader of the free world! If the alien intentions are malicious, then the country better have superior IT management and culture to ensure IT soldiers are ready and willing to fight and win.

To better understand how the IT workforce feels about management and culture, the references below provide some interesting facts.

Enduring Practices for Managing IT Professionals To understand what successful IT organizations are doing to retain IT workers, the authors of a 2005 study selected 32 organizations based on their ability to manage IT in an exemplary manner.67 From this sample, the participants provided 230 examples were categorized into 7 high-level retention practices shown in Table 3.

Table 3: Detailed IT retention practicesPRACTICE CATEGORY FREQCompensation and Benefits Systems 44Employability Training and Dev. 33Sense of Community 32Work Arrangements 27Quality of Leadership 21Performance Measurement 19Opportunities for Advancement 14Opportunities for Recognition 15Lifestyle Accommodations 13Longer-Term Career Development 9

The “Sense of Community” practice category represents “activities undertaken to provide IT professionals with a sense of belonging to and being connected to a larger community.”68 Detailed practices included various mediums of company communication and meaningful participation in socially responsible activities. Cleary, IT workers want to know what is going on, and they want to be part of and be part of an organization they can be proud of. The question they ask themselves is “would I recommend my company’s product or services to a friend?” If the answer is no, then the person and company are not a good fit.

The Quality of Leadership practice category represents “training for managers and empowerment or participation of employees.”69 This is important because it demonstrates that respected IT

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organizations understand the consequences of poor management. In fact, providing helpful and direct feedback and balancing an individual’s professional and personal needs is the responsibility of management. Effective leaders gain trust, which leads to higher employee satisfaction and retention.

2004 Best Places to Work in IT Employee Scorecard Computer World magazine surveyed over 1400 IT workers in 2004 to assess the 100 Best Companies to Work for in IT. When IT workers were asked what benefits they prized the most, 40% of respondents ranked flexible hours in their top 3 choices. 70

“Most companies are concentrating on creating engaged work environments to let IT workers feel like they’re creating value, sharing responsibility, and working in a community that’s an enjoyable place to spend eight to ten hours of the day”.71 Penn State was amongst the top 10 best companies to work for, in part, due to accommodating work arrangements. University IT workers have four different options to choose from including flextime and compressed work schedules.

CIO Magazine Staffing Survey In 2004, CIO Magazine surveyed over 179 CIO executives, managers and IT staffers. When subscribers were asked for their top three concerns regarding IT staff, 22% selected finding IT management candidates. In addition, when asked what the top three benefits offered to motivate and retain IT staff, 58% selected flex time and 40% selected recognition.72

What are your top three concerns regarding your IT staff in 2004? Finding/hiring needed skill sets 55% Retaining needed skill sets 43% Finding IT management candidates 22%

What are the top three benefits you offer to motivate and/or retain IT staff? Flex time/flexible work hours 58% Recognition programs/awards 40%

Benefits that Benefits that IT workers prize the most IT workers prize the most (and the least). (and the least). Percentage who gave the benefit a "10 “Percentage who gave the benefit a "10 “

76%76% Paid vacationPaid vacation68%68% Health insuranceHealth insurance47%47% Profit sharing/ESOP program/401(k)/403(b) planProfit sharing/ESOP program/401(k)/403(b) plan40%40% Flexible hoursFlexible hours31%31% Reimbursement for technology certificationReimbursement for technology certification30%30% BonusesBonuses30%30% Continuing education/executive programsContinuing education/executive programs26%26% College tuition reimbursementCollege tuition reimbursement

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Conventional Wisdom or Reality? The key to retaining quality IT talent is having great management and culture. Companies that promote leadership excellence and practice macro-management will reap the awards of IT worker loyalty and effort. To compete for this talent, IT managers should consider the following three guidelines for attracting, developing, and retaining IT professionals.

First, conventional wisdom does not always apply to IT. The survey references in this paper indicate paying IT workers well does not necessarily equate to overall employee satisfaction. In fact, the reality is, employees want to enjoy where they work and for whom they work, otherwise, they may seek employment elsewhere. Nevertheless, when IT demand exceeds supply, the best companies go outside the box to attract the brightest IT talent. Instead of trying to apply the same benefit classes to the entire workforce, HR partners with IT managers to ensure the company's IT benefits are competitive

Second, the reality is that IT training is highly valued by all. Based on the CIO Staffing survey and Computerworld 100 Best Places to work in IT, highly rated companies offer several training related benefits to motivate and retain IT workers. In fact, training is necessary to renew IT skills in a rapidly changing environment.

Third, the Golden Rule applies to everyone including IT workers. Treating people fairly is just not possible because people our different and each person has unique needs. The reality is management must treat people with respect and dignity to gain respect, whether they work in IT or any other place in the company.

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CASE STUDIES

To get a better understanding of how the real world attracts, develops, and retains IT professionals, we interviewed key executives at two St. Louis based companies. We choose Edward Jones and Anheuser Bush because they are local, yet large multi-national firms serving two entirely different industries, Financial Services and Consumer Staples respectively. In addition, Edward Jones is a private partnership, whereas, Anheuser Bush is a publicly traded company. Each executive provided interesting facts about their current IT human resource practices, and in doing so, expressed the unique needs of each organization.

Anheuser-Busch

Founded: 185273

Industry: BrewingHeadquarters: St. Louis, Missouri2005 Net Income: $1.839 billion74

The King of BeersAnheuser-Busch is the largest brewing company in the United States and the third largest in the world. They currently operate twelve different breweries in the United States, 14 in China, and one in the United Kingdom75. They have a yearly output of 116.8 million barrels of beer76, which equates to roughly 3.62 gallons77. They produce arguably the most recognized beer brand in the world, Budweiser.

Anheuser-Busch’s IT network consists of 1200 employees across all of their breweries, half of which are contract workers. Anheuser-Busch has an interesting way of implementing their IT network. The company has three major components to their operations – brewing, business, and general operations. The company brings these three sub-genres together into a system called RS 6000, which is the central database where all information dealing with the brewery is stored.

The IT Director perspectiveInterestingly enough, Anheuser-Busch prefers an undergraduate degree in electrical engineering as opposed to computer science. A computer science background is very important, but landing a position in the IT department doesn’t necessarily mean that one would be employed in that department for his or her duration with the company. This is to say that as an IT employee learns the brewing process and is seeking a promotion, that promotion may not necessarily be to another IT position. As they learn the business, they may be placed into an administrative or management position outside the IT department. “Opportunity to grow is very high…opportunities are there if you want it,” said Gary Darden, director of ABI. Anheuser Busch will not type cast an employee to a specific department, IT or otherwise. If an employee shows

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proficiency in an area that may not be in their department, they have just as much of a chance to move up into another area as they do to stay in IT. Employees tend to be very loyal to Anheuser-Busch, and most of the turnover is due to promotions and transfers, as opposed to resignation or termination. Ability to relocate is also crucial to success at Anheuser-Busch. The company operates twelve breweries in the United States and a prospective employee must be open to move into any position across the country. Anheuser-Busch takes the position that any employee that enters the company should be taught the entire brewing process, both within and outside the IT department.

Anheuser-Busch has IT specialists working at their breweries around the clock. Workers must be expected to be on-call when they are not working. With this said, it can be a very stressful position that not everybody can handle. Generally, the employees work a given shift for one week to several weeks at a time. Shifts are generally 6 A.M. to 2 P.M., 2 P.M. to 10 P.M., and 10 P.M to 6 A.M. Generally a worker will work seven days in a row, with two-three days off the following days. It is very important to have IT professionals at the brewery at all times because they are also brewing beer around the clock. If something goes wrong, the IT department is the first place management looks for a solution. IT should “be able to provide necessary information to solve the problem,” according to Darden.

Anheuser-Busch relies heavily on recruitment at different technical universities to find new employees. They don’t do much advertising for many of the positions that are offered. The company is well known and has such strong brand recognition that most of the employees seek them out for employment, not necessarily knowing if a position is actually available or not. If a situation should arise that they are in need of employees, they are more likely to seek out contractors as opposed to placing advertisements for new, permanent employees. Very often, a contractor will be offered a permanent position with the company when the contract runs out, but that is not guaranteed. It just depends on business and what skills the prospective employee has to offer the company.

An IT employee at Anheuser-Busch must be proficient in many areas. In addition to having an electrical engineering degree, one must be proficient in skills such as SAP, Websphere, and Microsoft.net. Anheuser-Busch is a firm believer in continually training their employees. “We have internship/co op programs so that they can learn technology in our environment, so they can grow with us and be placed into one of our breweries,” replied Darden. While Anheuser-Busch is always interested in improving its IT network, they admit that they are not as adamant about having the latest technologies as some other companies are. “You don’t have to be on the leading edge, but you do have to keep up with things,” replied Darden.

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Edward Jones

Founded: 1871Industry: Financial Services

1 Friedmann, Thomas. The World is Flat. New York: Farrar, Strauss and Giroux, 20052 Domingo, Michael. "10th Annual Salary Survey: Movin' On Up!." Redmonds. Sept. 2005. http://www.redmondmagazine.com/salarysurveys/3 Bill Goodwin, “Commitment to work-life balance clinches Procter & Gamble’s win” Computer Weekly, Mar 8, 05, Pg. 224 Kellye Whitney, "Allstate: You're in Good Hands with a varied skill set" Certification Magazine, Jan 2005, Pg. 26 5 Kellye Whitney, "Allstate: You're in Good Hands with a varied skill set" Certification Magazine, Jan 2005, Pg. 26 6 Kellye Whitney, "Allstate: You're in Good Hands with a varied skill set" Certification Magazine, Jan 2005, Pg. 26 7 Bill Goodwin, “Companies Failing to Address Training Gaps” Computer Weekly, Jun 28, 2005, Pg. 428 Julia Vowler, “How Effective Training Aids Staff Retention” Computer Weekly, Nov 15, 2005, Pg. 409 Brandel, Mary. “2004 Best Places to Work in IT Employee Scorecard.” COMPUTERWORLD, June 14 200410 Department of Labor, Bureau of Labor Statistics – Fastest Growing Occupations. http://www.acinet.org11 Dr. Kamal, Mustafa. "Information Technology Workforce-Planning for the Future." Journal of American Academy of Business, Vol. 7, No2, Sept. 2005: 23-2612 Department of Labor, Bureau of Labor Statistics – Fastest Growing Occupations. http://www.acinet.org13 Department of Labor, Bureau of Labor Statistics – Fastest Growing Industries. http://www.acinet.org14 Department of Labor, Bureau of Labor Statistics – Fastest Growing Industries. http://www.acinet.org15 U.S. Department of Education, National Center for Education Statistics, Higher Education General Information Survey (HEGIS), "Degrees and Other”16 Dr. Kamal, Mustafa. "Information Technology Workforce-Planning for the Future." Journal of American Academy of Business, Vol. 7, No2, Sept. 2005: 23-2617 Dr. Kamal, Mustafa. "Information Technology Workforce-Planning for the Future." Journal of American Academy of Business, Vol. 7, No2, Sept. 2005: 23-2618 Dr. Kamal, Mustafa. "Information Technology Workforce-Planning for the Future." Journal of American Academy of Business, Vol. 7, No2, Sept. 2005: 23-2619 Dr. Mary Lacity, et.al. “Trends and Implications 2005-2008” SIM Advocacy IT Workforce White Paper, Mar 6, 200620 www.monster.com 21 http://www.calmis.cahwnet.gov/file/occguide/COMPUSYS.HTM, accessed March 15, 200622 http://www.hr.duke.edu/Jobs/descr/2600/2610.htm, accessed March 15, 200623 Will Hadfield. “Government employers facing a shortage of IT contractors with security clearance.” Computer Weekly, Jan 24, 200624 http://www.taonline.com/securityclearances/, accessed April 12, 200625 Bill Goodwin, “Analyst warns of networking skills shortage” Computer Weekly, Oct 18, 2005, Pg. 426 Bill Goodwin, “Analyst warns of networking skills shortage” Computer Weekly, Oct 18, 2005, Pg. 427 Bill Goodwin, “Analyst warns of networking skills shortage” Computer Weekly, Oct 18, 2005, Pg. 428 Domingo, Michael. "10th Annual Salary Survey: Movin' On Up!." Redmonds. Sept. 2005. http://www.redmondmagazine.com/salarysurveys/29 http://www.mercerhr.com/pressrelease/details.jhtml/dynamic/idContent/1140565 30 The complete study is available at a price of $1,20031 http://www.informationweek.com/news/showArticle.jhtml?articleID=51201467 32 http://msnbc.msn.com/id/12409530/ 33 Julia Vowler, “How Effective Training Aids Staff Retention” Computer Weekly, Nov 15, 2005, Pg. 40

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Headquarters: St. Louis, Missouri2005 Net Earnings: $330 million

Wall Street comes to Main StreetEdward Jones is a sales-driven organization that employs over 9700 Investment Representatives (brokers) located in over 9,300 offices, servicing 6 million clients in communities located throughout the United States, Canada, and the United Kingdom. Overall, Edward Jones employs 32,400 associates and principals, of which, 305 are general partners and 4636 are limited partners. In 2005, the company achieved record revenues of $3.2 billion and earnings of $330 million before distributions to partners.78

34 Julia Vowler, “How Effective Training Aids Staff Retention” Computer Weekly, Nov 15, 2005, Pg. 4035 Julia Vowler, “How Effective Training Aids Staff Retention” Computer Weekly, Nov 15, 2005, Pg. 4036 Julia Vowler, “How Effective Training Aids Staff Retention” Computer Weekly, Nov 15, 2005, Pg. 4037 John Kavanagh, “The growing attraction of public sector IT” Computer Weekly Jan 10, 06, Pg. 2438 Bill Goodwin, “Companies Failing to Address Training Gaps” Computer Weekly, Jun 28, 2005, Pg. 4239 Bill Goodwin, “Companies Failing to Address Training Gaps” Computer Weekly, Jun 28, 2005, Pg. 4240 Julia Vowler, “How Effective Training Aids Staff Retention” Computer Weekly, Nov 15, 2005, Pg. 4041 Julia Vowler, “How Effective Training Aids Staff Retention” Computer Weekly, Nov 15, 2005, Pg. 4042 Bill Goodwin, “Firms will have to spend more on IT training, says E-Skills” Computer Weekly, Oct 25, 2005, 5843 Bill Goodwin, “Firms will have to spend more on IT training, says E-Skills” Computer Weekly, Oct 25, 2005, 5844 Cari McLean “Cingular Wireless: Developing IT Expertise” Certification Magazine Mar 2006 Pg. 2845 Cari McLean “Cingular Wireless: Developing IT Expertise” Certification Magazine Mar 2006 Pg. 2846 Julia Vowler, “Personal attention helps keep staff on track” Computer Weekly, Nov 15, 2005, Pg. 4247 Bill Goodwin, “Commitment to work-life balance clinches Procter & Gamble’s win” Computer Weekly, Mar 8, 05, Pg. 2248 John Kavanagh, “The growing attraction of public sector IT” Computer Weekly Jan 10, 06, Pg. 2449 Bill Goodwin, “Commitment to work-life balance clinches Procter & Gamble’s win” Computer Weekly, Mar 8, 05, Pg. 2250 Kellye Whitney, "Allstate: You're in Good Hands with a varied skill set" Certification Magazine, Jan 2005, Pg. 26 51 Kellye Whitney, "Allstate: You're in Good Hands with a varied skill set" Certification Magazine, Jan 2005, Pg. 26 52 Kellye Whitney, "Allstate: You're in Good Hands with a varied skill set" Certification Magazine, Jan 2005, Pg. 26 53 Bill Goodwin, “Commitment to work-life balance clinches Procter & Gamble’s win” Computer Weekly, Mar 8, 05, Pg. 2254 Kellye Whitney, "Allstate: You're in Good Hands with a varied skill set" Certification Magazine, Jan 2005, Pg. 26 55 Bill Goodwin, “Money is not the main motivator, says Cox” Computer Weekly, Mar 8, 05, Pg. 2256 Kellye Whitney, "Allstate: You're in Good Hands with a varied skill set" Certification Magazine, Jan 2005, Pg. 26 57 Bill Goodwin, “Staff Reveals What Works for them Best” Computer Weekly, Mar 8, 05, Pg. 2258 Julia Vowler, “High Quality status requires training investment” Computer Weekly, Nov 15, 2005, Pg. 4259 Julia Vowler, “How Effective Training Aids Staff Retention” Computer Weekly, Nov 15, 2005, Pg. 4060 http://www.computerweekly.com/Articles/2006/04/20/215484/RFIDcourseaimstoplugskillsgap.htm, viewed April 24, 200661 Will Hadfield, “MS .net set to be Most Wanted skill in 2006” Computer Weekly, Jan 24, 2006, Pg. 4462 John Kavanagh, “Now is the time to be in IT security, but experience and qualifications are vital” Computer Weekly, Nov 1, 2005, Pg. 4663 Will Hadfield, “MS .net set to be Most Wanted skill in 2006” Computer Weekly, Jan 24, 2006, Pg. 4464 Will Hadfield, “MS .net set to be Most Wanted skill in 2006” Computer Weekly, Jan 24, 2006, Pg. 4465 http://www.computerweekly.com/Articles/2006/04/20/215484/RFIDcourseaimstoplugskillsgap.htm, viewed April 24, 200666 http://www.computerweekly.com/Articles/2006/04/20/215484/RFIDcourseaimstoplugskillsgap.htm, viewed April 24, 200667 Ferrat, Thomas et.al. "Enduring Practices for Managing IT Professionals." Communications of the ACM. Sept 2002/Vol.45, No.9; 73-79

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Edward Jones’s business model is so different then other brokerage firms that few, if any, competitors want to copy them. According to the company's website, they are different from the inside out because of their core principles to serve the individual investor with long-term investments through face-to-face relationships.79 It appears these principles have helped Edward Jones recruit and retain talent within the home office as well, because they consistently rank among the best companies to work for by FORTUNE Magazine. In fact, the company's recruiting site claims employees tend to stay with them for years and that it's almost like a family. 80 Even the top dog Jim Weddle, Managing Partner at Edward Jones, still eats with employees in the company cafeteria and parks wherever he finds vacancy."81

The HR perspectiveAccording to Tausha Dirks, a Sr. HR Specialist, in the IS Human Resources Division, prospective IS associates are eligible for performance based pay, plus bonus, and profit sharing. Outside of the common industry benefits i.e. medical, life, holidays, the company offers discounted commissions on trades and an opportunity to be a partner. The latter is an attractive benefit for those who like to assume more responsibility and appreciate the reward of becoming an owner.

To attract IT professionals, the firm's Information Systems (IS) recruiting site proudly boasts the organization is committed to technological leadership and to continuous development enabled by IS to meet the technological needs of associates and customers." 82 In fact, a recent article in the St. Louis Business Journal confirmed the firm is make a major IT investment by launching a $200 million overhaul of communication systems from satellite to high-speed land-based connections.83 Most importantly, the firm wants prospective IT employees to believe their work will matter at Edward Jones and they will have the opportunity to work on aggressive and innovative project-based teams." 84

68 Ferrat, Thomas et.al. "Enduring Practices for Managing IT Professionals." Communications of the ACM. Sept 2002/Vol.45, No.9; 7769 Ferrat, Thomas et.al. "Enduring Practices for Managing IT Professionals." Communications of the ACM. Sept 2002/Vol.45, No.9; 7770 Brandel, Mary. “2004 Best Places to Work in IT Employee Scorecard.” COMPUTERWORLD, June 14 200471 Brandel, Mary. “2004 Best Places to Work in IT Employee Scorecard.” COMPUTERWORLD, June 14 200472 Cosgrove, Lorraine. “2006 Mid-Year IT Staffing Update. CIO Magazine, 1 Oct. 2005 73 http://en.wikipedia.org/wiki/Anheuser_Busch. viewed April 24, 200674 http://sev.prnewswire.com/null/20060201/CGW03101022006-1.html75 http://en.wikipedia.org/wiki/Anheuser_Busch. viewed April 24, 200676 http://en.wikipedia.org/wiki/Anheuser_Busch. viewed April 24, 200677 http://en.wikipedia.org/wiki/Barrel_%28unit%29. viewed April 24, 200678 Desloge, Rick. "Edward Jones $200 million upgrade." St. Louis Business Journal 6-13 Apr. 2006; 1A79 http://www.edwardjones.com/cgi/getHTML.cgi?page=/USA/different/principles/index.html, viewed 15 Mar. 200680 www.edwardjones.com viewed March 15, 200681 Desloge, Rick. "Edward Jones $200 million upgrade." St. Louis Business Journal 6-13 Apr. 2006; 51A 82 http://www.edwardjonesopportunity.com/cgi-bin/getHTML.cgi?page=/hq/en_US/stl/division.html&HOKEY=Information_Systems, viewed 15 Mar. 200683 Desloge, Rick. "Edward Jones $200 million upgrade." St. Louis Business Journal 6-13 Apr. 2006; 1A84 http://www.edwardjonesopportunity.com/cgi-bin/getHTML.cgi?page=/hq/en_US/stl/division.html&HOKEY=Information_Systems, viewed 15 Mar. 2006

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Mrs. Dirks indicated Edward Jones is focusing on growth right now so there are far more new requisitions for IT associates than in the previous five years. In addition, she feels the market is getting hot. Coupled with the firm's revenue growth, it will be more challenging for Edward Jones to find competent IT talent. As of March 15, 2006, there were twenty-six openings including eleven analysts, three administrators and five management positions. Nineteen of the openings (73%) fall within the Department of Labor's category of the fastest growing occupations from 2004 - 2014.

Currently, the hottest skills sought include J2EE, Java, business and legacy systems. The firm is repositioning and improving its knowledge base on an internal intranet, therefore, web-based application developers are vital. In addition, the firm must maintain many of the old Legacy systems, which are either to too expensive or integrated to replace at this time. Many times, the organization must fill these positions with experienced contractors or internally trained associates because universities have changed their curriculums to focus on third or fourth generation programming languages. Finally, the IT division is increasingly seeking candidates with business experience to ensure IT enabled projects meet business objectives. To do so, several divisions of the firm have "transitional" programs to train and move workers into IT. Overall, Mrs. Dirks says Edward Jones encourages "career progression" to increase an individual's breadth and depth of the business and maximize contribution to the firm. 85

Edward Jones offers IT professionals a broad range of internal and external resources to advance their knowledge. Internal classes focus on technical initiatives, primarily programming languages like J2EE, SQL, DML, DB2, JCL, UNIX, ASD, BPM, SDLC, and TM. In addition, Edward Jones offers non-technical training for responsibility based management and associate self-development initiatives. However, Mrs. Dirks said, “Why train a chicken to climb a tree, when you can hire a squirrel.”86 The firm evaluates the immediate needs of the organization, and then it matches these needs to the interests and talents of either the applicant or associate.

One strategy employed by Edward Jones recruiters and hiring managers is qualifying how well the prospect fits with the company culture. According to Mrs. Dirks, "selection is the most important key to hiring and retaining the right people."87 The firm utilizes several techniques including Competency Based Interviewing and KSABE (knowledge, skills, abilities, behaviors, experiences) to ask candidates the "right" questions, thereby, improving the appraisal and selection process. For example, the recruiter will ask value based open-ended questions to see how the candidate would handle specific situations. Although, these systems are certainly not fail proof, they have indeed contributed to an IT turnover rate of only 5%.

85 Dirks, Tausha. Personal interview performed by Kevin Burlage. 8 Mar. 200686 Dirks, Tausha. Personal interview performed by Kevin Burlage. 8 Mar. 200687 Dirks, Tausha. Personal interview performed by Kevin Burlage. 8 Mar. 2006

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Anheuser-Busch vs. Edward Jones These companies have two key characteristics in common; their world headquarters are located in St. Louis and they are employers of choice for IT workers. In fact, they have different industries, ownership structures, and unique needs. The table below contrasts each company practices for attracting, developing, and retaining IT professionals.

Edward Jones Anheuser-BuschSeeking J2EE and Legacy skills Seeking MS.NET and Engineering skills5% of IT workforce are contractors 50% of IT workforce are contractorsMantra is "Career Progression" Mantra is "Career Opportunities"Perks: Commission is Free Perks: Beer is Free

CONCLUSION

The importance of planning a career in Information Technology calls on individuals to consider the pros and cons. The research clearly indicates demand for IT jobs is growing faster than the IT workforce supply, and as a result, IT professionals can expect high-paying opportunistic careers. Furthermore, the great rewards exist for IT professionals who are dedicated to life-long learning and for those that can synergize technical and business skills to manage projects and people.

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References

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