The Future of IT Jobs
There are many changes coming with new technologies. Here are some things ahead:
Do your employees hate their jobs?
We have come through a pretty wrought economic period; many have coined it the Great Recession. Most of the 1st world fared far worse than Canada like the US, Ireland, UK, Iceland and Greece to name a few. The impact we faced here was significantly shorter and less deep. The Canadian job market has now recovered all the positions we lost during the recession. As with most economic slowdowns, the end is marked by a large wave employee turnover. Most companies are just starting to grow again, consequently many companies are caught flat-footed by this turn-over and they see many of their great people leave. This CIO letter is to outline what is happening with the labour force and how to manage through it.
Where does this turn-over come from?
Recessions create some interesting dynamics in the labour market. There are 4 main forces that influence people:
- Employee layoffs – during a recession companies stop hiring and then slowly start their lay-offs, initially the C players are cut, then as the recession takes hold, under-utilized resources and over paid resources and finally entire departments and companies are released.
- Staff Stasis – with lack of jobs and layoffs, people stop looking for work and with a fear of unemployment, they tolerate much more to keep their pay check. The result is employees do whatever it takes to keep working.
- Contractor Convert to Full time – a slower economy produces less project work thus creates less work for contractors. These workers react in a predictable manner by taking full time positions at lower pay.
- Under-employment expands – with higher unemployment; people take any work to pay bills. Often taking positions they are over-qualified for, outside their career path and most likely at much lower salaries than they earned at their previous position.
These main crosscurrents result in very little voluntary employee turn-over during a recession. While companies benefit with lower voluntary turnover during the slow down, the downside of this stability is a pent-up demand for a change in employment. As soon as the layoffs stop and companies begin to hire again, people dust off their resume and start cruising the job boards. This causes a problem for companies. If a company has 1,000 employees and they need to grow by 10%, but their turnover has increased from 5% to 15%, hiring over 200 additional people than you hired the year prior is required. That adds a substantial unexpected cost to an organization.
The latest survey from Right Management confirmed we have now entered this phase of the business cycle. They surveyed 1400 people and found 84 percent planned to look for jobs in 2011, up from 60 percent last year.
Why do people leave?
Interestingly, the reasons for leaving are very stable and have a similar pattern post recession as that prior to the recession. In a survey from Salary.com here the top reasons:
| Inadequate Compensation |
25.7% |
| Inadequate Career Opportunity |
16.8% |
| Insufficient Recognition |
15.4% |
| Boredom |
9.0% |
| Inadequate Benefits |
7.6% |
| Inadequate Professional Development |
6.9% |
| Insufficient Job Security |
5.3% |
| Impact on Health or Stress Level |
4.7% |
| Poor Management |
4.5% |
| Undesirable Commute |
4.0% |
Some of these issues are difficult to resolve, but fortunately you can do things to improve some areas. One way to determine underlying issues is to implement an employee satisfaction survey for your team. You may find some gold nuggets that you can use to increase job satisfaction. This improvement will lead to productivity improvements and reduced turnover. Other good advice is to just listen to your employees and observe changes in behaviours. These are very good for determining employee happiness.
Some of the reasons for turn-over can be traced back to the initial recruitment. For example, commute times impact 4% of a person’s decision to leave. Our advice to our clients when recruiting people is that 60% of their hiring decisions should be on personality fit. Understanding a candidate’s career aspirations and motivations up front will reduce the possibly of their leaving because of career or boredom. Also, don’t over promise or over sell the job, you need to be realistic and honest about the duties and career growth.
Some minor improvements to understanding your team better and improving your hiring processes will help your organization manage through this turnover period.
Run Better Meetings
Are your meetings lousy?
Over 1.1 million meetings occur every day in Canada. Yet, we all complain endlessly about them even though our careers are immersed in them. The average professional spends 5.6 hours in meetings a week. This does not include preparation time or time spending scheduling the meeting.
In a study conducted by Doodle, it found that for average professional, 64% of those surveyed spent more than 5 hours per week coordinating meetings. However, the average person only spends half an hour preparing for a meeting. Basically, the part of a person’s job that takes 25% of their time is only given 30 minutes to organize. Unfortunately, people confuse organizing meetings with planning.
The results of poor meeting planning is: meetings are longer; less efficient; generate fewer results; require more meetings; create frustration at all staff levels; create conflict in meetings; other people dominate the meeting; and cost organizations billions of dollars each year in otherwise productive employee work time
It is was no wonder most professionals who meet on a regular basis admit to daydreaming (91%), missing meetings (96%) or missing parts of meetings (95%) and a large percentage (73%) say they have brought other work to meetings and 39% say they have dozed during meetings. If most people are getting little value from meetings, so why do we keep subjecting ourselves to them?
This CIO letter is looking to stop this insanity. Here is a list of action items one can use today to make your meetings better.
1. Plan for the meeting.
A safe rule of thumb is to spend an equal amount of time preparing as the meeting is long. If you are expecting the meeting to be an hour long then the planning should be an hour long. Items to be prepared beforehand are: agenda, hand-outs, decisions to be made presentation material and action items. Detail the agenda and share with the attendees prior to the date and silicate feedback and input.
2. Why are you having the meeting?
Begin your planning by determining the purpose of the meeting. What do you expect the result of the meeting to be? The goal of the meeting needs to be communicated to the attendees both prior to the meeting and at the beginning of the meeting.
3. Take notes.
There is nothing worse than have a meeting and have some great insights but a day later, no one remembers. Designate someone to take notes and distribute a meeting summary including action items with designated responsibilities.
4. Who must attend
Some people like to have an audience. But an office meeting is not the place or the time to practice being a toastmaster. Build a list of those who must be there and should be there. Send the invite to those who must be there and make it optional for those who should be there. Let them determine if they must be there.
5. Accountability
During every good meeting, great ideas come out and items need to be acted on. However, if no one is assigned a task or there is no method of follow-up, then the time and money invested in at meeting was lost. Have a schedule and timeline for follow-up.
6. Attendee interaction
If you have every attended a seminar or lecture, you know how great these people are at being putting to sleep or daydreaming. To avoid this syndrome, get the people involved; present their thoughts and opinions. Engaging the audience will make it more interesting and get more buy in.
Simply by trying one of these items, you will improve on your meetings. And in the end, is that not why you read this article? Like most things, you must make changes slowly and by making one a habit, that ensures that the action becomes effective.
Barry Johnston
VP Operations
What costs over $250K/yr but is not on any budget
What could possibly be a ¼ million dollar expense yet go unnoticed by Accounting? Employee Turnover (ETO) is the answer. If you are like me, you have a hard time believing ETO can cost an organization this much. Well, I took out my slide-rule and crunched the numbers. After a critical review, the result I came to was in fact a number higher than $250K. This CIO letter will help you understand ETO and give you some pointers on reducing it.
Just what is employee turn-over and how is it calculated? Employee turnover occurs when employees leave voluntarily and the position must be re-hired for. The ratio is used by HR and management to compare year over year within an organization and compares their numbers against an industry average. It’s typically used as a proxy for organizational effectiveness. It can also be used to indicate a company’s success with hiring and retention practises.
After years of working with this ratio, it has proven to me to be one of the most costly and seemingly intractable human resource challenges confronting organizations. Turnover affects the bottom line, whether you see it or not. Turnover is a silent but effective profit killer. The ratio is calculated by dividing the number of people who voluntarily leave during a year by the total number of employees. For example, if your department has 100 employees and 10 people leave, your turn-over rate is 10%.
In Canada the average ETO in all industries ranges from 10%-16%. In the U.S., from 2000 to 2008, the average turnover rate was 13.3%. However, rates vary widely over different job sectors. For example, Utilities industry turnover is 6.5% whereas healthcare is 15.5%. The Technology industry is in the middle at 10.8%.
Improving employee retention can have a significant positive impact on an organization. The Harvard Business Review reports that a mere 5% increase in employee retention results in a 10% decrease in costs, while productivity increases from 25% to 65%. Before we can start to manage these costs we need to be aware of what they are. Some obvious costs come quickly to mind, but there are also numerous others you may never have considered that can have a serious impact on your bottom line.
Here is a breakdown of costs:
Separation process costs: costs related to the time and expense required to exit an employee from the Organization. It typically includes: exit interview cost, cost of administrative issues related to separation, and cost of separation pay if applicable. Plus all the IT costs like security, keys, computers, files, and phones that are required after the person leaves.
Recruitment cost: cost of sourcing, interviewing, and hiring expenses of the replacement. It may include advertising expenses, agency fees, interview costs, cost of tests or exams and the difference between the new and separated employee’s annual compensation.
Training and orientation costs: are those related to the on-boarding process of a new employee and the training expenses occurred when getting new recruits up to speed.
Finally lost productivity costs: Typically includes costs of additional overtime, cost of additional temporary employee, cost of lost customers or profits, cost of lower productivity because of the negative feeling remaining employees may harbour and cost of additional employee leaves related to the termination.
Here is some math: Assume the average time to replace is 10 weeks, training is 10 weeks until full productivity, and average separation cost is 2 weeks. Then an employee earning $52,000 per year will have about $22,000 in lost productivity. Assume a team of 50 employees that has an ETO of 10% will result in losing 5 employees – costing a total of $110,000. The cost of recruitment typically is ½ year’s salary. When you add all these costs you arrive at $242,000 for only 5 employees per year. Change a few variables and the cost can be as high as 150% of an employee’s salary.
Lowering turnover can be tackled from 2 sides: Your current employees, and Hiring new employees:
Current Employees
1. Manage workload
- Make sure your team is not over taxed. Stay late a few nights to see who is constantly staying late to get work done.
2. Recognize good performance
- Rewarding and recognizing people for doing good work lets them know they are appreciated. Tangible and intangible rewards are a great way to show management appreciation for workers who excel.
3. Training and promoting from within
- Always a great policy to improve staff productivity and will also increase moral and employee loyalty.
4. Listen
- Listening gives your employees a sense of empowerment. They understand they are not alone and powerless when you listen. But you have to genuinely listen.
5. Exit interviews
- Learn why they are leaving so you can prevent the same problem from reoccurring.
6. Monitor total compensation
- Make sure your organization compensates staff at market rates.
Hiring
1. Contract to Hire
- Try before you buy. This allows both you and candidates to ensure there is a fit.
2. Personality screening
- Match your company profile with your target hiring group, not just skills but also for personalities.
3. Team interviewing
- Group interviews allow the team to buy in and support hires.
4. Tenure Bonuses
- Offering bonuses to staff for staying with the company over a set period can help employees get over hurdles. Recognizing anniversaries with a simple reward makes the employees proud of their tenure.
Employee turn-over is never a cause and effect but more about system feedback. Changing a high turn-over environment is not easy, but small changes can have huge benefits.
Dominate your next negotiation
Everything you don’t have, someone else owns it.
And when you own something, you rarely part with it easily. This is where negotiations begin. Whether it is service, product or time, we all go through negotiation to acquire any resource. We negotiate for everything we do, even when we pay the sticker price.
Before we start, it is important to understand what negotiation is. “Negotiation is a dialogue intended to resolve disputes, to produce an agreement upon courses of action, to bargain for individual or collective advantage, or to craft outcomes to satisfy various interests. It is the primary method of alternative dispute resolution.”
Since we do it so often, why are we not good at it? There are multiple hypotheses’: we don’t realize we are negotiating until we are half way through, we are impatient, we don’t like conflict, or we are greedy. Although, the true reason we are not great at negotiation is that we don’t plan.Read more