IT staff retention is shaping up to be one of the biggest challenges facing CIOs in 2012.
Three trends are bringing this issue to the forefront:
• Corporate IT hiring is on the rise, tempting IT professionals with higher pay and opportunities for advancement if they switch companies.
• Younger techies change jobs frequently, averaging only a year or two in a position before switching
• Baby Boomers are reaching retirement age, with an average of 10,000 U.S. citizens turning 65 on a daily basis for the next 18 years.
IT staff turnover is "probably my most significant issue right now and has been for the past 12 to 15 months," says Louis Trebino, CIO and senior vice president at the Harry Fox Agency (HFA), a New York City-based provider of rights management, licensing and royalty services for the music industry.
Trebino says he has a loyal staff of developers working on core applications who have been with the company for five to 15 years. But he is experiencing a significant amount of turnover among Java developers, who are staying for a year or less. The turnover on his Web development team is making it harder for HFA to change its business model as the music industry migrates online.
"Without having experienced resources - even nine to 12 months with the company and knowing a bit about our business - it elongates my delivery time," Trebino says. "It puts us in a really uncomfortable position to have this kind of turnover because knowledge keeps walking out the door. We invest in training people and bringing them up to speed to where they need to be, and boom they're gone. That has been my biggest struggle and concern."
IT staff turnover is rebounding from its lowest point in a decade. In 2010, only 3% of IT workers left their jobs voluntarily. In 2011, IT staff turnover jumped to 5%, Gartner says.
Lily Mok, research vice president at Gartner, says CIOs need to evaluate their staff and figure out which personnel are critical to the IT department's success because of their skills and experience and make sure those people feel valued.
"You need to know who is leaving and why they are leaving," Mok says. "Even if you have 1% turnover, that might be too much if these 1% are in critical roles and have critical skills."
Job opportunities for IT professionals are expected to remain plentiful in 2012, leading to more opportunities for key employees to leave.
Job postings "are up 12% year-over-year in November, and November is a pretty slow month," says Alice Hill, managing director of the Dice.com IT job Web site. "We think things are going to stay steady in 2012. We don't expect a slowdown. The tech unemployment rate is 4.1%, so it's a pretty good climate for IT."
In a December survey of 1,200 IT hiring managers, Dice.com found that 65% will add IT professionals in the first half of 2012 and a significant number -- 27% -- plan to expand their IT workforce by more than 20%. Most employers are looking for IT workers with six to 10 years of experience, followed by workers with two to five years of experience.
IT professionals are showing a new-found willingness to switch jobs, experts say.
"Salaries were flat throughout this whole recession," Hill says. IT professionals "are doing more with less, having to do all the work for the people who weren't hired. This has created the climate for people wanting to look around."
Dice.com is reporting IT shortages in many states, including California, New Jersey, Texas and New York. Demand is also outstripping supply for IT professionals with skills and experience in mobile application development, virtualization and cloud computing.
The shortage of IT professionals will get worse as Baby Boomers retire, especially in the government sector.
Mok recommends that CIOs compile a workforce plan two or three years into the future, including the most critical roles, the demographics of the people in those roles, and the risk to the organization if those people leave. She says CIOs should make an effort to have Baby Boomers transfer their knowledge to younger staff before they retire.
"How many organizations do formal workforce planning? Less than one third," Mok says. "It's not just about IT staff skills and retention, but it's about the overall long-term ability of IT to deliver the service and the quality of the service that the business needs."
All is not lost for CIOs with limited IT budgets who want to retain their staff. Studies have shown that IT professionals are willing to take a pay cut for a flexible schedule, including work-from-home arrangements.
"There are opportunities around retention when you offer a more modern workplace," Hill says. "Web cams are cheap. You can very inexpensively set up a virtual workforce and give people a day or two a week to work from home...This plays well with younger people, who want to do more on handhelds and more from home. They're not into a 9-to-5 scenario."