CIOs spend a lot of money on their IT infrastructure, but talent is becoming even more expensive.
In its recently released Salary Guide, Robert Half Technology said compensation for entry-level staff will jump 3.5 per cent this year, with operations managers and data security analysts enjoying the highest raises in base compensation.
Sandra Lavoy, vice-president with Toronto-based Robert Half Technology, said the increases were a reflection of a shift in the overall health of the economy and of the demand for skilled labour.
“They had no choice,” she said. “When we went through the recession, salaries had gone flat or had decreased . . . what we’re seeing now is people sit still when there’s a downturn because they’re afraid to leave in case it doesn’t work out. Now people look around.”
Christina H. Medland, a partner in pension and employment at law firm Torys LLP in Toronto, said it could be that the technology profession is maturing to the point where it is adjusting to market norms.
“The technology industry has always had a higher weighting of incentives or pay-per-performance,” said Medland, who also writes a blog on executive compensation. “It was common to take lower than market base salary and higher than margin option grant.”
Lavoy said companies are going to have to be creative as they adjust compensation packages to retain staff long enough to do succession planning.
“If you’re working on projects, you can’t have turnover,” she said. “Some skill sets are hot – for people to stay in their places, you have to give yearly bonuses.”
Robert Half’s Salary Guide said there were regional differences in terms of the demand for IT talent, but the oil and gas industry would be among the biggest employers of technology professionals this year.
Computing Canada’s editorial director, Martin Slofstra, recently spoke with three CIOs to get their perspective on the war for talent and developing staff to deal with business issues: Len Nicolas, CTO and COO of Nygard; Wally Curry, CIO of Enersource; and Danielle Savoie, CIO of Cirque du Soleil.
What follows is an edited transcript of three separate interviews, woven together to show the common threads that concern them all.
– Shane Schick
CC: To what extent are we facing a skills shortage in the IT industry?
LEN NICOLAS: Currently, my job right now is employee retention. It’s kind of strange but what I think is happening, at least in Manitoba, is a shortage of .Net developers. And I think it’s happening everywhere, if I don’t have people, forget missions and strategy, I can’t do anything.
WALLY CURRY: If you talk about CIOs in general, I think we are going to have a staff retention problem. There is going to be a void in qualified people that we have not had in the last few years, including at the CIO level. We are going to see turnover.
DANIELLE SAVOIE: The issue of talent is there for every company, especially in IT. At Cirque du Soleil, 2007 will be a very big year for us. We have five productions concurrently in development and I have to support my colleagues to ensure they have all the systems and the tools for the growth. They need to have information systems to support both their operations and their decision-making process. I am very much involved in the growth of the company.
LN: This is what’s taking most of my time, in terms of interviews and trying to find out what is happening. Worse yet, the consulting firms are raiding private companies such as ours, where we have dedicated ourselves to technology, we have trained people, we have hired juniors, and now we are ripe for picking.
WC: It’s going to be harder and harder to replace good people at the salary we are paying them. This is going to become a serious issue for the industry. We are fortunate: we have a very stable staff and I don’t see a challenge that way. But there is the other side: we are not trying to increase the size of our staff, we are trying to do more with less.
CC: What are you doing to encourage and motivate, and, essentially, retain staff?
LN: First of all, I try to understand the mind of the developer. I try to find them interesting projects to work on, a good environment, good pay, bonuses, rewards, more incentives, more training, things like that. We want to make sure they are happy to come to work. And just when I think things are okay, the next guy comes along and says, ‘Your skills are so much in demand,’ and they offer $20,000 more.
Then I am finished. There are certain points where I can’t even touch that salary.
WC: It’s very hard because we are in an industry where things are not as solid as in a normal IT shop. We try to reward people by trying to be more flexible if somebody has sickness in their family, and things like that. We try to cover it off in the softer areas. We try to make our work environment a lot more friendly. From that point of view, it is fun to come to work, as well as being productive.
We also spend a lot of money on training people and helping them look for challenge, and we’ll stretch them. If somebody has an interest in a programming language, we will do whatever we can to give them the opportunity to learn as long as there is some benefit to us.
DS: We, as CIOs, are more and more training people to convert business specifications into technology requirements and systems. We try to support the business. The main challenge is to be able to communicate easily and to understand the technology. We are an integrator, a translator and a facilitator. I think this is the new business model of IT people in North America. The repetitive tasks are being transferred more and more to Asia.
LN: I started to go with entry-level about a year ago because I had enough seniors to mentor them, but if your seniors get picked off, all of the sudden, you have juniors who are basically in a difficult situation. You are doing trial and error rather than relying on experienced professionals.
CC: Would outsourcing help?
LN: I have mostly custom applications. Because of that, I have to have another group of people here called business analysts and project managers. The nice thing about a shop like mine is that the knowledge is among the developers. The specifications are high-level and they can develop pretty good code. You start outsourcing it and you have to give more detailed specifications. Then you have to manage the scope of the project and that is discipline you have to acquire, although with the skills shortage, it may be one I will have to acquire.
DS: We have decided to outsource the evolution of these applications, so I don’t see this as the challenge. The greater challenge is having people who are versatile enough to be able to establish strategy and make sure the operations are performed by the outsourcer.
WC: We are trying to become more attuned with business, so we have less time for the pure IT function. We are not only fixing things but spending more time explaining details with people making sure they are okay with what we are doing. That puts some additional strain on our staff, and that means overtime, and you do have to worry about burnout and that type of thing.
CC: How does this affect you in terms of your ability to deliver on the business side?
LN: I am a custom shop and we build all our software. We purchase some software but it has to connect to (our systems). Most of our applications are custom-built because it provides a definite competitive advantage. The technology that we have developed as a company has made us very competitive and has given us inroads to more business. We are very agile because we own the code and can modify it. To do that, though, you have to have a great team. It’s e-commerce, it’s supply chain management, it’s business intelligence, it’s retail, it’s manufacturing, it’s financial, it’s all the applications. I have purchased some of the applications, obviously, but the ongoing maintenance and customization is wrapped up in a .Net environment. It’s definitely something I have to concern myself about.
DS: I have to implement knowledge management where the memory of all our shows is currently maintained. I think knowledge management is something at the heart of and that is the future of IT. It’s less and less about the technology and more and more about the business challenges related to information. The companies that are successful are the ones able to preserve and re-use and leverage their knowledge. This is the major part of my new mandate.
WC: We understand from a technical aspect how all the systems are integrated. We can’t afford to make purchasing decisions on software without understanding the total ramifications.
If we haven’t tried to listen to why they need it, we can’t communicate with them on a business level and say to them, ‘No, that won’t work.’ We have to become more attuned and forward thinking to say, ‘Hey, where is the business going and how do we enable that?’
We become enablers by looking at the software or the upgrades and how that can impact the business.