retention strategies for hot skills - g. evans & d. johnson trends in retention strategies for...
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Retention Strategies for Hot Skills - G. Evans & D. Johnson
TRENDS IN RETENTION STRATEGIES FOR
HOTSKILLS
March 19, 1998
Gail EvansThe Wynford Group
Daryl JohnsonErnst & Young
CANADIAN COMPENSATION ASSOCIATION
CCA Seminar - Calgary
OIL & GAS Exploitation Rotating Equipment Engineers Process Engineers Exploration - Prospect Generator Land Records Administration Engineering Technologists
What the ‘HOT SKILLS’ Are
Trends in Retention Strategies for HotSkill by G. Evans & D. Johnson
CCA Seminar - Calgary
INFORMATION TECHNOLOGY Progammers Network and INTERNET Software Developers Integrated Business Application -
SAP, PeopleSOFT, Oracle
Systems Architects Legacy Systems - Y2K - COBOL
What the ‘HOT SKILLS’ Are
Trends in Retention Strategies for HotSkill by G. Evans & D. Johnson
CCA Seminar - Calgary
OTHER AREAS Project Managers Accountants, Controllers Tax Accountants Marketing/ Business Analysts Human Resources
Compensation
Construction/Trades Journeymen
What the ‘HOT SKILLS’ Are
Trends in Retention Strategies for HotSkill by G. Evans & D. Johnson
CCA Seminar - Calgary
ADVANCED TECHNOLOGY Hardware Engineers - Telecommunications Electronic Engineers Specialized Research Scientists -
Biomedical Drafting/Graphic Designers
What the ‘HOT SKILLS’ Are
Trends in Retention Strategies for HotSkill by G. Evans & D. Johnson
CCA Seminar - Calgary
Why These Skills are Hot
Restructuring of organizations and work
Core Competencies - basis for competitive advantage
Lack of graduates in 5 - 8 year range
Changing TechnologyTrends in Retention Strategies for HotSkill by G. Evans & D. Johnson
CCA Seminar - Calgary
You think there’s a problem now …
North American Information Technology Work Force
1994 2M workers2005 3M workers
North American Job VacanciesToday 205,000Year 2000 290,000*
CANADIAN I.T. Job Vacancies1996 12,0001998 20,000*
*number under upward revisionSources: U.S. Office of Technology Policy Canadian Software Human Resource Council
Trends in Retention Strategies for HotSkill by G. Evans & D. Johnson
CCA Seminar - Calgary
Critical Issues for Retaining Technical Employees
0 0.5 1 1.5 2 2.5 3 3.5 4 4.5 5
Turnover
CompetitiveCompensation
Attracting SkilledResources
Training
Work Environment
Burnout
from Alberta Information & Advanced Technology Survey - Fall 1997
Trends in Retention Strategies for HotSkill by G. Evans & D. Johnson
CCA Seminar - Calgary
Retention TrendsCompensation & Rewards
Employee Referral Bonus becoming increasingly common
Signing Bonuses
recent graduates seasoned specialists , in-lieu of bonus, stock etc.
comp
Special Hot Skills Bonuses -e.g.: SAP, Project Mgmt, Eng. Trends in Retention Strategies for HotSkill by G. Evans & D. Johnson
CCA Seminar - Calgary
Frequently Used Reward & Recognition Programs
0 5 10 15 20 25 30 35
Employee Referral Bonus
Signing Bonus
Project Milestones
Special HotSkills Bonus
Retention Bonus
from Alberta Information & Advanced Technology Survey - Fall 1997
Trends in Retention Strategies for HotSkill by G. Evans & D. Johnson
Key Components Of Incentive Compensation
• Relevant to individual or team
• Alignment of goals and outcomes
• Influence on outcomes
• Balance of risk and reward
• Retention of valued employees
• Motivated by intrinsic value
• Alignment of goals
• Empowered employees
• Continuing performance
• Short-term motivation
• Specific behavior reinforced
• Rewards specific performance
RESULTS
RESULTS
Short Term
Incentives
Longer Term
Incentives
Specific Goal
Effort ValuedReward
Results
ValuedReward/Feedback
Effort
© Gail E. EvansAligned Goals
IMPACT OF REWARDSResults
Trends in Retention Strategies for HotSkill by G. Evans & D. Johnson
CCA Seminar - Calgary
Short-term Incentives
60% of employers have short-term incentives in place.
8% will implement in 1998.
Cash bonuses preferred
30% Providing Profit Sharing
Common for professional employees and above.
Trends in Retention Strategies for HotSkill by G. Evans & D. Johnson
CCA Seminar - Calgary
Short-term Incentives
Rewards based upon performance :
of Company 60%of individuals 50%of team/BU’s 35%
Trends in Retention Strategies for HotSkill by G. Evans & D. Johnson
CCA Seminar - Calgary
Long-term Incentives
30% already have in place.
5% plan to implement in 1998.
Stock preferred approach.
Gradually being provided to lower levels.
Trends in Retention Strategies for HotSkill by G. Evans & D. Johnson
CCA Seminar - Calgary
Stock Plans
Stock options preferred
Also employee stock purchase & phantom plans
Rewards earned primarily upon individual performance, except Sr. Mgmt.
Company performance typically reflected in stock price.
Trends in Retention Strategies for HotSkill by G. Evans & D. Johnson
CCA Seminar - Calgary
Retention Bonuses
Hottest long-term trend
Particularly for long-term projects, R & D Based upon:
time alone achievement of specific performance
targets e.g. budget, safety Structure - payout in 2-3 years
Trends in Retention Strategies for HotSkill by G. Evans & D. Johnson
CCA Seminar - Calgary
THE EMERGING ORGANIZATION
Workers
Project Managers
Staff Functions
Mid-Mgmt
EXEC
Core Staff
EXEC
Coaches
Project Managers
Knowledge Workers
Trends in Retention Strategies for HotSkill by G. Evans & D. Johnson
CCA Seminar - Calgary
The New and Emerging Workforce
Greater Workforce Diversity Aging Population “Free-Agent” Employment Status Home/Work Life Balance Increasing
Priority Increased Expectations of the
Employment RelationshipTrends in Retention Strategies for HotSkill by G. Evans & D. Johnson
CCA Seminar - Calgary
The Social Contract
Job SecurityBenefitsCareer LadderIncomeBig OfficeOther Perks
A reasonable day’s workLoyalty and dedicationCommitmentWillingness to obey
Challenging WorkTraining and learningFair Compensation
Work in proportion to remunerationConstant skills upgradingHonesty and loyalty
OLD
NEW
Trends in Retention Strategies for HotSkill by G. Evans & D. Johnson
CCA Seminar - Calgary
Why Companies Lose Hot Skills
Poor project management Job restructuring Better opportunities Too many hours away
from home Quality of life suffers “our industry is not a ‘sexy’
one” Lack of
leadership/frequent change
Lack of career direction More money Technology is not a high
priority Opportunity to work as a
contractor Internal opportunities Desire to work in a
smaller, more entrepreneurial organization
Trends in Retention Strategies for HotSkill by G. Evans & D. Johnson
CCA Seminar - Calgary
IT Best Practices: Career Effective technical recruiting methods include
website postings and partnerships with universities/technical institutes
T&D opportunities are considered a high priority
Longer-term career paths are a concern for those dedicated to projects
Trends in Retention Strategies for HotSkill by G. Evans & D. Johnson
CCA Seminar - Calgary
IT Best Practices: Job Content Change of focus from job to role
Performance Management processes now often multi-rater
Professional development opportunities and project assignments are increasingly replacing pay as important consequence of performance
Trends in Retention Strategies for HotSkill by G. Evans & D. Johnson
CCA Seminar - Calgary
IT Best Practices: Affiliation The IT workplace is becoming more
responsive to the balance between work and personal life telecommuting job sharing part time work
IT titles are being simplified to reflect more dynamic, project-oriented roles
Increasing number of contract workers
Trends in Retention Strategies for HotSkill by G. Evans & D. Johnson
CCA Seminar - Calgary
Usage of Work Environment Strategies
0 10 20 30 40 50 60 70 80
Flexible Work Hours
Casual Dress
HomeOffice/Telecommuting
from Alberta Information & Advanced Technology Survey - Fall 1997
Trends in Retention Strategies for HotSkill by G. Evans & D. Johnson
CCA Seminar - Calgary
Strategies For The Future
Cash is key Control base salaries Increased use of variable pay Signing bonuses continue Retention bonuses tied to performance Alignment with organization Career development opportunities
Trends in Retention Strategies for HotSkill by G. Evans & D. Johnson
CCA Seminar - Calgary
Reward Strategy Trends
Role/Person-Based PayJob-Based/Internally Equitable Pay
•Relevant Market-Based•Pay for Development•Skill/Competency-Based
Reward Customization
”One-Size-Fits-All” •Personalized Risk Levels•Pay based on Individual Value of Rewards
Trends in Retention Strategies for HotSkill by G. Evans & D. Johnson
KEY SUCCESS FACTORSKEY SUCCESS FACTORS
BASE PAY
COMPENSATIONCOMPENSATIONSTRATEGIESSTRATEGIES
VALUED BY INDIVIDUAL EMPLOYEEVALUED BY INDIVIDUAL EMPLOYEE
ALIGNING REWARD STRATEGIES FOR KEY ALIGNING REWARD STRATEGIES FOR KEY KNOWLEDGE WORKERSKNOWLEDGE WORKERS
INCENTIVE PAY
STRATEGIC ORGANIZATIONALSTRATEGIC ORGANIZATIONAL GOALSGOALS
SATISFIED EFFECTIVE SATISFIED EFFECTIVE EMPLOYEESEMPLOYEES
DEVELOPMENTDEVELOPMENT STRATEGIESSTRATEGIES
CORE COMPETENCIESCORE COMPETENCIES
KEY KNOWLEDGE WORKERSKEY KNOWLEDGE WORKERS
THE WYNFORD GROUP