IT Staff Don't Stay Put
The voluntary departure rate among IT professionals remains high, despite projected single-digit growth rates in the industry.
The voluntary departure rate among IT professionals remains high, despite projected single-digit growth rates in the industry.
Attrition is apparent among the IT professional community, according to findings from a META Group, Inc. report. While many employees seem to stay put during tough economic times, the survey of 600 medium-sized to large American corporations indicates that there is a high voluntary departure rate in IT departments across the country.
“Surprisingly, given the difficult economic climate, voluntary departure rates at technology companies continue to be high, with the average turnover for all reporting companies at 10 percent,” said Maria Schafer, program director of META Group’s Human Capital Management (HCM) and author of the study. “That’s down by only a single percentage point from 2001. Although turnover has improved for many companies, concerns about retaining valuable employees are quite high.”
META Group clarifies that a turnover rate below 10 percent is relatively healthy, while higher than 10 percent turnover generally indicates an organization with fundamental issues that affect productivity and morale. META Group finds that the highest voluntary departure rates were reported in the transportation and distribution industry (20 percent), followed by media/publishing (18 percent) and healthcare (17 percent). The causes cited most commonly were economic conditions (33 percent), organizational restructuring (18 percent), and available skills (18 percent).
Gartner Dataquest predicts that the worldwide IT services industry is on track to reach $557 billion in 2002 – a 2.8 percent increase from 2001 – and revenue is projected to grow 7 percent in 2003 to $597 billion, increasing to $644 billion in 2004. By 2005, IT services will total $696 billion.
Gartner Dataquest analysts indicate that IT services companies need to prepare for a longer-term future where double-digit growth is the exception rather than the rule.
However, even slow growth could mean more options for IT professionals and companies are going to have to focus on retention, rather than recruitment, to cultivate an environment that fosters IT longevity.
META Group addressed these issues with the survey respondents and found that the retention issue is split nearly evenly, with more than half indicating it is a “very serious” or “fairly serious” issue. Interestingly, when asked about types of bonuses rewarded to IT staff in 2002, survey respondents indicated that the number of retention bonuses rewarded in 2002 grew from 12 percent to 44 percent in 2002. Among the IT skills that were considered most difficult to retain were e-commerce/Internet skills (24 percent) and application development skills (20 percent).
“Managing human capital as a competitive asset in both good times and bad is critical to the survival of Global 2000 companies,” said Schafer. “The data clearly indicates that those who don’t aggressively court and develop IT staff through the downturn and into the long term will find themselves in crisis mode.”
Other findings from the META Group study include: