Staff incentives needed as IT sector heats up again

The US IT job scene is strengthening

The IT Industry hasn’t quite returned to the crazy days of dot-com mania, when companies provided free meals, gift certificates and concierge services to retain top IT talent. However, US IT executives report an increase in employee turnover and the need to focus more on retention.

“There’s been a return to hiring as the economy has strengthened and certainly concerns about retention of talent connected to legacy systems and critical technology and business initiatives,’’ says David Foote, president of Foote Partners, an IT research firm. “Our findings indicate the re-emergence of talent wars but on a smaller scale.”

One of the factors driving the need for IT expertise is that employers are becoming more selective about which network operations and applications they outsource. Some organisations that haven’t upgraded their software or hardware for a few years have reached the point where they need to overhaul their systems, while merger and acquisition activity spurs demand for systems integration, Foote says.

With increased demand for IT talent, salaries are going up. In a study released last month, Foote Partners found that overall pay for non-certified technology skills had grown 3.8% and certified technology skills 1.3% in the first half of 2005. The skills with the greatest pay growth were operating systems, networks, databases and applications development. 18 months ago, pay for these same skills was dropping 7-10% per year.

Michael Benedetto, associate director of IT at the American Museum of Natural History in New York, says during the last 18 months his staff has overhauled the infrastructure and security systems on the museum’s network. Recent purchases include leading-edge DNS appliances that replaced aging Unix servers running BIND software.

In addition to raising the network’s security profile, through DNS appliances, patch management and intrusion detection, the museum is upgrading its switching and routing infrastructure, adding multicast video and deploying wireless.

So far Benedetto is not seeing much turnover in his 30-person IT shop, five of whom are dedicated to network operations. The museum is a non-profit organisation, and its IT salaries are comparable to other local non-profits.

“We’re not having a mass exodus of people. The market is definitely opening up a little bit, but a lot of people have stayed because of where we work,’’ Benedetto says. “I can’t tell you one reason why everyone is staying, but [access to new] technology may be a big part of it. Because we do most of our work ourselves, most of our people are challenged.’’

Improving benefits and offering work-from-home policies is not enough to ensure employee retention, says Barbara Marchetti, president of the Preferred Resource Group, an IT recruiting firm.

“If companies don’t take the time to sit back and address how they’re going to attract and retain IT talent, they’re going to be back in two-year hiring cycles,’’ Marchetti says. “What gets IT folks jazzed is exposure to the newest and the latest technology.’’

Marchetti also recommends companies provide ongoing technical, business and professional training for IT staff.

“IT folks need an education in how IT affects the enterprise, for internal and external customers,’’ she says.

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