Loyalty pays in downturn, but skills matter most

Those who made the most of the recent IT boom years hopping from job to job may now be paying the price. Overseas trends suggest that firms are more likely to make redundant younger staff who have a history of moving jobs frequently and retain older workers

Those who made the most of the recent IT boom years hopping from job to job may now be paying the price.

Overseas trends suggest that firms are more likely to make redundant younger staff who have a history of moving jobs frequently and retain older workers — both as a reward for their loyalty during the good times and because of their institutional knowledge.

This is in contrast to previous recessions, during which older workers were the first to go in cost-cutting drives as they were seen as more expensive.

Computerworld US says a study of 3000 firms revealed 26% of those laid off had been employed for less than two years. In 1998, at the height of the US labour shortage, workers aged 35–54 stayed at their jobs an average 6.6 years, while those aged 20–34 stayed in one place for just 1.9 years. It’s almost as if the job market is striking back. The latest US Bureau of Labor Statistics reports that the unemployment rate for those aged 20–34 is now 7.9%, but just 4.8% for the older group.

The magazine reports US firms are keen to retain the skills of older staff who can rebuild the business when good times return and consider there is less risk laying off people who would probably shift anyway.

But companies need people with a proven track record, and people are being laid off after eight to 10 years’ service if they are “not perceived as providing the company with a return on investment, say recruitment people. In other words, your staff’s productivity and overall value to the company are what matter most.

Auckland Regional Council CIO Tony Darby confirms this. “It’s about performance and behaviour.” Loyalty is just one part of the equation and what matters is the “total” relationship, he says.

Last-in, first-out sends a bad message to potential staff, Darby says, not to mention current younger staff, who could well be your future. Darby admits younger staff are harder to keep though he believes that after five years their loyalty tends to increase if an employer is willing to show flexibility.

He disagrees with the view that job-hoppers have a stigma, except for those who return to their old employer as consultants, suggesting that employers are perhaps too loyal to them.

Logical Networks HR manager Gary Saunders says a loyal performer will always get preference over a new high performer. But he believes there is no great stigma attached to job-hopping and says Logical wants people only as long as they are good workers.

Logical, Saunders says, recognises the value of older workers, and would want to keep a balance between the innovative and exciting — usually young — and the wise, experienced and calm — usually older — staff.

Auckland-based HR consultant Nick Hamilton of Quint Consulting says many of his clients have a “last-on, first off” policy, and that means job-hoppers are the first to go. “If people are job-hoppers, for whatever reason, they are likely to remain job-hoppers in the future,” he says.

Recruiter Craig Parsons, Auckland manager of Icon, confirms job-hoppers are the most difficult to get into a company. “Companies want to see stability and commitment in a person.”

The last on, first-off is more often applied to generalist positions. But for more specialist IT jobs Parsons argues the skill sets are most important and age is not an issue.

Auckland software entrepreneur John O’Hara agrees too much job-hopping can be a bad for IT professionals but for IT projects using contractors and consultants he sees an analogy with a film like Lord of the Rings. All the producers and directors, for example, are independent contractors who come together to make the film and disappear once they have finished it, he says. And only some of the original crew might return, joining with fresh people, when it is time to make the next movie.

“I think we are seeing this evolve in IT. I don’t think it’s a bad thing because skills evolve through working with others and it’s like a rising tide — all the boats floating on the water rise together,” O’Hara says.

O’Hara and others say that as long as jobs have been done on time and relations with employers have been good, a contractor should have no problems.

It appears that for anyone in any job, while loyalty is important, how good they are at their job is what matters most to employers. But for those who have shifted a lot, the advice seems to be: give companies a chance and consider carefully before moving.

Have better reasons for leaving than juicier offers or on-the-job boredom. Another suggestion is to build function-based resumes, focusing on skill sets and accomplishments, as opposed to a more traditional chronological resume.

Greenwood is Computerworld’s HR reporter.

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