High turnover brings out golden cuffs

Nearly half of the companies surveyed by recruitment company Candle New Zealand either use 'golden handcuffs' or are looking to implement them. Golden handcuffs involve paying staff above their salary as a means of retaining them for a set period of time. All of the organisations that have golden handcuffs use them for development people.

Nearly half of the companies surveyed by recruitment company Candle New Zealand either use "golden handcuffs" or are looking to implement them.

Golden handcuffs involve paying staff above their salary as a means of retaining them for a set period of time.

Candle's IT Retention Survey asked Auckland and Wellington companies if they used the practice. Of the 22 organisations (including IT shops, financial institutions, insurance, government departments) that responded, about a third have some form of golden handcuff option, and another 14% are considering implementing them.

All of the organisations that have golden handcuffs use them for development people, while only 18% use them for management, 23% for operations and 14% for support staff.

Candle New Zealand's manager of HR services, Craig Parker, expects the number of companies using golden handcuffs to increase, but adds that it's not yet known how useful they are.

He says it's difficult to measure their effectiveness at this stage because the concept is still fairly new in the IT sector and turnover is still running "pretty high".

He believes that after the year 2000 there may be less need for golden handcuffs, but adds that by then they may have become entrenched in the IT industry.

IT staff spoken to by Computerworld weren't complementary about the practice. One person had been at a company where they were used and says they caused egotistical and outlandish behaviour from people who had them.

He believes they don't work as well as some managers might think, and says the practice is unfair on other employees who are left guessing their true worth to the organisation.

A systems development manager says the most effective — but negative — type of golden handcuff he has seen was a company loan. "A 3% loan secured by the company is hard to re-finance at the drop of a hat." He says that to keep staff many areas need to be addressed: salary, future development, challenges, and even "fun".

A programmer reckons the need for golden handcuffs is a symptom of the "she'll be right" style of management which ignores things like ISO (International Standards Organisation) and quality. "My feeling is that, if a company has to pay someone extra to carry on working for them, then they can't have been all that good to work for in the first place."

He says New Zealand is the worst country he has worked in when it comes to looking after technical staff. He blames a lack of global experience and exposure by management. "When I did my management training it was drilled into me that people came first. They must have the best working environment where they can have fun, be creative, and get their work done easily."

The survey also asked if companies had identified key staff to be available during the Y2k conversion period (from about September 1999 to March 2000). Fifty-nine percent said yes but only 32% of them had put in a extra remuneration or benefit strategy.

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