Employers Covet Newbies, Diss Existing Workers

Don Tennant

The results of a recent survey of IT employers and recruiters suggests that companies are much more concerned about luring new talent than about retaining the talent they already have. As the IT unemployment rate continues to decline, that strategy will be an increasingly risky one, because existing tech employees aren't nearly as satisfied as many companies seem to think they are.


The report, released by IT employment services provider Dice.com, showed that one-third of the employers and recruiters surveyed are finding they have to offer better financial incentives and other perks, like a telecommuting option, to attract new tech employees. With the IT unemployment rate now having fallen to 4.3 percent, according to the Bureau of Labor Statistics, tech workers are in a position to be a lot more demanding than they've been in the past 18 to 24 months.


What's puzzling about all of this is that despite an improved economy that's giving tech workers more choices, companies aren't being nearly as attentive to keeping their existing employees happy. The survey revealed that only a quarter of respondents offering additional incentives to new hires are bothering to increase the salaries of existing employees to align with what the newbies are getting. They appear to be more concerned about managing the disparity than eliminating it.


I spoke last week with Dice.com Senior Vice President Tom Silver, who warned that employers need to wake up and recognize that their existing workers aren't going to put up with being underappreciated for much longer:

Employers think they're doing a pretty good job of meeting the needs of their current employee base, but they're really not. Employers have gotten used to the fact that because the market was difficult, key employees either won't take the risk [of leaving], or don't have anyplace new to go to. Working conditions have been difficult, and employers have gotten used to the fact that maybe they don't have to pay too much attention to employee satisfaction. As the market is starting to change, employers are at a risk of having a real blind spot. They don't necessarily understand or aren't fully cognizant of how frustrated many in their workforce currently are. What we're starting to see happen is that as the market improves, and as the BLS numbers move in the favor of the tech employee, the likelihood of them wanting to leave goes up, and the possibilities for them in terms of new opportunities open up.

A big part of the problem, according to Silver, is that companies simply don't have the flexibility with existing employees that they do with incoming hires:

That's an issue that so many companies need to come to grips with. It always seems to be easier to pay a little extra to bring in somebody new than it is to pay a little extra to keep somebody at the organization happy. Think about the types of rules and structures that organizations have in place in terms of salary grids and recommended increases. It's very tightly controlled, and very tightly managed, for fear that if I give something extra to one employee, I've got to give that same something extra to somebody else. Maybe I don't want to do that. So companies are, I think, too rigid in the way they manage their comp policies for existing employees. And as a result, even if they wanted to make some changes to keep one or two people happy, they'd have to fight through a lot of internal process, and would have to go through a lot in order throw some additional benefits to one or just a select group of internal employees. We see that happen all the time.

Companies would be well advised to review their compensation policies and procedures to ensure they can offer the same pay and incentives to current employees as they can to new hires. If they can't, those polices need to change. The loss of institutional knowledge that such policies necessarily exacerbate is only one of the reasons. Simple fairness is an even more important one.

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