Raises and Other Deal Sweeteners to Retain Top Talent

Susan Hall

Two surveys indicating an uptick in IT hiring also spoke to the challenges of retaining key talent. Two other surveys, one by HR consultancy Mercer and one from Hay Group, say the average raise will be 3 percent next year, reports FINS.

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It quotes Mark Reilly, a partner at 3c Consulting in Chicago, saying:

This year, everyone is getting a bump. There's a little bit of a make-up factor at play.

Still, that's still not keeping with the 3.6 percent annual rate of inflation. This appears to be across the general work force, not specifically in IT. Indeed, Janco Associates recently reported that IT salaries continue to be essentially flat. In its midyear report, it found the total mean compensation for all IT pros in 73 job categories that range from CIO to data entry operator grew by just 0.35 percent to $77,873 from $77,604.


Yet the story mentions that enterprise software vendor Red Hat plans to give raises averaging 3 percent this month. This year and last, the company waited until midway through its fiscal year to better evaluate the economy and its budget. Its 4,000 employees also will receive quarterly bonuses of 5 to 30 percent of salary.


Of course, Google, amid a fierce talent war and in pricey Silicon Valley, doled out across-the-board pay raises of 10 percent late last year. Microsoft, too, has turned to cash, rather than stock, as a means to retain key talent. The recruiters I've been talking to overall have told me that hiring managers can expect to pay more for IT pros, especially those with the most in-demand skills and in markets where the talent pool is especially limited.


Meanwhile, in this article on HP's site, writer Pam Baker talks about the push/pull mechanics of retention. You want to eliminate things that would push your employees away, such as lagging salaries or a bad boss, and minimize the pull from rival employers.


She writes:

"When viewing a talented associate's compensation, view it in the context of how much you would be willing to pay to bring in that type of individual from a competitor," says [Sean Ebner, regional vice president of staffing firm Technisource]. Would you pay recruiting fees or a signing bonus? Keep this in mind when considering an associate's annual merit increase. "If you are paying your associate well, it takes away some of the allure another company might be able to present by lessening the amount of additional compensation they could expect by leaving.

Baker also offers these five tips for making your staff "unpoachable":

  • Find deal sweeteners beyond pay that appeal to your specific workers. She calls that "sugar vs. saccharin" deal sweeteners. A commenter on the piece named Dean put it this way:
Why doesn't management ask their employees what they like and dislike and why they stay and what would drive them away? Guessing is often wrong.
  • Make the benefits in working for your company crystal clear. That can be a challenge, opportunity or other rewards. Lee-Anne Farley, director of talent acquisition at TriNet, advised:
Empowerment and ownership are key to this so encourage a culture where employees have a real stake in the company and genuinely feel that they are building for the future, and recognize them as being excellent at what they do.
  • Offer life, not just a job. Flexibility and the ability to telecommute are especially popular. Louisville IT recruiter Ian Erskine of New Age Technologies told me he'd have no problem filling jobs if companies allowed workers to telecommute. And in a Dice survey this spring, more than one-third of technology professionals said they'd take a pay cut of up to 10 percent if they could telecommute full time.
  • Offer opportunities to learn. In another Hay Group study, one looking at perceptions of fairness in company rewards, opportunities for career development topped the list of employee concerns about reward fairness. It also was the No.1 retention issue for workers, more than salary or bonuses. Vincent Milich, director of the IT Effectiveness Practice at the management consulting firm, told me in a March interview that ability to see a clear career path for themselves is vitally important to IT pros, and providing that can spell the difference in whether they stay or go.
  • Let Them Finish. In major corporations, especially, projects get killed midway through or radically changed. Dr. Jim Anderson, an IT management consultant at Blue Elephant Consulting, says the No. 1 complaint he hears from the IT trenches is that they never get to the end. He says:
A big party needs to be thrown, and lots of meaningless awards need to be given out to everyone. They all say that these things really don't matter, but they do.


Baker sums up by saying:

The one rule to remember is that you are trying to attract and retain human beings, not robots or slaves. Offer them a way to live their lives, work with pride, and create, and you will not only retain a talented staff but the company will likely benefit far beyond your dreams.

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