If you think you’re going to save money and keep your staff happy by offering them more vacation time instead of a raise, you had better think again. A recent survey by Irvine, CA-based technology search firm BridgeGate LLC indicates that the best way to buy employee loyalty is to do just that—“Show ‘em the money.”
BridgeGate surveyed more than 600 full- and part-time tech employees in February, 2001,and found that approximately 50 percent rated a raise as the number one issue that would keep them with their current company.
This is the first time in the annual report’s three-year history that more money ranked higher as an incentive than the combined total of benefits, flexibility, stock options, and training.
Ironically, the current economic conditions make many companies unwilling or unable to pay higher salaries. In this article, we’ll examine how the shifting economy may impact your ability to hire and retain IT workers.
How much does money count?
While the BridgeGate survey showed that employees are putting a premium on higher pay, it’s unlikely your budgets will be expanded in the near future to provide additional incentives for your staff. Most companies will just ignore IT staffers’ economic anxiety, hoping it will go away, said Dudley Brown, managing director of BridgeGate.
Consequently, employee relations may deteriorate as workers look to leave.
“In this new economy, there’s a real mercenary attitude on both sides of the table,” Brown said.
This attitude is likely to be present even at higher pay levels. The BridgeGate survey showed that of respondents whose household income was less than $25,000, 47.5 percent said money would influence them to stay with an employer. Surprisingly, this response was similar among those making more than $75,000 a year, with 52.5 percent putting a raise above any other nonmonetary incentive.
IT managers should pay special attention to whether a job candidate is focused primarily on money.
“This is a big filter for us because at the end of the day, money isn’t what gets you out of bed,” Brown said. “Up to a certain point, money is a good answer early in your career, but what we’re looking for is for people who are internally motivated.”
Brown suggested that IT managers look for someone motivated by change who has a high degree of humility about his or her skills and is looking for the next challenge.
On the horizon: A more realistic market?
Ford K. Sayre, president and owner of Bay Search Group in Barrington, RI, said IT workers will be seeking higher-salaried jobs, and there will be fewer and fewer of those jobs from which to choose.
“It’s not the way it was during the dot-com days,” Sayre said. “Employees will start to trade money for a real job with a real company.”
As dot coms decline, their employees will return to the brick-and-mortar world and brick-and-mortar salaries.
Already, Sayre said his firm is seeing more companies choose to let the jobs go unfilled rather than pay inflated salaries. Eventually, companies will offer higher salaries because of the critical nature of the unfilled positions, Sayre said, but they are taking longer to get to the point where they are willing to bolster their salary offers.
This cycle is not new, Sayre said. There is usually a hot area in which IT people will be able to get very high salaries. As the needs are filled, the high-salary jobs begin to wane and eventually disappear, he said.
“I’ve seen this cycle several times in the 22 years I’ve been doing this,” Sayre said.
This employer-employee power shift will create an advantage for IT managers who have unfilled positions, according to Dr. Alec Levenson, acting director of Labor Markets and Human Capital Studies with the Milken Institute in Santa Monica, CA, and an economist at the University of Southern California.
“Jobs are literally going unfilled. Now, they might be able to get qualified people as opposed to getting mediocre people,” said Levenson.
Take these studies with a grain of salt before you make drastic changes to accommodate the findings, Levenson cautioned.
Any survey that shows that compensation doesn’t matter either talked to high-paid professionals or the clergy, said Levenson. During the e-commerce boom, surveys suggesting that flexible work hours or other benefits were more important than money painted an inaccurate picture, he contended.
“Now that people’s salaries are coming back down to earth, that’s the first thing they’re going to care about,” Levenson said.
What interview techniques and questions do you use to ensure applicants aren’t just after money? Share your tips with other TechRepublic members by posting below.