There are thousands of companies still running their human resource applications around the assumption that employees will remain employed with the company for life.

Companies and other organizations need to understand what’s called the concept of the employee life cycle. Basically, what the life cycle means is that years ago people worked at one company for 30 years, typically in only one or two positions. Now people in the job say, “I’m going to be at this company for X amount of time and then I want to go to the next place.”

What we’re finding at people3, a Gartner company and an IT human resources consulting firm, is the current life cycle of the IT professional is 48 months. I’ll do the math for you—that’s just four years! There are implications to this brief employment stint.

As an IT manager, this relatively short employment period affects your ability to do your job. IT leaders need to learn to extend the employee life cycle if they’re going to be more successful.

Retention of employees becomes key
One thing more valuable than recruiting new employees is keeping those you have. Your goal should be to increase that employee life cycle for two major reasons:

  • Retention will help with productivity and effectiveness of that person.
  • Retention will help you maximize your investment.

As an IT leader, you’re going to be more effective in your job and efficient with your financial management if you can get current employees to stay another six months or another 12 months, increasing your average life cycle.

Factors that encourage people to stay longer include:

  • Pay
  • Career development opportunities
  • The use of emerging technologies
  • Leadership that has vision and direction

Pay—it’s not what you think
Here’s an interesting thing on pay. At people3 we have an annual IT compensation study. With the 2000 study, one of the “ah-has” of the study was the fact that companies that pay the highest salaries have the highest turnover.

The reason? These companies try to solve everything with pay. Pay will get you in the game, but it won’t make you a winner. The other factors are the key. You don’t necessarily have to pay over market. You have to pay the market price, but you have to offer other incentives to keep people on board.

A lot of companies focus on things like training. Training’s good, but that’s not even one of the four top reasons why people stay. They focus on telecommuting and flexible work hours, things I call employee satisfiers.

Why should employees stay?
You have to do more than satisfy employees; you have to find a way to get to the core of why they should stay. IT leaders must understand the evolution of the workplace.

People want to work for leaders they have confidence in. People want to work where an organization has the latest and greatest technologies going on. People want to know what opportunities are available in the company and the criteria for those opportunities. You can describe the different management styles in terms of the business models where they are prevalent.

You have your brick-and-mortar companies that offer a 45-hour-a-week deal that has low risk and low payoff. Protocols are in place so people know what they have to do, know what their week looks like, and know they’re going to get their 3 percent raise every year no matter what their performance.

The other end of the spectrum is the dot-com company. In some of these jobs, employees get a 70-hour workweek and a fun culture of high risk, and, it is hoped, a high reward.

Best-in-class companies and IT leaders are creating the environment of a dot com in a brick-and-mortar shell. You’re always going to have your brick and mortar if you’re a very large company, but you can create a culture that simulates some of the dot-com benefits.

These benefits at the dot com include an environment that allows people to take chances and fail, encourages team-oriented work, and embraces fewer protocols.

People can experiment. People can fail. People can have ideas and not be afraid to push the envelope.

Linda Pittenger is president of people3, a Gartner Group affiliate that is a specialized human resource consulting firm that works exclusively with IT organizations.

What are you doing that seems to keep your employees happy enough to continue to work at your organization? Do you have a culture of fun in your shop? Start a discussion below or send us an e-mail