Winning Elements

By Alan Horowitz  |  Posted 06-01-2001 Print Email

Winning Elements

Sabre responded to the tight labor market by developing an integrated approach to retention between 1997 and 2000. According to Haefner, the four-point approach of Sabre's "Winning Elements" strategy—opportunity, reward, compensation and community—involved rewarding workers through total compensation and recognition, offering them work-life balance and providing them with a meaningful community of co-workers. Also critical: granting stock options to all employees, tying compensation to business performance, putting benefit information online and training managers. The result? IT staff turnover at Sabre has decreased dramatically—from 12 percent to 5.5 percent. And Sabre is not alone: Harrah's Entertainment Inc., another company that developed its own integrated HR strategy, slashed its turnover rate from 35 percent to 9 percent.

Still, CIOs are concluding that focusing on recruitment and retention alone isn't enough to battle the chronic shortages. Among CIOs who outsource their IT work, 64 percent cite a lack of internal staff or skills as the top reasons they've done so, according to a May 2001 CIO Insight study on outsourcing. Outsourcing is clearly a component now of many companies' IT human relations strategies. According to McKinsey's Roberson, CIOs need to weigh which skills needs should be met through full-time staff, and which through outsourcers or part-timers. What can be better done through outsourcing? "Be clear about what you're uniquely good at," Roberson advises.

Another question CIOs should consider is how long they want to keep their full-time staff. The obvious answer—as long as possible—isn't necessarily the right one, according to University of Dayton, Ohio, professor Tom Ferratt, co-author of Coping with Labor Scarcity in Information Technology: Strategies and Practices for Effective Recruitment and Retention. Retention strategies that encourage long employee tenures make little sense in companies that demand high achievement, high energy and high rates of change. The reason: Stress inevitably leads to high burnout rates. In addition, some IT jobs do not require in-depth business knowledge, and therefore don't benefit from many years of experience in a company. Encouraging long-term retention makes more sense for IT jobs that put a premium on industry and company knowledge, says Ferratt.

Whatever you do, be selective. Between 1998 and 2008, the five fastest-growing occupations will be in IT, according to the U.S. Bureau of Labor Statistics—but there will be fewer and fewer people to fill them. There has been a 4 percent drop in the 18- to 34-year-old population since 1990, and the Census Bureau predicts that supply of 35- to 44-year-olds will decline by 14 percent by 2015. The lesson? If you haven't taken a good hard look at your company's hiring and retention strategies lately, get moving. Your e-business initiatives could hang in the balance. Says human resources expert Walker: "HR strategy isn't about the people in the organization, it's about how the organization gets its strategy implemented through people."

Alan Horowitz, the author of The Unofficial Guide to Hiring and Firing People (Macmillan, 1999), has written about business, technology and human resource issues for 20 years. Comments on this article can be sent to


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