6 STEPS to Optimizing IT STAFF - Industry Trend or Event

Keeping IT employee skills current requires a commitment to ongoing training, development of a profiles database, and the involvement of employees and HR.

HUMAN CAPITAL MANAGEMENT issues continue to dominate IT managers' concerns, with the IT labor shortage rapidly worsening and skill levels across a wide range of domains in impossibly short supply. META Group, Stamford, Conn., estimates that nearly one million positions in IT will remain unfilled by the end of 2000.

At the same time, those individuals with the requisite hot skills, such as networking, Web development, customer relationship management, and project management, are benefiting from the skills shortage by demanding and receiving a wide array of cash incentives (sign-on bonuses, hot skill bonuses), and other perks as retention incentives--cars for employees, and in some cases cars for spouses, dry cleaning services, meal vouchers, etc. And yet, current survey data from the META Group IT Staffing and Compensation Guide indicates average IT turnover across the U.S. continues to be high, ranging from about 11% to 13% across all types and sizes of organizations. Thus, it is small surprise that after several successive years of declines in training and reskilling efforts, U.S. organizations are finally realizing that optimizing the workforce is essential for competitive survival in the Internet age.

Efforts aimed at reskilling staff must take into account:

* That reskilling, and training in general, is inherently a long-term initiative; companies must be willing to give it time to bear fruit.

* Centralizing training efforts into a single locus, and operating training in much the same way that a program management office is run for managing the application implementation process, will generate greater efficiencies and enable better tracking of costs and success.

* Training efforts are 50% more successful when employees are involved in determining key aspects of the program.

Development of broad-based skills, including business skills, requires greater flexibility from management personnel, and targeted programs aimed specifically at building these skills. Many firms confine IT training to development of technical skills. However, new positions in IT (such as Web content development, CRM, ERP, and project management) often require specific skills targeted in other areas, such as business management, finance, and marketing and communications. Currently, though, companies do not include these areas as mandated for IT professionals.

Many plans exist for reskilling IT employees, but paramount for any initiative is to keep in mind that training and development must be part of a multilevel retention strategy.

Training serves several purposes, not the least of which is that it supports employee retention efforts. Historically, U.S. firms have regarded training (and learning) as the private domain of the employee, rather than as critical to competitive success. But this is changing, not least because of the high cost of replacing a single individual (1.5 to 2x an individual's base salary, in direct costs alone), versus increasing investment in existing employees. And, indeed, META Group research indicates that the ability to maintain skills at the "hot" level is cited as the first element employees mention when asked why they remain with a particular firm, or the reason they would most likely take a new position.

A Multistep Process

Our research indicates that organizations that focus on developing skills using a multistep resource development process will benefit on several levels:

* The organization maintains discrete skills at acceptable levels, enhancing performance and meeting targets.

* It is possible to do succession planning across critical skill areas (say, for a key project manager who leads a large-scale implementation project).

* Enables clearer understanding, through the gap analysis phase, of missing skills, and provides a framework for creating pathways and determining courses to attain them.

* Provides an employee-empowerment zone; employees maintain and update their personal skill base as appropriate or as they are motivated to do so.

* Employee appraisals are easier to accomplish, since information is tracked and dates and deadlines are more readily available to the supervisor.

* Better reuse of available skills within the organization.

Fundamentally, a resource development program consists of:

* Portfolio/profile creation

* Skill assessment

* Skill improvement and gap analysis

* Career planning

* Succession planning

* Tracking IT experience

Each step should be treated as an integral part of the whole, but assigned distinct development time.

Creating Profiles This first step often creates widespread employee anxiety. They may ask, "Why is my profile necessary? Is this part of a restructuring or downsizing effort?" Therefore, outlining the benefits to portfolio creation, the overarching project goals, and the importance and ultimate uses for profiles within the organization will help keep the process on track, and reduce anxiety and distrust. Lots of communication is essential for this to work, and an organization that wants to be successful will establish a change management team and offer many opportunities for employees to obtain information and clarification about the process.

Step 1

This step is hugely important, since it is through an understanding of the available skill sets that appropriate training and development efforts will be established. If employees understand that it is through their portfolio of skills that they will realize advancement, they will be more likely to be interested in participating in this process. In addition to providing a database of information about the IT workforce, regular involvement in updating a skill profile reinforces the continuous nature of skill acquisition. It also offers a one-stop view of current skills and competencies, projects in progress, and organizational or team gaps in required skills. The profile should indicate discrete skills (e.g., software experience, certifications) and other technical expertise, as well as additional competencies, such as leadership instances, business knowledge, and any other relevant information (hot skills, special capabilities).

The actual process of developing profiles starts with the employee, so employee involvement is key. Employees indicate their current responsibilities, and offer relevant information about previously held roles.

Key Elements in Profile Creation

* Separate from performance management process and annual review (assessment, not judgment)

* Provided by each staff member (generally exempt-level employees)

* Current roles outlined

* Includes history of projects completed

* Job description can be a starting point

* Includes review with current manager

* Input from manager

* Highlight technical skills, other competencies (e.g., leadership, motivation)

This should be done independently of a standard performance review. The goal is information concerning skill sets, not judgment about performance.

Once the basic profile exists, the line manager reviews the information (preferably with the employee) and has the opportunity to male additions or comments. This will be a shared document--once the manager or immediate supervisor has contributed information, a second review, by employee and manager, should be used to clarify and further refine the information. After being entered into the IT workforce database, it may be used as a sourcing document, providing information to others in the organization that could result in a new assignment for the employee. It also may form the basis for a succession plan. It must be thoughtfully executed, to enable maximum benefit to both the organization and the employee.

A key usage aspect of the profile will be to keep a skills and career development plan on track for the employee. It forms the basis for the second step of the process, skill assessment.

Skill Assessment This stage of the process should evaluate skills quantitatively--if possible using direct testing of technical skills--as well as qualitatively. It is a less straightforward process, however, than profile creation. Currently there are few tools available for broad-based technical skills assessment. Most often, an assessment tool is provided by a consultant or company that is working with the client organization as part of a training and development effort, thus quality levels are uneven. Indeed, good off-the-shelf assessment products are virtually non-existent for the vast majority of software and technical products, putting the problem of assessment squarely in the lap of the organization attempting to understand its employees' skill sets.

STEP 2

Where possible, companies can use tests for discrete technical abilities that they develop themselves. However, in many cases qualitative assessment will be the primary method used. Generally, qualitative skill review will be provided from the employee's manager or project manager and colleagues (e.g., project team members). Some pieces of skill assessment can be obtained from a 360-degree review, or a combination of peer and managerial review.

Skill Improvement Once assessment is complete, the next step is outlining the specific areas that need improvement. This should focus on two different areas:

STEP 3

* Skills observed, with an indication of skill level (e.g., basic, intermediate, advanced).

* Skills to be developed (e.g., skills required for advancement, such as specific platform skills for a Web developer).

This stage also includes establishing the training activities that will be included to address skill improvement (see table, p. 44). These should be clearly and unambiguously articulated. Where possible, such activities should be linked to current or planned job responsibilities (e.g., Employee X will require a course on n-tiered architectures to progress into a new role within the SAP implementation project).

Career Planning Based on the metrics and data from the initial steps in this process, the employee and his/her manager, can develop a distinct career plan. The career plan should set out the overall direction the employee intends to take within the organization, but with enough latitude for a possible change of direction, ultimately getting the employee to the desired goal. The career plan should include a detailed description of training necessary for addressing gaps identified and adding new skill areas in anticipation of a job change. This can be a recommendation for a course currently offered by the organization (whether internally or externally), or a course that the employee will need to take before moving into a new position.

STEP 4

A time line should also be set at this point, to enable a concrete schedule for achieving specific career goals. It should also be possible in career planning for an employee to update skill sets, which will most easily be provided through a self-service component (e.g., intranet access or extranet access). This enables employees to add elements to their profile as they acquire skills or develop new competencies. Keeping information updated is an essential, though labor intensive, part of a resource development process. This step must be incorporated--indeed, scheduled--so that changes are entered regularly, or the whole process loses value.

The human resources organization should be part of the career planning (and indeed, each) phase. Whoever is designated as process manager--dedicated HRIT individual, or someone directly appointed from within IT--HR should have the same view of individuals and their skills that IT has, and must be aware of career aspirations and objectives.

STEP 5

Succession Planning Succession planning is no longer merely for senior business managers at the vice president level and up. The scope and cost of many IT projects (ERP implementations, large-scale changes in networking, etc.) require IT to have a fool-proof fall-back position in the event of the untimely departure, for whatever the reason, of key IT staff. A departing senior project manager can leave an enterprise in a distinctly vulnerable position. Subordinates may not be sufficiently broad-based in their skills to step into the top position, or the skill sets required (as in SAP) may be difficult to locate under time pressure. Deadlines, and ultimately, profitability/competitiveness may be put at risk.

Through the information compiled in a resource development program, both the HR organization and IT will have a better sense of who is available to tap for such cases. This step identifies individuals with key responsibilities (ideally for all projects ongoing and for core competencies), and enables successors to be rapidly identified in the event of changes. A succession plan can be mapped and entered into the database used for sharing information. Again, FIR needs to be in the loop for this portion of the process.

STEP 6

Tracking IT Experience The preceding steps in the resource development process will be of limited value if the information compiled is not updated and maintained in a joint IT/FIR database. Nonconfidential aspects of the information should be made available to employees throughout the organization, a kind of "who's who" (and what they do) for employees about employees. Some aspects of the database can be passcoded to ensure confidentiality (e.g., information on bonus eligibility, or other highly personal information). Ultimately, when this process has been completed, better sourcing is possible for projects.

In many organizations across the industry and revenue spectrum, some of the individual steps are already in place, such as profile development, or skill assessment. We believe that where such pieces of this process already exist they should be reevaluated for currency and relevance. A major focus of this type of initiative must be to integrate processes; no one component will achieve the type of resource use/reuse necessary for the flexible, adaptable IT organization required. As new products come onto the market, they can be integrated into the process. An integrated process is key to a long-term, effective program that builds/develops and uses resources. A process approach also serves as a map for building and developing skills that will be required for the future.

Maria Schafer is program director, Executive Services, for META Group Inc., Stamford, Conn. Schafer has researched IT human capital management, staffing, and compensation strategies for nearly 20 years. She has extensive experience in IT recruitment and human resources management at a number of companies, including International Thomson Publishing, NYNEX, and CBS Publishing.

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