Keep IT Happy

When it comes to top talent, finders aren’t always keepers. A report by Cap Gemini Ernst & Young titled “Retail I.T. 2000” gauges how much priority companies give to retaining information technology employees. As IT becomes more vital to strategic planning, retention gains the spotlight. In 1999, 64% of respondents to the survey named IT employee retention a priority, and in 2000, respondents continued to view it as a major concern.

In the current market for top IT professionals, the report notes, retailers are not only competing with other merchants for IT talent, they are competing with various other industries. Therefore, it is imperative that companies go above and beyond the call of duty to keep valuable technical staff from being lured away.

Nevertheless, because of the slowing economy, employees are more likely to stay put than they were during the height of the dot-com craze, says Cap Gemini Ernst & Young vice president Tom Hogenkamp. “IT retention is getting easier because of the problems with the dot-coms. With their business not going as well and the way the economy is going right now, I think there are not as many people out there looking to make a change. And not as many people are looking to go for a quick buck because they don’t know if they’re going to be able to get their old job back or something similar if something goes wrong.”

Generally, IT turnover doesn’t result from job offers from retail competitors; in fact, 57% of respondents say that IT staffers who leave rarely go to another retailer. A clear majority of outgoing IT employees say they go to work in entirely different fields. Dot-coms may beckon, but 74% of outgoing IT staff say they don’t defect to online companies, and 64% say they don’t join consulting firms, despite the lure of high salaries.

Another noteworthy finding is that retailers manage to retain 75% of their IT employees, a far higher figure than the overall retail employee retention rate. Supermarkets lead the retail sector with an IT staff retention rate of 91%, followed by specialty home improvement outfits with 86% and apparel and accessory merchants with 73%. Across retail channels, companies with less than $500 million in annual sales are the most successful in keeping qualified IT staff. This could be because technical employees in smaller companies are more visible and influential, can see the impact of their work more easily, and receive more recognition for their contributions.

Climbing retention rates do reflect the way IT employees are rewarded, according to the report. Forty-five percent of survey respondents say they “nearly always” or “very frequently” offer flexible work schedules to their information technology staff, although an overwhelming majority, 98%, say they provide flexible schedules “occasionally.” This statistic has jumped substantially over the 53% who indicated offering this kind of flexibility in 1999’s survey. The trend toward cozier IT working conditions is most prevalent in larger firms.

Bounty hunters

Training and educational programs are also common. Among the retailers surveyed, 86% report implementing such programs.

The most obvious tool in stemming the tide of IT employee turnover is monetary reward, and 89% of respondents say they revise compensation, according to the IT report. Nevertheless, only 24% of companies surveyed use the money tactic “nearly always,” or “very frequently.” Retail chains, for one reason or another, prefer using methods other than huge financial incentives to keep their top IT people in the fold.

When retailers run into staffing deficits, 80% of those surveyed outsource IT functions. Sixty-nine percent get outside help for Internet services; 68% outsource IT training and development; 46% farm out new application development; and 33% use external contractors for application maintenance.

For more information, visit Cap Gemini Ernst & Young at or call 216) 583-2192.

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