Do we want to play musical chairs?

As the demand for IT staff picks up, despite the recession and cutbacks, there is a risk that this increase in demand will be the cause of instability for many IT functions within enterprises. This is because the management and development of key talent within IT is seldom given the priority it deserves.

Many IT leaders are quite happy to rely on the market to deliver the necessary skills when needed, thinking: “If I need an enterprise architect badly enough, I’ll pay the going rate.” This short-term attitude can lead to systemic instabilities.

Take Ed. He is a talented software engineer and solution architect. In addition to doing a great job at work, he builds web sites at home that attract a lot of traffic. His bosses do not know he has this additional string to his bow, but see him as a good engineer who can sort out a web site’s problems and develop new functionality quickly and efficiently. Ed is the only one who knows how the customer interaction facilities work on the site, as he has worked on them for four years and built much of the code.

Ed is quite content with his job. However, he attends a university reunion and a friend tells him how well she is doing, and that her company has put her on a talent development programme where additional provisions are made to educate and train her. These are supported and partly funded by her employer.

On the other hand, Ed has struggled to get his firm to fund much-needed technical courses. Appraisals are just about performance, and only lip service is paid to career development.

So what happens when Ed finds a company that is desperately seeking a new software team leader? That’s right: he is offered a job with a 15 per cent higher salary. When he submits his resignation, his bosses offer to beat his new salary, but it is too late. He is gone within a month.

Now look at the impact on the old employer. Since no one knows the code as well as Ed, problems take much more time to resolve. Until someone can be recruited to do Ed’s job, all development in the customer area has to be suspended. Just to back-fill the resources, the company has to hire a contractor to cover for Ed’s absence, incurring more costs.

Because the company is desperate, it advertises Ed’s job at a 20 per cent higher salary. Eventually, after three months they hire Joe, who has less experience than Ed. It takes Joe two months to get to know the system so the company has to employ a contractor for that period. New developments are also delayed by five months, plus it has to incur Joe’s recruitment costs.

With demand for senior and skilled IT staff increasing, unless the supply of such staff increases correspondingly, we will have musical chairs – an environment in which experienced professionals just circulate, bidding up salary levels, with the main beneficiaries being recruitment agencies.

Retaining key staff and developing talent is critical to good strategy execution. Getting staff to undertake long-term academic training, such as a Masters degree, generally locks them in for the two and a half years of the course. It also demonstrates to the person that the organisation will invest in him or her, and sends a signal to other staff that ability and talent will be recognised. Establishing such a talent development focus within the technical community minimises the loss of key staff and helps retention and morale.

So, as the market picks up, IT leaders should assign a higher priority to their talent management programmes. It is not only the right thing to do, it also makes sense commercially.

David Chan is director of the Centre for Information Leadership at City University London