Wednesday, March 21, 2007

Getting to the root of the retention problem in IT

Why is retention such a problem in IT? Those of us who just watch it from outside trying to make sense of the glitter and the gold would really like to know. As a CIO, admittedly plagued by the phenomenon of retention, writes anonymously in a post today:

I am responsible for IT operations in the "happening region" of Asia which has shown exponential growth rate in the last few years....As someone with IT technical background, I have to admit that we often see things either as one or zero, black or white. But I have realized one important component of IT which is "heartware" or people, in addition to hardware and software.
He mentions the five criteria for retention identified by Development Dimensions International (DDI): leadership, meaningful work, organization, people and development. He then goes on to assess himself "humbly" along these criteria, but does offer any more meaningful insights as to the retention problem.

My own hunch is that the main culprit is the second one in the list above, namely, the lack of meaningful work. I would even venture to say that, barring the obsession in the eighties about Japanese productivity, our corporate gurus have paid inadequate attention to the link between retention, productivity and meaning of work. The current obsession lies with cost-cutting and deal-making, (oh and I forgot - carving a socially conscious image) as opposed to innovation at the shop floor. This is a peculiar contradiction that charactizes the IT sector. On the one hand, the industry is driven by innovation; on the other, the profit strategies of large IT corporations remain tied to the under-utilization of a large pool of skilled labour force who must perform routine tasks that is hardly meaningful to them.

Of course, these are simply my observations from the outside. I would love to hear from you..

BTW, our CIO ends in a rather philosphical tone
: Whatever meaning people find in their relationships, work, in their own unique experience of living -- that is real. Everything else is an illusion.


sp said...

Experienced engineers (7-10 yrs)in areas like VLSI are still difficult to find. Typically you get better responsibilities in India vs. US. But on the salary front, these MNCs seem to take tips by survey companies, whose suggestions are not realistic.

An engineer wanting to move, wouldn't want to sacrifice on the lifestyle, given that MNCs make more profits after outsourcing, saving on costs and still selling end-product at original prices. Best way to determine equivalent pay is to compare income and expenses in US vs India. Ultimately he should net the same income monthly. Everything is not cheaper. e.g. electronics, appliances, cars are costlier than in US, thanks to the duties levied.

After comparison, for 7-10 yrs experienced guy, 50% of pre-outsourcing US salary (benefits et al) achieves the same monthly net income in India. MNCs offer 1/3 of that. Naturally, attrition will happen till equilibrium is reached, as competitors offer more. After income requirements are satisfied, other things like job-satisfaction and responsibility will make a difference.

Interestingly, someone coming from their US branch gets close to his US salary. Of course, there will no attrition in such cases.

In VLSI, if the chip doesn't work, the huge investments cause huge losses if market window is lost. Many times these would be mistakes which could have been foreseen and avoided, if they had only invested in a better engineer. Penny-wise, pound-foolish bureaucracies !

ishani said...

The great Indian talent search is definitely the next big thing for the IT industry and getting bigger every day. If HR costs are as big in India as Western countries - where is the value add going to come from? The issue of cutting edge training becomes of critical importance - which is a long term solution and I'm not sure is being addressed by the government or IT industry seriously at all. In any case, most IT honchos I've spoken to lately are talking about the talent and skills crunch that they're facing in India!!!!