At the turn of this century, at the height of the tech boom, the 'war for talent' was so great that to gain precious IT staff, employers resorted to many gimmicks. At one Auckland firm, IT staff had scooters to ride on (during office hours), they could 'box' in oversized gloves and rest in large comfy sofas. Fridges packed with beer became common at many organisations, along with casual Fridays and flexible hours, with rising salaries, particularly for contractors.
In the 'tech wreck' of 2001 to 2003 that followed; the toys were put away. IT staff were booted out, and for the lucky survivors, pay rates plateaued.
Now, the good times are back, IT projects are on again, work is plentiful and the skill shortages have returned. Project management skills are cited as particularly scarce and contracting is in vogue again.
Other "hot" skills include Java, .Net, technical architecture, business analyst, security, integration/middleware, BI tools, plus some web-based and e-commerce related skills.
Gartner Asia-Pacific vice-president Bob Hayward says CIOs, having a newfound emphasis on growth and innovation rather than cost-cutting, find the "search for talent" is one of their top issues of 2005.
Recently, Computerworld Australia reported major federal government projects are facing escalating costs because IT skills shortages prevent staff recruitment or force up their price.
Hayward tells MIS the same situation applies in New Zealand, perhaps more so as Kiwis typically cross the Tasman for higher wages. He blames the current skills shortage on several years of downturn not attracting many new people into the IT industry. There are also demographic factors.
"Many senior people that entered industry in the 1970s to 1980s are leaving (either retiring or burnt-out and now own vineyards or B&Bs or restaurants) and there are not enough immigrants to fill the gap - especially now that spending on ICT has started to rise again and demand increases."
Jim O'Neil, executive director of the Information Technology Association of New Zealand (ITANZ), agrees local projects are already being delayed. He says this situation will worsen when further government projects take up what little IT staff is available.
"The ICT industry is globally picking up from the very low of 2001 to 2003, and over those three to four years, organisations did not invest. They put things on the back burner and now they have a backlog of work."
"We are suffering much from the past three to five year downturn as fewer people came out of IT courses from the polytechnics as people were getting sacked. The downturn was the first many in IT had experienced. They thought the bubble had burst and they thought they had to start from scratch - elsewhere," he says.
"There are ripples from the US and UK and when it gets to New Zealand, we struggle even more, being a low wage economy as people are rightly tempted to sell their skills on the global market," explains O'Neill.
ITANZ used to work closely with the Immigration Department on IT immigrant issues but following a new skills-based policy last year, the association now helps the Positively Wellington campaign to bring immigrants to the capital.
Shawn Gilhooley, manager, migrant attraction for Positively Wellington, left Silicon Valley 15 years ago for the Kiwi lifestyle, a sentiment echoed by many other Britons and Americans in IT who have moved here.
Positively Wellington attends UK recruitment fairs with Kiwi employment agencies. Last year, the fairs brought a "huge influx" from the UK, but now Americans want to live here because they are "unhappy with US politics".
However, while the British know about New Zealand, its lifestyle and lower wages, the Americans "need to do more homework to avoid disappointment".
Either way, Gilhooley hopes her role helps ease the local situation.
A global concern
Globally, however, Forrester Research reports IT budgets will rise 7 per cent in 2005 as organisations work on project backlogs that accumulated during the past three years.
Gartner also warns of future IT workforce shortages, fuelled by growing demand for IT workers and an "incredibly shrinking workforce" from an ageing population.
Both Gartner and Forrester call on employers to prepare for this.
Gartner advises employers to fix a strategic direction for their organisations, setting out their mission and objectives to ultimately determine current and future human capital objectives.
They should conduct a workforce analysis and look at their skills, gaps in skills and address issues through recruitment, reward and development. Employers should look at training, succession planning and related HR issues; taking a longer term view of up to 10 years, to avoid the overstaffing and layoff issues of recent years.
Similarly, Forrester calls on employers to assess current skill levels and demand, identify gaps, and develop a resource plan to close the gaps.
Closer to home, Gartner's Hayward says beer and pool might work, but the best methods concern "personal interaction, good management, making sure people are engaged, happy and challenged".
While the overseas analysts say pay rates will eventually increase, New Zealand IT recruiters and executives say money is not the only solution.
Robert Walters managing director Richard Manthel says employers must consider future career paths, offer personal development programs and mentoring.
"We are dealing with a generation that wants to get from A-to-B ASAP. The younger generation has different motivation to the baby boomers and companies need to understand this," he says.
Sally Breed, director of Auckland-based IT@Work, says a key factor in recruitment is company culture.
"Everyone wants to work in a fun, dynamic company where people are really motivated and team players and investment in people are high priorities," says Breed.
"They also look for a career path. Career succession is important. New Zealand organisations tend to have a fairly flat structure and in some instances employees do have to leave to progress their careers.
"Flexible hours are a big plus for many people especially with the traffic challenges. Working remotely is also becoming very popular," she adds.
Hudson Recruitment IT&T national practice manager Ben Pearson pleads for flexibility in hiring, such as taking on mature staff and immigrants, whose first language is not English.
"That (also) includes taking people with a slightly different technology background but have the right attitude. You can train them," he says.
"We often see good people who don't perfectly match the job description and get declined, but are snapped up elsewhere and add value over the longer term," adds Pearson.
Robert Walters reports some employers are showing such flexibility where the candidates show the right attitude.
"Employers know they can train skills but not attitude," adds Manthel.
The law of supply and demand
But sometimes it is about money. John Keesing, managing associate of Executive Taskforce, says employers should abandon traditional notions of 'permanent' staff and consider contracting.
Skills matter more than job titles, with Keesing claiming there is no skills shortage, it is just the way they are distributed. Skills can be found in the unlikeliest places, he points out.
Recalling the 'pay peanuts get monkeys' saying, Keesing adds firms doing this may now be left with no one. Poor pay makes employers unattractive, he says. It fuels job-hopping and increases costs in HR, training and recruitment expenses.
And while employers may be loath to pay fees to attract people, they might have to.
Keesing demands employers dump the cost-cutting mentality of 15 years ago, address the reality of a talent shortage, realise New Zealand wages are internationally uncompetitive and accept people will take the highest paid job offer.
Consequently, companies need to rethink their remunenation strategies, respond to the basic laws of supply and demand and pay more.
Sally Breed, however, sees upping pay for newcomers as problematic, as everyone else will demand a pay rise. Breed says offering superannuation can help with retention, but IT staff tend to move around.
Signing-on bonuses, common in the US, but new to New Zealand, though won't upset the salary apple cart. Retention packages and paying people a bonus after an agreed period in the company, also help, along with performance-based bonuses.
"Whatever the strategy, it requires a holistic approach to attracting the right people and creating loyalty and commitment in building high-performance teams," says Breed.
In the actual IT workplace, IT executives MIS spoke to are addressing staff retention and recruitment issues, even if they are not throwing money at the problem.
Tony Lester, chief information officer at Land Information New Zealand, says the IT jobs market is at its most active since before Y2K, with the government seeking at least three CIOs and LINZ about to increase its IT department staff from 59 to 66 this year. Government agencies cannot always compete with external agencies, he says, but it is not always about cash, but rather offering challenging work, staff development and training.
"Perhaps government is a bit more positive when it comes to the overall development of the individual and so training and personal development are high on my list of activities for staff.
"I am (also) attempting to adopt an inclusive approach as much as possible to how I would like to see my team culture grow. Individual and team relationships are still the key," says Lester.
Wellington-based Public Trust is also increasing IT staffing for infrastructure projects this year. It is not reporting any skills shortage problems, yet. Some employees have been with the organisation for almost 40 years thanks to "an interesting variety of work for staff and keeping up with changes in technology".
"Retaining staff is about providing staff with appropriate challenges for their levels of skill, not setting them up to fail, and showing loyalty to staff through both profitable and non-profitable periods in a company's life," says Public Trust IS manager Cathy Budd.
Auckland City Council faces difficulties in getting good people in highly technical areas, with CIO Ian Rae reporting shortages of business analyst and consultants in particular.
Rae believes providing interesting and challenging work is important, plus a "great workplace and appropriate social environment".
"We have always had a strong focus on offering development opportunities and investment in training," he says.
Fonterra claims few problems in replacing staff, other than a quickening staff turnover forcing the company to speed-up recruitment processes for lower-end roles. The company is also looking at employment branding, employee engagement, recruitment processes, remuneration and benefits, plus orientation and graduate recruitment.
"In some more senior roles the shortage is evident by the simple lack of quality resources applying or available for a specific role. In some cases, it has taken six months to fill roles in senior technical and specialist fields," says HR manager for Fonterra information systems Russell Malone.
Malone adds his own personal view of the problem. "Organisations and government have not invested enough in work training programs over the last couple of decades. The buoyancy of the economy and global mobility are driving demand for resources that exceed supply.
Targeted immigration programs are an important part of the IS industry in New Zealand and Australia but they don't really address the underlying problems of employers wanting people that are ready to 'plug and play'."
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