Posted on 26/10/2017 by Peter Sanders
Despite global economic uncertainty, the IT sector continues to thrive. But as demand outstrips supply for skilled workers and employee loyalty continues to drop, attracting, managing and retaining the best talent becomes increasingly difficult for employers.
Recruiting skilled IT workers is an expensive business. Acquiring top specialists - and keeping them - is a constant battle. Finding ways to maximise recruitment resources and convince your best employees to stay is crucial to maintaining an effective IT workforce.
So how much does recruitment really cost, and how can this be minimised? And what can IT employers do to retain skilled workers?
The true cost of recruitment
Most recruitment professionals consider agency fees, advertising costs, and the salaries of the in-house recruitment team when it comes to calculating the cost to hire. But, in reality, these headline numbers are only the tip of the iceberg.
Consider time-to-hire costs. Typically, it takes 10-12 weeks (or longer, if using an in-house recruitment team only) to complete the hiring process, during which time the position is vacant. For this period, the work is either neglected or diverted to someone else, usually by stretching another employee’s time or by hiring a contractor. Both of these scenarios have clear associated costs that can run into the tens of thousands.
Add to this the time it takes for managers to create job profiles, review CVs and conduct interviews. For a typical hire, this can come in at over £10,000. When the new hire joins, they have to be trained by other staff – driving up costs further.
Additionally, without using a recruitment partner who has a comprehensive job-seeker database and a close relationship with candidates, companies only have access to around 2-3% of the available talent pool to fill a job vacancy. This has a significant impact on the final quality of the hire, which inevitably has a tangible impact on productivity down the line.
Finally, consider the cost of attrition. During a typical recruitment process, candidates only begin to get a feel for the culture of a company after they have started in their position. As a result, on average 20% of new hires leave within the first 12 months, kickstarting the recruitment process - and its associated costs - all over again.
When these factors are considered as a whole, we see recruitment costs underestimated by 90-95% by most companies, with a typical cost to hire up to twice the anticipated yearly salary of the role.
It’s clear that minimising recruitment costs is important, so how can companies achieve this? The first step is to get the right people through the door - something that we at identifi are well placed to help with. But once the hiring process is complete, retaining your talent is critical to avoid high levels of staff turnover and, consequently, soaring recruitment costs.
What can employers do to retain IT specialists?
The needs of IT candidates are shifting: the skills shortage means they can afford to demand higher salaries, and the demographics of this workforce are changing. Gaining their loyalty requires a comprehensive understanding of their needs and a plan to address them.
Gallup reports that employee engagement is in decline across the UK, in line with weak productivity growth: the most recent data shows that just 8% of workers are engaged. Part of the problem, they suggest, is that talent for effectively managing people is not sufficiently valued in the UK, leading to employees being placed in ‘accidental management’ positions without the skills they require to fulfil the role. To rectify this issue, businesses must focus on upskilling managers to become effective people leaders.
In addition to addressing shortcomings in management, it’s crucial to recognise that IT specialists are getting younger: whilst the largest segment is now the 35-44 bracket, the number aged 18-24 is rising. These ‘millennial’ workers will play a critical role in the future of business, so what do they want from an employer?
In a nutshell: flexibility, security, and fairness, according to Deloitte’s International 2017 Millennial Report. They want to work in a collaborative environment rather than one that directly links accountability to seniority. They prefer full-time work, but seek a high degree of flexibility in working arrangements and want to be trusted by their superiors, seeing digital technology as having killed the need for presenteeism. They want to feel they are making a difference by being involved in good-cause initiatives.
For IT workers specifically, fair pay, work that is challenging and access to growth opportunities are of the greatest importance, according to Computerworld’s 2017 Best Places to Work in IT Report. Organisations that place an emphasis on compensation, training and technology have the highest employee engagement and retention rates.
Whilst it’s becoming increasingly difficult to recruit and retain the best talent in IT, there are steps employers can take to get things right throughout the employee lifecycle. Investing in quality recruitment tools is a crucial first step, but keeping candidates in the business once they’ve stepped through the door is the biggest battleground. Those companies who reward their staff fairly and align their culture to the needs of a new generation of IT specialists will win the loyalty of the top talent.
identifi global is committed to offering top quality IT recruitment across the UK and Europe. Contact us now to discuss your IT, cyber security and digital needs.