Autumn is here and the somewhat unpredictable weather is showing a marked similarity to the Auckland IT labour market.
Even though a record number of migrants entered New Zealand in the last year, numbers of available candidates are only just keeping up with the expanding IT needs.
Meanwhile, approximately 30% of respondents to a recent survey on IT salaries admitted to receiving a pay rise over the corresponding period while a further 30% expect to receive a pay rise soon. As confidence levels amongst employees increases – due mainly to an increase in advertised jobs – they are seeking pay increases across the board. This contrasts with recent years when most pay increases barely kept up with inflation. Results from another survey, conducted to assess the normal turnover of staff in IT companies or departments, suggested increases in “churn” up to 17% per annum. If you have a higher turn over than that, you may be well advised to investigate the reasons for it.
Do consider annual performance reviews to keep your employees in line with current market salaries. It’s quite surprising that we regularly interview candidates who haven’t had a performance review in over a year. Although the words ambulance and cliff spring to mind, do also consider conducting proper exit interviews during which each side should be encouraged to be as open and honest as they can. These interviews can be a valuable source of information to identify ways to improve how your team operates and to help address the reasons for churn.
The true cost of replacement in terms of up skilling new staff, the loss of knowledge when team members leave and the reduction in productivity as a result, is much higher than most employers might imagine. Even though companies have process and procedures manuals, they do not always document the soft knowledge obtained from working with clients and systems. Much of this soft knowledge helps keep clients loyal and happy while also helping to improve productivity. The operational cost of replacing departing staff is only a small proportion of the true cost of the loss to your business.
That’s why staff retention is so important.
MTR have been surveying candidates for many years and their interview answers to the question “why are you leaving your current role?” has shown that approximately 57% of the people say that they have “plateau’d” in their current role and now seek opportunities to learn more and to develop their abilities. We encourage employers to consider succession planning for all IT staff and to identify potential training courses to help develop their team technically or personally. Relevant training courses can be discussed at any time and need not wait for the annual performance reviews.