Beer, iPad, or Flexibility: Which Incentives Work?

photo: Fotolia

photo: Fotolia

Some IT companies will do anything to attract new hires, including footing the bill for a year of beer. We find out what it really takes to become a workplace of choice.

It’s the same story for tech companies everywhere, from the big guns in Silicon Valley to mini start-ups in the emerging markets: The supply of IT professionals in the workforce today simply doesn’t meet the demand. In a survey conducted with 38,000 companies in 41 countries, over one-third reported that they have been unable to find the workers they need. The top reason? A lack of hard skills such as IT knowledge.

For IT professionals, this isn’t necessarily a bad situation to be in. The current rate of unemployment for tech workers in the U.S. is around four percent; half of the overall jobless rate, according to the U.S. Bureau of Labor Statistics. If you’re an IT expert today, you’re a hot commodity.

But for tech companies, the outlook is a bit gloomier. The competition for skilled workers is high, and many businesses are looking for a way to stand out from their rivals. The answer put forth time and again is simple: become an “employer of choice.” Not only do these companies have an easier time hiring top candidates and keeping current employees, they also perform better.

Engaged employees improve the bottom line

Studies show that the most-engaged employees are significantly more productive and drive higher customer satisfaction than their less-engaged colleagues. In fact, a survey by McKinsey found that companies with excellent talent management achieved total shareholder returns that were 22 percentage points better than average.

So how does a company become an employer of choice? You might ask SAP. It recently made Computerworld’s 2012 list of the “Best Places to Work in IT” and was named a “Top Workplace” in the San Francisco Bay Area.

When you ask Geraldine McBride, president of SAP America, how SAP became an employer of choice, she gives an answer that sounds a little too easy: “Being a top workplace is all about having fun, doing meaningful work, and making our customers happy. This is why we’re an employer of choice for everyone from new college graduates to professionals from all industries.”

While most job seekers probably agree that “having fun” at work is a definite plus, it’s not actually one of the qualities they put at the top of their list. In contrast, numerous studies show that young professionals really are searching for “meaningful work.” According to Universum’s survey of over 10,000 young professionals, Generation Y is more likely than older workers to choose an employer that conveys a sense of purpose other than or in addition to making money.

Recruiting 101: Beer, bikes, bangs

Of course, not all young professionals are immune to the material world. Tales of recruiting techniques at start-ups in New York and San Francisco verge on the absurd. Year-long supplies of beer, free haircuts, bikes, and iPads: When it comes to attracting the best in the IT business, there’s no gimmick some desperate companies won’t try. And what many employees once thought of as perks are now considered standard: free meals, stock options, shuttle buses.

Find out how to retain staff on the next page.

But what happens when the gifts stop coming? Once these sought-after IT stars sign with a particular company, what will convince them to stay? A lifetime-supply of new bikes probably won’t do it. According to Steven Greenhouse, labor and workplace reporter for The New York Times, companies looking to retain staff should focus on offering flexible work hours, telecommuting options, financing for training and education, and career support.

Brigette McInnis-Day, vice president of Human Resources at SAP America, agrees: “We built an environment that provides employees the flexibility they need to be successful in both their professional and personal lives.” She goes on to emphasize SAP’s focus on diversity, respect for individuals, and support for personal career development. These values will serve SAP well in the coming years, as demand for skilled IT workers continues to grow.

1 million IT workers needed to fill job openings

It is estimated that by 2018, there will be around 1.4 million tech-related job openings in the U.S., but only 400,000 qualified graduates to fill them. In that kind of job market, IT professionals will have their pick of employers. History shows they’ll be more likely to choose a “top workplace” over any other. What do you think? What qualities convinced you to work for your current employer?

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