HR in the IT sector: a special focus

Innovation goes with the territory for HR professionals working in IT, particularly now the recession has switched their focus from rapid recruitment to employee engagement and retention schemes. Guy Sheppard reports, in the first of a series of sector focuses.

After nearly two years of job cuts, prospects are looking up for the IT sector. The latest quarterly survey from Salary Services showed the first rise in permanent vacancies since January 2008. Meanwhile, research commissioned by Microsoft predicts new business start-ups in the UK will create nearly 80,000 jobs over the next four years. The research says most will be highly skilled and that spending on IT is expected to far exceed growth in national GDP.

For HR professionals, this expansion will enhance the appeal of working in IT, particularly for young people at the start of an HR career. Those already in the sector insist there are other attractions as well, including skills learned on the job that have widespread applications elsewhere.

Virginia Frazer, HR vice-president for business software solutions provider Epicor, explains: “Every quarter in IT is like a year in some industries I have worked in. In IT, you are able to move so much quicker.” She adds that this is partly a response to the sector’s constantly evolving product range, saying: “People in the sector are very creative. We don’t stand still. You either thrive or don’t stay.”

She describes the career benefits as immense, particularly in a company the size of Epicor, which employs 3,000 people globally. “You are more empowered to make decisions and are given a lot more responsibility at an earlier stage in your career. If you are really capable of thinking creatively and outside the box, you will do well.”

But she questions whether the transferable skills gained at Epicor would have been as great if she had worked for a bigger organisation, where her role would probably have been more narrowly defined.

Barry Hoffman, HR director at IT infrastructure management company Computacenter, agrees that the sector is incredibly fast-paced.

He adds: “It also encompasses a wide variety of activity. I think the combination of HR and IT is quite powerful. It’s the same as when you get a really good HR person who understands finance. It works really well. Combining another discipline with HR, you can really unlock something.”

HR has had to cope with several challenges as a result of the recession, including adjusting from rapid employment expansion to retaining existing staff with initiatives that build on engagement and motivation.

Frazer believes the impact of the recession will be permanent, and says: “It’s probably reminded everybody that you need to keep slim, trim and fit for business.” The size of Epicor’s HR team has contracted slightly, and responsibilities for the US and the rest of the world have been merged.

Hoffman says his HR function is having to think “incredibly carefully” about every activity. That means questioning each meeting to ensure it cannot be dismissed as frivolous. If considering a cycle-to-work scheme, for example, he says a judgement would have to be made about whether the investment involved could be better used for a pay review or saving jobs. He adds: “You have to be careful what you do for the business and make sure it is really well thought through.”

He says the recession has still been an incredibly busy time for HR as a result of dealing with TUPE (Transfer of Undertakings (Protection of Employment) regulations. This is because companies have increasingly outsourced IT work to companies such as Computacenter to save costs. Despite this, the size of his 44-strong HR team is unchanged, but it has, he says, had to run 10 times faster to keep still.

Several IT companies have made substantial redundancies, including business software group Sage, which announced 200 voluntary redundancies across its 2,000-strong UK workforce in May. Tina Welch, Sage’s head of recruitment, says: “We’re making sure we make the most of the people we’ve got at the moment.”

Engineering software company Aveva announced a 10% cut in its workforce a month before Sage’s redundancies. Hilary Wright, head of group HR, expects future growth of the 300-strong workforce to be less than 5% a year. “We’re expecting a slower growth curve. We’re doing a lot of things to improve and enhance retention in such a difficult time.” Before the recession, the emphasis was much more on developing innovative recruitment techniques to cope with an anticipated 15-20% annual expansion of the workforce.

Recruitment this year is specifically linked to new product areas. But the company will still take on eight graduates, in the belief that they bring fresh talent and provide potential leaders for the future. This figure matches Aveva’s graduate recruitment before the recession. “I think this is absolutely key to our overall growth strategy,” says Wright, who adds that the quality of candidates for graduate recruitment appears to have improved as other companies cut back on similar programmes.

For global IT networking provider Cisco, the role of HR has also changed considerably over the past three years. “Prior to the recession, we were growing at a phenomenal rate and embarking on a major cultural change programme to anticipate that growth,” explains Charlie Johnston, UK and Ireland HR director.

Since the recession, the emphasis has been on reassuring staff about their future with the company. He says: “We would set some targets for staff about some of the cost reductions we needed to make – if we could make a number of discretionary reductions, we could avoid any broad-scale lay-offs.”

But HR has had a much more lasting impact through its involvement with cultural change than through cost cutting. “We are more focused on engagement with business leaders and really supporting them to change the culture of the organisation,” says Johnston. As a result, more traditional HR activities have been transferred to line managers.

This change programme has meant working with Cisco’s leadership to counter uncertainty caused by the recession and to help the organisation adjust to new ways of working. “If leaders are not open to working in different ways and engaging with their staff in a different way, then the technology will fail,” says Johnston. “It’s been more challenging for HR but we have stepped up to it. More and more I am being asked to go and talk to customers about our own experience. It really excites me.”

Like others holding similar HR positions, Johnston believes that IT is acting as a trailblazer for business generally and, as a result, this places him at the cutting edge of his profession: “I think it is going through a phenomenal change at the moment.”

He predicts that many of internal changes being made within Cisco, such as new ways of working, new business models and new uses of technology, will probably affect all other sectors of business over the next five to 10 years. “I think it is really important that HR professionals are able to articulate changes that IT is going to force on all organisations. That makes them very marketable in any sector”, he says.

Skill shortages – the next challenge for HR in the IT sector?

Although the recession clearly took the heat off the IT jobs market, there are already rumblings about skill shortages. Mark Crail, head of benchmarking and data services for XpertHR Job Pricing, which specialises in salary surveys, says the need for key skills explains why basic pay in the sector rose by more than 2% in the year to October. This figure is based on research among more than 200 IT companies.

Crail predicts that pay rises will creep up again this year: “This will be driven by higher prices as inflation picks up, by increased demand for computer staff as the recovery begins, and by employers looking to retain staff who may take advantage of the recovery to look for other jobs.”

But George Molyneaux, research director for Salary Services, is cautious about overstating the threat of skill shortages. He points out that although his company’s latest quarterly figures show IT vacancies rose 1% on the previous three months to 65,723, this is still 26% below the level registered at the beginning of 2009. He says: “With so many IT professionals seeking employment, it is difficult to understand the comments that have recently been made by some employer organisations on IT skills shortages still being a problem.”

But Alwyn Welch, chief executive of IT solutions and recruitment company Parity, argues that the speed at which IT companies attract the right people is “absolutely critical” to the speed at which they emerge from the recession. He points out: “Companies have been quick to cut costs on key skills to deal with the downtown, but now they must react equally quickly to bring in the resources they need to support a return in demand for their products and services.”

Welch’s warning follows research commissioned by Parity among 100 senior IT decision-makers in financial services, which suggests widespread complacency about future recruitment needs.

If skills shortages are looming, then it is because IT employers are generally becoming more demanding of any recruits they take on, according to Cisco’s Johnston. He says job applicants increasingly need to articulate broader business values alongside their specific IT expertise. “It is the uniqueness of this blend of skills that is probably very scarce in certain areas.” He believes the change has taken place over the past five years as IT has become increasingly relevant to all areas of business.

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