“Life is part of your time at work”

Check out Peoplebank’s comments in this month’s Human Capital Magazine.

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Are SAP salaries the bananas of the IT world? Inside SAP uses Peoplebank’s data to chart the current market in its annual Yearbook.

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Overview

2011 has seen a steady trend of strengthening demand for ICT contractors. Over the first six months of the year, the Index grew to 1,568 – a rise of 23% from the December 2010 figure.

Figures for July suggest that the Index is at its highest level for several years, as Government continues to invest in new ICT projects.

Throughout 2011, the Index remained (apart from a seasonal dip in April) above the 1,000 mark. The Index for June 2011 stood at 1,568, was the highest value since June 2007, while preliminary figures for July 2011 of 1,702 represents the highest single monthly figure since August 2006’s peak of 1,741.

Working from home can be productive, providing you follow a few guidelines.

Being the first to push a boundary is often nerve-racking, as the Peoplebank executive Michelle Cooper found when returning from maternity leave last year.

“I requested to work Thursday and Friday from home and finish at 4pm the other days,” the IT recruiter’s national manager of people and performance says, noting she was the first in the company’s leadership team to do so. “It was setting a precedent.”

Happily, her boss was onside, pointing out he was more interested in what Cooper achieved than where she worked.

It’s a position many envy. A recent report commissioned by the registered training organisation Upskilled found that 27 per cent of Australians believe working from home would make them happier employees.

Since Cooper began working remotely, Peoplebank has continued reviewing its program.

“A few years back it was more about those with family responsibilities but [now] we’re looking at flexibility overall,” Cooper says.

“For Gen Y it’s about lifestyle and for baby boomers [it's about] looking to slow down. Flexibility is a retention strategy for us.”

The pharmaceutical company sanofi-aventis has realised the same thing.

“In 2010 we agreed we needed to become a more flexible organisation,” its human resources director, Ronan Carolan, says.

“Turnover was high so we needed to do things differently.”

Working from home became part of a broader program offering flexible hours, leave and location.

“The policy now is that anyone can ask to work remotely. You have to be performing to expectations and submit how it is going to work,” Carolan says.

Although the process started quite formally (10 per cent to 15 per cent of sanofi employees are now on formal “remote work” arrangements), 30 per cent now have an informal arrangement with their boss, including Carolan.

If there is no such policy in your own workplace, you’ll need to explain how you’ll meet key performance indicators under the new arrangement.

You can also suggest starting slowly. “[Offer to] start it as a trial for two or three months, to see what’s working or not working,” Carolan says.

Then, ensure you remain accessible to those on site.

“Initially people here thought, ‘Don’t disturb him, he’s working at home’,” he says. “But it’s about people understanding it’s just like a day at the office. I’m at home today and I’ve already had numerous calls from the office.”

Although starting a company-wide program with trusted employees first can allay bosses’ fears, Carolan says trust is part of the package regardless of location. “You have to trust people when they’re at work anyway - they can be sitting on a computer looking like they’re doing something but be Googling,” he says. “If people are meeting expectations, does it matter if they do it from home?”

Although most workers negotiating remote arrangements are after only a day or two out of the office, some are in the position to work from home permanently.

Ashleigh McInnes has been running her PR firm from home for more than a year and soon learnt how to make it work.

“You need to find the right layout,” she says. “When I started out I was living in a two-bedroom apartment and working out of the second bedroom. My employee worked at the kitchen bench. There was no separation from work and home. Now, we live in a three-bedroom, two-storey townhouse, so work rooms are on the ground and ‘life’ is carried out on the top.”

While many work from home to loll about in a tracksuit, McInnes says dressing professionally is key to her productivity.

“I always wear work clothes, including make-up and high heels, even if I don’t have meetings that day. I feel far more focused that way,” she says.

Cooper says her success in working from home comes down to planning ahead.

“You need to organise your time and yourself,” she says. “If you don’t have a printer or scanner at home or [you have] a slow one, do that while you’re in the office. Find a way to communicate with your direct reports - obviously they can use the phone but we also introduced Skype as a means for answering quick questions.”

Many who start working remotely are unlikely to want to go back. Carolan says staff at sanofi love it and he believes it’s part of the reason turnover has halved.

“Employers get a lot out of it. I’ve got no doubt you get your day’s work or more,” he says.

ECONOMIC uncertainty has not dampened tech sector salary growth. Rises are generally in line or slightly above the consumer price index and some specialty roles have a “retention premium”, a survey finds. Peoplebank, Australia’s largest IT recruiter, today released its quarterly salary survey, which tracks rates and salaries in more than 50 IT roles across the country’s capital cities.

It shows demand for technology skills continued to grow in Sydney, Canberra and Perth and remained steady in Melbourne, Adelaide and Brisbane.

Peoplebank chief executive Peter Acheson said salaries generally rose about 3-5 per cent.

“In the specialist areas, where demand is really strong and there is increased tightening, you are seeing rises in the 10-12 per cent, and in some cases 15 per cent, range,” he said.
SAP skills were in tight supply, as were business analysts with a financial background and some categories of senior project management, he said.

“Companies where there are major projects involving substantial capital expenditure are loath to lose key people mid-project,” Mr Acheson said.

“There is a degree of recognition by those companies that they couldn’t afford to lose their senior project manager now because they are only halfway through a project, so there is almost a retention premium.

“They are trying to lock those people in and to make sure that they don’t get tempted by other opportunities.”

The strongest markets for the quarter were resources, utilities and telecommunications, while insurance had been good, and banking and finance remained steady, Mr Acheson said.

The survey finds strong salary movement in senior IT roles. The remuneration of a senior project manager in Sydney has increased from $140,000 in March to $160,000 now.

A senior J2EE architect role in Melbourne has also risen from $140,000 to $160,000 in the past six months.

In the ACT, a senior business analyst is now paid $110,000, up from $95,000 in March.

A senior Oracle Financials Functional role in Adelaide has jumped from $110,000 in April last year to $130,000 this year.

A senior business analyst in Brisbane has gone from $100,000 in April last year to $125,000 now.

Mr Acheson said there were similar trends in contracting, with rises of 3-5 per cent generally and up to 10 per cent for scarce skills.

“It is unlikely that we will see a drop-off, and I don’t think we will see a dramatic increase in demand either, but it is pretty steady.”

He predicted a return to 2007 and early 2008 job levels from March-April next year through to about mid-year.

Amid global economic fears, IT workers were in top demand in the last quarter but bosses weren’t willing to cough up much extra cash, according to the latest survey by IT recruiter Peoplebank.

The latest in the company’s quarterly survey of 50 IT roles in Australian capital cities found that in the last quarter to the beginning of this month, pay rises in those roles were in line or just slightly better than the CPI (consumer price index). Peoplebank noted that the pay rises tended to be in roles that had not had a pay rise in the last year, and were most common in Sydney, Brisbane, Canberra and Adelaide.

In Sydney and Melbourne, demand for IT contractors grew by 10 per cent, with the highest demand in business analysis and project management. The pay rises in Sydney were mostly reserved for senior positions, while Melbourne saw no growth in pay in this quarter.

Peoplebank reported that Perth has seen a 100 per cent growth in demand for IT workers in the past year, though salaries in the city were flat overall in the last quarter. In Adelaide, there was a 15 per cent growth in worker demand, with pay increases in line with the CPI. Canberra had experienced a downturn in the previous three months, but demand in this quarter returned to levels seen a year ago.

In contrast, demand in Brisbane went down slightly for the quarter, but the city still saw a 5 per cent increase in wages for jobs in development, web and support.

Peoplebank CEO Peter Acheson said that although employers were being cautious about IT recruitment, businesses were continuing investment in IT staff as part of system upgrades and business expansions.

“This was especially the case in the enterprise and resources sectors, as well as in the utilities sector in New South Wales and Victoria. This investment in new capabilities was also evident in the types of jobs in hottest demand, such as for IT workers with business analysis, project management, .NET and the next generation web skills,” he said in a statement.

Despite consumer confidence being consistently down in Australia, and looming economic troubles in Europe and the United States, Acheson said IT was going to be important for ailing businesses.

“On the one hand, growth in the domestic economy is clearly weakening, and as a consequence business confidence is lower. However, business today recognises that IT is a key enabler — and with the vast majority of organisations seeing organic growth as a priority for the next 12 months, there is the potential for continued IT investment providing new opportunities for Australia’s IT workers,” he said.

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GLOBAL economic turmoil has heightened caution in Australia, with recruiters warning that new IT projects could be deferred.

While many recruiters and technology chiefs expect hiring to remain steady until the end of the year, market uncertainty is top of mind.

The recent global share meltdown has been compounded in NSW by government plans to axe thousands of public sector roles.

“IT would definitely be in their sights,” Alcami director Jane Bianchini said. “I would think that they would most likely look at a shake-up of the way IT is delivered in NSW. Whether they look at master shared services or outsourcing, I don’t think anything is left unturned with this government.”

Ms Bianchini said that while there was caution in the market, it was not as marked as in 2008, when the global crisis hit.

“In the last two weeks, it has just seemed like the wind has fallen out of the sails of the market,” she said. “Everyone is aware and treading with caution, but no one has said hold fire as a direct result of market forces.”

Ms Bianchini said it was unclear whether it was simply a lull after a flurry of hiring or companies were waiting to see the wash-up of the market turmoil.

“We have seen a bit of a spike in contracting, but it is too early to tell if that is going to play out in the long term,” she said.

Ms Bianchini said recession-proof IT project areas were virtualisation, storage and cloud.

Australian services and software solutions company Contiigo, which integrates systems for retailers, is feeling the effects of the retail slump.

Despite a flurry of activity as retailers move to e-commerce, many are delaying big projects.

“The amount of companies this year that have come to market in this space looking for solutions is far and away greater than anything that has happened previously,” Contiigo chief executive officer Matt Hampshire said.

“There is a really strong demand right up to board level to do something.

“However, when it comes to signing on the dotted line there is still a lot of nervousness.”

About 95 per cent of Contiigo’s clients are in the retail sector, including Target, Woolworths, Jeanswest, Jaycar and Collins Booksellers. Mr Hampshire said the company doubled its staff last year and had planned to do so again this year, but that was now unlikely.

“The last three to four months has seen everyone evaluating and looking at what they are going to do, but very few of them are actually committing serious dollars to doing anything,” he said.

Many retailers were putting plans on hold or deferring decisions until the market improved.

“This time of year is typically when retailers make decisions, because they want to try and get something up before Christmas,” Mr Hampshire said. “My fear is that if they put this off, then we may not see them back in the market again until April-May next year.”

Spark Recruitment director Luke Singleton said the economic woes had made the market jittery.

“July was slow, but August has picked up and there is a lot of demand in the market,” he said.

“The largest companies are the ones taking the most conservative stances — banks are extremely cautious, as is retail.”

Mr Singleton said many chief information officers were delaying hiring decisions and employees were being asked to work harder because businesses were reluctant to hire.

“Some clients have pulled back on their hiring intentions as they take a wait-and-see approach,” he said. As the National Broadband Network rolled out, there would be more demand for telecoms, networking, storage and virtualisation skills, Mr Singleton said.

Real Time Australia director Gary Taylor said businesses were more cautious now than earlier this year. There is a change in sentiment in terms of raising caution and possibly a flattening of rates on both permanent and contract,” Mr Taylor said.

“There are a number of larger financial organisations that have put a freeze on, and that does have an impact throughout the market because of their size and their appetite for IT staff.”

He said there were still shortages in certain skills areas, such as SAP, middleware and SharePoint. Candidate skill shortages continued to be a priority for many technology chiefs, Candle executive general manager Linda Trevor said.

If conditions became even more uncertain, “people will probably hold back on the perm again”, she said. “We are seeing now that permanent and contracting are still fairly steady, with contracting probably slightly ahead.”

Peoplebank chief executive Peter Acheson said the economic uncertainty had yet to affect technology hiring. “What we are hearing in terms of CIOs is that projects that are currently approved and currently funded will continue, but new projects may either get scaled back or might get slightly deferred or re-prioritised,” he said.

“I think it does reflect some caution.”

He said IT would remain strong because of upgrades to core hardware and software projects in corporate Australia, along with regulatory driven IT projects, such as the deployment of smart meters in the utilities sector, the NBN and hiring in the resources sector.

Mr Acheson said SAP, .NET programming, J2EE and project management were all recession-proof skills. HSBC Bank Australia data centre and communications technical services manager Darren Preston said the company did not expect to delay IT hiring.

It was delivering some key projects “and we have got the right resource requirements for those”, he said. “If we have anything that is out of plan or we need to recruit either permanent or contract staff we don’t seem to have any issues.”

Mr Preston said the network stream was an area of expansion from a retail sector perspective.

Planning for the future

Stephanie Christopher, national director of SHL Australia New Zealand, a company which assists companies — including recruitment firms — in their recruitment activities, says that for the more technical positions HR has to fill, “it would lean toward the line manager for advice; it would be the line manager who would have final say”.

She adds that it is extremely uncommon for the HR department to override the employment decision of a departmental head.

“There is a risk with IT that people are promoted on the basis of their technical capabilities alone. IT suffers especially from the Peter Principle (that people are promoted to their level of incompetence, then stay in a job they can’t do).

“HR should be adding value in order to develop IT employees, giving them broader skills. Line managers (in particular) need commercial acumen and communication skills.”

But she adds that “blanket HR objectives are not effective. Every line manager is different, and HR needs to understand different needs.”

Ian Wilkins, former chief technology officer for Tourism Australia, says HR provides context to guidelines where it may be difficult to understand the reasons for certain decisions.

“Understanding the employees’ technology adeptness identifies who needs training and in what systems.”

This applies equally to planning for the next generation of leaders, he says: “HR plays a significant role in determining succession planning and if done well then it is nothing but a positive for both managers and employees.”

Perricone says this understanding must be broader than an HR – IT relationship. It applies across the organisation, and to their understanding of the role of IT, and particularly so with new employees: “(In our organisation) IT is part of the induction and orientation process. This is essential in communicating the existing IT policy and governance framework, IT culture and manage expectations.”

Changes in IT solutions, such as Cloud computing, social media, mobile apps and devices are shifting the business model that requires not only changes in skill sets for IT teams, but technical savvy employees, he says.

“To support these needs, and working with HR, our focus has been to place emphasis towards business analytical, project and relationship management skill sets.”

Associate professor of the Department of Marketing and Management at Macquarie University, Dr Paul Gollan, summarises the dilemma for HR and its relation with line managers generally: “HR managers aspire to be strategic, but they are required to fulfil their duties as a functional expert. In order to gain the respect of the line managers, HR still needs to build their credibility. This is a process that will continue to evolve and once line managers understand the significance of HR to meeting their business goals, then HR will become more demanding and influential.”

CEO of recruitment firm PeopleBank Australia, Peter Acheson, says that proactive HR departments should work closely with IT, ensuring they are on the same page, and to ensure that the IT department, like all departments, performs well.

“IT management should embrace HR,” he says “and not be seen as a competitor. Together they need to manage talent, get the right people for the right job, and ensure that succession planning is in place.”

Which may mean that it is as much the responsibility of IT managers to forge the relationship as it is for HR to reach out to those people it serves.

It’s time for CIOs and HR to recognise their similarities and plan for the next generation of leaders

Tell me if you’ve heard this one before: “Managers aspire to be strategic, but they are required to fulfill their duties as a functional expert.”

If you think this applies to the role of the CIO, held back by the purely technical needs of the operation that impede the opportunities for strategic management, you’d be right. But you might be surprised to learn that this judgement was not written for IT management, but for human resources (HR).

In a recent research paper titled HR on the Line, author Dr Paul Gollan, associate professor of the Department of Marketing and Management at Macquarie University, says that line managers within both large and small organisations see the HR function as good at meeting operational goals, but 60 per cent believe that HR limits their ability to meet business goals.

Historically the relationship between CIOs and HR has never been close “A startling statistic,” he says, “but one that supports the traditional role assigned to the function of HR — that of being an administrative paper shuffling rather than a business driven strategic development.

“Some organisations still perceive the HR function to be lower in the management hierarchy, and due to lack of clear financial outcomes, it is often not taken seriously.”

Substitute IT for HR, and “routine technology operations” for “paper shuffling”, and you probably have a scenario that sounds horribly familiar.

Marketing, operations and even finance are seen in many organisations as those departments that are at the cutting edge of organisational strategy and forward vision — the rest are there to keep the wheels turning.

But if HR and IT share a similar reputation, how well do they get on with each other? Do they work in partnership, and can they help each other step up through the ‘management hierarchy’?
Most organisations at least espouse the mantra of ‘people are our greatest asset’. And in an environment where there might be a skills shortage, especially in IT, you would think these two departments would work very much hand-in-hand to ensure they keep the best they have (and the intellectual property they hold) and attract the best that might be available.

Many large IT departments have their own HR function, with staff holding an HR background rather than IT. Others, however, have to rely on the skills and understanding of a department distinct from their own operations, with priorities that may be as much about developing a strategic role for themselves as it is doing the same for other departments.

Joe Perricone, IT manager for the Cerebral Palsy Alliance, says he is “in contact with our HR management team ‘virtually’ daily for all matters, such as breaches of conduct, management decisions and impact to team performance, and most importantly maintaining the integrity of human resources and IS systems”. He adds that “the HR team ensures any changes and business needs are in consultation with IT.
“It simply makes our job easier when support is needed.”

A positive relationship, then.

But, according to Robert Yue, vice-president of recruitment management software supplier SuccessFactors Australia, “Historically the relationship between CIOs and HR has never been close. Both departments had different objectives and were responsible for running different areas of the business.”

Harking back to Gollan’s assessment, Yue says “HR for many organisations was not typically a strategic player at the boardroom of the business. It has often been known as the department responsible for the back office of the company such as handling administrative tasks such as payroll and healthcare benefits.”

He adds, however, that thanks to advancements in technology, HR is becoming empowered to play a pivotal role in business execution, allowing it to see the “death of the three-ring binder”.

Perricone agrees, and takes it further: “HR’s reliance on IT is of upmost importance and highest priority. For example, pays need to be on-time, every time and correctly.” Whether dishing out the brown envelopes can be seen as strategic, it is certainly an important part of business execution. Unpaid employees are, by tradition, not a happy lot, so anything IT can do to ensure this process runs smoothly is bound to be appreciated by all. Then again, if IT fails to deliver, everybody in the company knows who’s to blame.

Peter Acheson, CEO of recruitment firm PeopleBank Australia, says this awareness goes right to the top. “CEOs say: I have a real interest in the CIO because IT is the one thing I can get fired over.”

One need only look at recent events concerning IT issues which have led to some senior executives losing their positions to see how importantly management regard IT — as a department that keeps the wheels turning.

There’s a pressing need from the top levels, therefore, for HR to understand the needs of IT, and help it achieve the best performance possible.

But does it understand what those needs are?