Tackling human resources issues is becoming a paramount issue for an IT channel increasingly troubled by skills shortages and cutthroat competition. In such an atmosphere of uncertainty, staff retention is a goal that should be pursued as the Holy Grail of the IT world, but you should know what to do if it becomes necessary to fire staff. Rebecca Munro investigates.
Hiring and firing can be a trau-matic experience for all concerned, not just the dithering interviewee or the outraged and outgoing employee. Business managers in particular need to know how to keep the stress to a minimum and the business bottom line at a maximum. The easiest option for achieving both is to maintain a stable work environment, with staff retention as the key ingredient.
Recruitment firm Morgan & Banks estimates the cost of hiring and training a new employee is the equivalent of that person's salary. In an industry renowned for its inflationary wages and transitory staff, high employee turnover and poor performance adds up to a lot of dollars spent. Perhaps even more importantly, in an industry as dynamic as IT, finding and firing staff can equal a whole lot of wasted time.
Thus, a formulated hire and fire program is essential in reducing the grief for both parties involved in either process and hopefully limits the fallout for the business economically and legally.
As any good staff retention crusader will tell you, advanced planning is essential in any endeavour and one of the keys to staff retention is an effective hiring process.
Morgan & Banks' divisional manager John Banks says the first step in the entire process should be to "determine why you want to hire someone" and to avoid "pulling out the 10-year-old job description and redefine the role and competencies required".
This includes avoiding comparisons of the position under the previous custodian to how you believe the position will be filled now. "Everyone is an individual," explains Banks and they will, to an extent, mould the position to their own personalities and strengths.
This is why character and cultural fits are just as important as business and technical knowledge, claims Banks.
David Frost, general manager of South Australian reseller CPM&S, says his strategy was to interview everyone personally and assimilate them into the culture of CPM&S. "Everyone is really social. The trap is that as you grow, the cultural thing takes a bit of a backburner as you need someone now! I am now reluctant to hire someone too quickly, it is more about getting the right person the first time, so we've gone back to fitting people culturally."
John Johnston, managing director of Melbourne reseller Centari Systems, searches for people with particular personality traits rather than looking exclusively at their current skill set and work record. "People who have an innate capability for independence will always handle most situations better than someone who needs guidance and supervision."
Yet once you have the right staff there is no time for complacency, the quest is still only a third complete, especially in the IT environment of big bucks, head hunters and, as Frost explains, even the disguised threat of IT camaraderie. "The IT community is a close-knit one. Most resellers either operate in niches or compete with one another. We all know who our competition is and who the best staff are."
In such an environment, staff retention becomes necessary to a business's consistent growth. Banks predicts that companies with active retention policies are more likely to have an overall strategic policy than those that merely hope for the best. "The IT industry is beginning to recognise the turnover cost that staff loss entails. They are spending more money on retaining staff and the most forward-looking organisations need to ensure that they attract high-performance staff."
Conducive to advancements
Frost attempts to counter the transitory nature of the IT industry with an internal structure conducive to advancements within the company. "I put a junior on at the bottom end and train them up. This is hard in small organisations which are basically benevolent dictatorships - they don't have broad management structures." To compensate for this, "work can't just be work - it has to be fun as well".
Johnston believes staff need flexibility in order to perform optimally and remain engaged with their job. To this end he encourages "a minimum of direct management. Everything is defined and agreed upon and as long as the results are there employees can do it however they want."
For this system to work Johnston relies on the simple adage "communicate. We communicate up-front, regardless of whether there is a problem or not. Right from the start we meet once a week to get feedback on how a person is fitting in and what they want to do."
The relationship has to be mutually beneficial for both parties. Bob Swingburne, general manager of Sydney-based reseller AM International, has definite criteria and performance measures that his sales staff must live up to. "Sales quotas are measured on a monthly basis and if staff are not performing they receive counselling. If it is still not working they receive three warning letters. This complies with the letter of the law." Yet Swingburne has the advantage of a central office and human resources department to advise him on legal issues and management responsibilities. Many resellers must decide themselves on realistic expectations, and the consequences if these are not met.
The legalities of these decisions are not difficult to incorporate and Banks stresses that companies must be sure of their legal requirements in such a sensitive situation. "You need to be on solid legal ground as an organisation, particularly if they are long-serving employees and if you haven't been through a counselling process," he explains. Solid ground involves a formal warning to the employee of the perceived problem. There should be some action taken before dismissal is an option.
There is no sure way to avoid the emotional entanglements that prevail but it is possible to stop these from degenerating into serious legal threats by ensuring that your business has complied with legal demands. Resellers are all too aware that disgruntled employees are often unconcerned that they were treated within the confines of the law and they take the issue a step further -- to the Unfair Dismissal Tribunal. "It seems to me there is a pleth-ora of people taking legal action. People are unwilling to accept that they sometimes are just not performing. In the end it is easier to just settle out of court, even if you haven't done anything wrong," claims Swingburne. Resellers are concerned at the ease with which ex-employees can vent their anger in this fashion and it emphasises the point that a legally correct dismissal process can prepare a reseller for this contingency.
Johnston recognises the law protects both the employee and employer so he takes steps to ensure that not only Centari complies with dismissal laws but that employees are not driven to exercise their rights of appeal. He explains that Centari Systems' commitment to its employees extends even to those thinking of abandoning the company. "It is not in our best interest to have disgruntled ex-employees out there. We give people time off to look for another job. This is because I fundamentally believe that everyone wants to do a good job. If something is going wrong it is not the employee's problem. We need to find out from them how the company can improve. If we find inconsistencies we need to change things."
Yet adhering to legal constraints is only part of what a reseller needs to consider when approaching the issue of performance, or lack thereof. Business considerations, both financial and strategic, play a part in how an employee operates and, more pessimistically, how they are reprimanded and even dismissed.
The harmony of the business might sound like some New Age fandangle notion far removed from the hard-hitting cries of the IT industry, but disruptions not only cost money, they harm morale. They have the potential to create a landslide of similar problems, including other staff becoming disenchanted with their positions or the treatment of the departing employee.
The first rule is to confront the issue immediately and directly. "If you have tried everything to keep the person, including moving them in the company, you need to make the decision quickly. A lot of managers ponder too long on the issue," says Banks. "If both parties are aware of the issues and understand the responsibilities required of them, they are a step closer to parting gracefully."
Johnston's experience has been that if the issue is confronted there is less chance it will explode in recriminations than if it is left to fester. "It is very unusual for a person to want to remain if they are not delivering results. On occasion we have had to go through the formal notification process and counselling sessions but if there is no solution in sight the person will generally leave of their own accord because we have handled the situation fairly and with dignity."
Respect is often undermined by the frustration a manager feels at an employee's lack of performance. However, Banks suggests that laying blame is a futile and destructive exercise because "people go off the boil occasionally and organisations change direction. The IT industry is one of rapid growth. Organisations are constantly changing direction and job descriptions are constantly evolving. It is a very volatile environment. Strategically, companies don't know where they are going to be in a couple of years. Dealing with this mercurial environment is difficult for managers."
Exit interviews are generally considered to be helpful in establishing the cause of the problems, how they were handled and future solutions and changes. Swingburne finds the experience invaluable.
"Everytime you lose someone you should learn something. I had to dismiss a salesperson who hadn't been performing. In the end we didn't replace him; instead we changed the structure of our team and split the territory he had been covering with two other sales guys. It saved us some money and now the job is getting done."
Frost is not so supportive of exit interviews, claiming that people are far from open about the issues that need confronting. "Sure we sit down and have an exit interview, but I'm not sure that people are brutally honest. They aren't willing to close any doors behind them. Also, why would they want to offer us advice?"
Yet despite the numerous obstacles, the Holy Grail is obtainable and the rules of hiring, retention and dismissal are all integral to the process. But as Johnston says, "people are the most important element of any business's success, so look after them."