Richard Fike, an IT development architect at John Hancock Financial Services, quit his last two jobs because he wasn't getting enough of it. But now he's happy because he's getting plenty of it. Eddie Schultz, a CAD quality engineer at Conexant Systems is feeling secure and staying put, partly because he gets as much of it as he needs.

What's the X factor dictating whether these highly talented IT pros are satisfied in their jobs or casting a wandering eye elsewhere? Not cash. Not vacations. Not even stock options. It's company-paid IT training.

"If I wasn't able to go to these sessions, I'd feel that new technologies were passing me by," Schultz said. "I would feel less secure in my ability to do my job."

Since 1999, as the Web economy has boomed and people with key IT skills have become increasingly hard to find, many companies have significantly boosted investments in internal IT training, at least partly in an effort to attract and retain IT talent.

Now, as the economy cools and dot-coms tumble, some are wondering if those investments in training have paid off and if they are still necessary. The attitudes of IT pros like Fike and Schultz, plus new research, suggest the answer to the first question is yes; enterprises like Hancock and Conexant that are continuing to increase training spending are attracting and keeping the best talent. And, experts say, despite the softening economy, people with critical IT skills will continue to be hard and expensive to find in most regions for the foreseeable future. So, they say, now is not the time to slash the training budget.

Despite mounting dot-com layoffs, nearly a million IT jobs are still vacant by some estimates. And, experts say, that number won't be going down any time soon. That's because, as the baby boom generation ages, more IT pros will retire than will enter the work force every year from now until 2017, according to a recent report by human resources consulting company Watson Wyatt. At the same time, universities are not significantly increasing the number of students graduating with IT-related degrees, experts say.

Therefore, savvy e-business managers will still focus on attracting and retaining top IT talent. And, experts say, one of the best ways to do that is to invest in training programs.

"When we survey IT workers about what impacts their decision to leave a job, at the top of the list are complaints that they weren't working on interesting-enough projects and that their company did not give them enough training," said Maria Schafer, an analyst at Meta Group and an expert on IT staffing issues.

There's little doubt that, as the IT skills shortage has intensified in recent years, enterprises have increased spending on training.

According to a December 2000 survey of 410 U.S. companies by Watson Wyatt, the percentage of employers offering skills training as an incentive for top-performing employees to stay increased from 62 percent in 1999 to 68 percent last year. More impressively, Schafer said the average training budget per IT employee among the companies she tracks doubled from US$500 in 1999 to $1,000 last year. At the same time, she said, Meta Group's research shows average turnover among IT staffs dropped from 15 percent in 1999 to 11 percent last year, partly because of the meltdown by dot-com companies. But it's also partly attributable to successful training programs, Schafer said.

And most U.S. companies report they're planning to continue to increase IT training spending this year, although not at the rate Schafer said they did in 2000. U.S. companies told Meta Group they will increase spending on IT training by 5 percent to 10 percent this year in a bid to hold on to talented IT workers.

It works

If Hancock's Fike is any indication, there's a direct link between the availability of training and an IT pro's willingness to stick with a company. Before joining Hancock in 1998, Fike was frustrated in previous jobsâ€"at a small startup and at an electric utilityâ€"where IT training wasn't available. Managers at those companies, Fike said, were too focused on current projects to think about preparing IT workers for upcoming projects that would require knowledge of new technologies. That didn't sit well with Fike for a couple of reasons: Thinking ahead to the next project, he said, is crucial to an enterprise's e-business success, but it was clear his managers were not doing it; and, without training on new technologies, he was getting bored with repetitive tasks.

Fike, who develops Web security and online transaction applications for Hancock's Web sites, said that since joining the company, he's taken beginning and advanced Java classes and a course on the Netscape Communications application server environment.

"Hopefully, I'll keep learning new skills until the day I retire," he said. "I try to do training for the long haul. I like to think six months ahead of what we're working on now" when picking new courses to take.

As for Schultz, IT training has helped him stay nimble and up-to-date as his job responsibilities have expanded. After six years with Conexant, a maker of chips for cell phones and other handheld wireless devices, Schultz realised he needed more hands-on knowledge of the company's digital chip design operation. The company arranged for him to get trained on the software package that runs the chip design system, giving him the knowledge he needed to spot potential design problems faster and to find innovative solutions.

Schultz's managers, feeling the IT staff crunch, have also approved training in other areas that will make Schultz more valuable to the enterprise. "I also took a [Lotus] Notes administration course," he said, that prepared him to step in if the company's regular Notes gurus need assistance.

But, for employers like Hancock and Conexant, training to retain IT pros isn't just about spending more. It's about spending more on developing people with the right new skills and technical knowledge.

That means, experts say, that training offered should be directly linked to your company's e-business and technology strategies. Take a look at the next several e-business projects you have coming up, figure out which are the most important, then decide what skills your people need to complete those projects, experts say. If they don't have those skills now, you'll need to train for them.

"Training programs work when the people designing them have a vision of where the company's business is headed," said Bob Zawacki, an independent HR consultant and a professor emeritus in the management program at the University of Colorado, in Colorado Springs. "You can even train based on what you've learned from your failures."

Fike agreed. "Training courses work best when they are tactically related to the company's business goals," he said. "If the company constantly provides me with the tools I need to do my job effectively, then this is a place where I can grow and a place I'll stay."

Hancock's training spending, for example, has been heavily influenced by the company's e-business strategy to offer consumers new online tools to do everything from investment planning to starting savings programs. So Hancock has been focusing on HTML, Java and, soon, Extensible Markup Language training, as well as training in client/server and mainframe techniques. In addition, Hancock has been emphasising vendor-focused courses from companies such as Oracle and Sun Microsystems.

Managing the mix

As enterprises like Hancock begin to target this wide range of new skills, they'll need to offer a mix of courses, some run by outside vendors and some internally developed and focused on proprietary systems and internal business processes.

To bring all that together, many companies are appointing managers dedicated to overseeing IT training programs. And, in many cases, those managers are turning to outside training vendors that can bring together a wide range of courses in one online catalog and, often, help enterprises cut the cost of procuring online or classroom training.

At Hancock, for example, IT Training Manager Donna Cleary, who oversees training for the company's 1,000 IT workers, recently signed the company up as a beta user of Smart2 Partner.com, a training e-marketplace. Smart2Partner, set to launch officially this month, works on the group-buying model to help users find the right courses among offerings from 50 IT training vendors. Smart2Partner then resells the courses at reduced rates. Smart2Partner officials say its training rates are up to 20 percent below typical rates.

Cleary said Hancock's trial of Smart2Partner is starting to pay off. She wouldn't give exact return-on-investment figures but said John Hancock Financial Services is "definitely saving money" on its $1 million yearly training budget since signing on with the e-marketplace. (Overall, Hancock plans to increase IT training spending by 10 percent this year over last.)

Besides providing lower-cost training, the e-marketplace has helped customise courses for Hancock and made it easier for IT workers at Hancock to sign up for training using Smart2Partner's online course catalog. That, Cleary said, means more IT workers are taking advantage of the offerings.

Smart2Partner isn't the only e-market place for IT courses. Another is E-Learn IT's IQDestination, an online clearinghouse for classroom-based and online IT training classes that also offers volume-based discounts for technology training courses.

But employers must do more than just be willing to pay for training and make it available online through an e-marketplace. For enterprises to get the most out of their training spending and to keep IT pros happy, they've also got to help already-overworked professionals find the time to fit training into their schedules, experts say. The best way to do that, according to IT training managers, is to build time for training right into project planning.

"There are time pressures, and sometimes people have to jump out of classes because there's a project that just won't wait," said Gerry Hudson-Martin, vice president of training and enthusiastic learning at hotel chain Marriott International. E-learningâ€"self-service classes delivered onlineâ€"can also help, Hudson-Martin said, since employees can train right at their desks in between other tasks. Now Marriott delivers fewer than 10 percent of its IT courses online, but the percentage is expected to increase this year, he said.

Hudson-Martin, who's in charge of training for 1,300 of the company's 1,400 IT workers based at the Bethesda facility, said the primary goals of Marriott's training program are building project management skills, providing new tools training and vendor-focused certifications, and building a methodology for designing the company's e-business infrastructure.

Like Hancock, Marriott is increasing spending on IT training this year. And, Hudson-Martin said, the payoff has been clear. While he would not release a specific figure for the hotel chain's IT worker turnover, he said it falls below the average for U.S. companies. "The training does improve retention," he said.

And, for many enterprises, the benefits of retaining IT workers go well beyond avoiding the need to recruit in a tight IT skills market, something that can be very expensive.

At Hancock, for example, after 10 years of organised IT training and application of a policy that mandates all IT workers take at least eight days of training per year, the company may soon be able to reduce its reliance on contract IT workers, said Steve Rosenblum, director of IT work force development. That, Rosenblum said, is because Hancock, by investing in training, has been able to hold on to the IT workers it has.

"Retention is a huge benefit of training programs because people stay where they feel wanted," Rosenblum said.

How to retain your IT staff

• Develop a team atmosphere. Allow flexibility in work schedules and practices and reward workers who solve problems creativelyâ€"even if the solution is somewhat unorthodox.
• Provide challenging IT projects that allow workers to use the latest technologies.
• Offer skills assessment tools. These allow workers to determine which skills they need to develop further to do their jobs more efficiently.
• Review salaries frequently to ensure that the salaries you're offering match the market.
• Implement continuous learning at all job levels. This means giving workers access to cutting-edge training courses that help them get up to speed on technologies being deployed by the company. But it doesn't mean offering training on technologies that are far outside the scope of the company's IT projects.

Source: Meta Group Human Capital Management Best Practices report, December 2000

If you thought training was pricey ...

If you're planning your company's technology spending budget for this year, you might be reaching for the antacids right about now. With bad economic karma everywhere you lookâ€"PC sales down, dot-coms still going up in smoke, and everyone from Amazon.com to Lucent Technologies to Daimler-Chrysler slashing jobsâ€"you might be seeking expendable items on that budget list, just in case the bad times hit your bottom line.

If you think IT training is a good place to make the first cut, here's something to think about: Some human capital management experts say that even if cutting training budgets saves you a little money now, it's likely to cost you a lot more in the long run.

That's because, when you discover you have an urgent need for, say, three Extensible Markup Language experts to complete a project, you may end up with no choice but to go out into the marketplace and hire them to get the project moving more quickly than you could if you waited for current workers to finish training. And that will cost big bucks.

"No matter what, hiring a new worker is an extremely expensive proposition," said Maria Schafer, an analyst at Meta Group and an expert on IT staffing issues. Meta Group's research shows that when an employee leaves, it costs from one-and-a-half to two times his or her salary to hire a replacement once you include salary in creases, advertising, and third-party recruiter fees and hiring bonuses paid to the new worker, Schafer said. Filling newly created positions can also cost a sizable chunk of that new worker's salary. "It's absolutely cheaper to retrain your existing workers. When you think about the cost of filling a $50,000 position, it's clear that you can buy a lot of training for that money," Schafer said.

And chances are you'll need to train anyway, even if you're not deploying new technologies in the near future.

"The nature of IT is that you need constant retraining," even to support holdover projects, said Rick Beal, strategic rewards practice leader at Watson Wyatt, a human resources consulting company.

But Beal cautioned IT training managers to evaluate training requests on a case-by-case basis. Some expenditures may be needless, he said.

"If you need workers with a specific skill for a project that will only happen once, it makes more sense financially to hire contract workers for that project" than to train current workers or hire new ones, he said.

Besides increasing retention and eliminating the cost of looking for and hiring IT workers, maintaining a robust training program can have another benefit, experts say: It can give your company a recruitment advantage when the time does come to hire, said Bob Zawacki, an independent HR consultant and a professor emeritus in the management program at the University of Colorado.

"Offering career development tools such as training, solid salary and benefits, and all the resources workers need to complete technology projects is the best way to give your company a competitive advantage" in hiring IT workers, Zawacki said.

"If you treat them right, most of them won't leave," he said.

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