Pay equity is at the heart of business concerns. Pay scales are built to offer an equity within the company, however, the internal reality can often be out of step with the market.
When the demand for specialized resources exceeds supply, the companies needing these skills find themselves under a great pressure, particularly if wage scales can not be adjusted.
The case of programmer analysts is a perfect example to illustrate this situation. Several computer languages are growing while others are in decline. The increase in the number of developers trained in specific specialties has not kept pace with demand.
Resources in high demand: how much are they worth?
Today, high-demand skills can push up wages. This is the case to attract a SharePoint or C# developer. It is expected to pay, respectively a 13% and 9% higher salary than a standard analyst programmer (developer).
For example, we recruited an ASP.NET developer on behalf of a customer without real difficulty, because the salary range offered corresponded to the standard for the region and for the experience. We are now helping this same client to recruit a BI (Business Intelligence) developer at the same salary level as the ASP.NET programmer. This is an impossible task and management is aware, but this is the status quo.
In a deadlock, IT departments leaders must stay in constant standby to select candidates who may be present on the market and hope that one of them accepts the salary conditions. Yet this approach is inconsistent with an effective recruitment process.
Many companies were pushed to reconsider their pay scales for SAP programmers because of a too large gap that existed between their salary scale and the reality of the market. This reality will usually be dictated by the companies that have the greatest need in a specific type of resource and by consulting firms.
Large consulting firms who place specialized resources at their clients have the ability to push average wages up, because the salary cost is invoiced. Plus salaries are on the rise in consultation, as well the market for permanent resources is increasing in value.
The spiral of lack of resources
When the activity of a department exceeds the capacity of the team in place, employees are over-worked and over-stressed, which can cause several consequences:
• Employee dissatisfaction grows because the demands are too high
• Increased costs for the company to pay overtime
• Ultimately, employees may leave the company, which will amplify the recruitment problem
This raises the issue of the investment put into employees with specific IT skills and the retention of these resources.
The costs allocated to the development of a resource will be returned in the medium and long term. For this reason, there is a risk to see employees with specific skills that have been developed through your investment leave the company.
The difficult decision to revise pay scales
The process that will lead to a revision of the pay scale for some specialized resources will usually be long. It will take a significant number of frustrating events that have both human, financial and business in general impacts to take action. Many companies will learn the hard way that there is a discrepancy:
• Several unsuccessful attempts at recruitment
• Delay in projects
• Call for consultants to deliver urgent projects
• Awareness of the costs of consultation
• New recruitment efforts
When this cycle is repeated over several years and that the total costs associated with the management of high demand resources is calculated, companies will be ready to change.
Beyond human resources and IT
Solving the problem of wage scales in IT departments is a real business decision. When the difficulties to surround yourself with good resources puts a brake on growth, it is no longer a simple question of salary equity, but more about the corporate vision.
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