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WORKING PAPER
ALFRED P. SLOAN SCHOOL OF MANAGEMENT



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TUMJ-OVER .Ai'lONG I'lFOR? !ATTO>
SYSTEMS PROFESSIONALS

by

Thomas A. Barocci
Kifsten R. IVever



WP# 1480-83



September, 19S5



MASSACHUSETTS

INSTITUTE OF TECHNOLOGY

50 MEMORIAL DRIVE

CAMBRIDGE, MASSACHUSETTS 02139



TUR^J-OVER .^i'lONG TNFORMATTON
SYSI'KMS V ROFliSS 1 ON ALS

by

Thomas A. Barocci
Kifsten R. U'ever

IVP# 1480-83 September, 19S3

L



TURN-0VE31 /J10NG IN FORI L\T ION
SYSTEtlS PROFESSIO.'iA LS
INTRODUCTION;

Turn-over rates among Information Systems (l/S) professionals
often exceed 25% annually. From the standpoint of an I/S department
this statistic is alarming, given the fact that its personnel are in
high demand and short supply, and considering that things are likely
to get worse before they get better. High turn-over levels are
disconcerting in any context because of the resulting disruption of
work environments, group dynamics, working patterns and productivity
both in the firm losing the employee and in the company that
subsequently hires that person. From the standpoint of a firm that
relies heavily on its I/S department (or division) what is perhaps
even more distressing is the fact that often only nebulous concepts
of "good people management" appear to offer any solutions.

But the supposed causes for such distress are exaggerated. By

taking a closer look at the motivations and behavior patterns of real

life l/S professionals it is possible for companies to structure l/S

career paths in such a way as to accomplish three important things:

first, controlling and reducing l/S professionals' turn-over rates;

second, augmenting their job satisfaction; third, increasing their

productivity and value to any given specific firm. To anticipate our

This paper was written as part of the Human Resource Policy Project,
Center for Information Systems Research (CISR), Alfred P. Sloan
School of Management, Massachusetts Institute of Technology,
Cambridge, MA 02139. The authors would like to thank the individual
participants and corporate sponsors who took part in this study.
Their names are not mentioned her^ein due to our confidentiality
agreements with them. Thomas A. Barocci is Senior I^ecturer at tne
Sloan School of Management; Kixrscen ?^.. iVever :l3 ^ .'h.D. ca::did:ite at
MIT. Special thanks are due Ms. Christine V. Bullen, Assistant
Director of CISR and Marc Gordon, our user oriented research
assistant.

-1- i:.



conclusion, what is needed is firm-specific training that v;ill
increase l/S personnel's job satisfaction while at the same time
decreasing the chances they v/ill be hired away by competitors.

The purpose of this paper is to analyze the connections among
l/S departmental productivity, l/S professionals' motivations and job
needs, and l/S personnel turn-over levels. Our aim is to pinpoint
the aspects of the first two variables that affect the third. We
begin \7ith a section on the causes of high l/S turn-over levels.
Second, we examine the immediate problems that result from this
dynamic and some serious long-term effects. Third, we consider a
firm-specific approach to these issues, analyzing the advantages and
disadvantages that accrue to both the firms and the individual
professionals involved.

■ Much of this paper is based on extensive interview and
questionnaire data from l/S and user departments at eighteen large
business enterprises in a broad range of industries. We gathered our
information from approximately 800 information systems professionals
from the level of programmer to that of l/S Director, The individual
perceptions of these respondents suggest most strongly that it makes
a great deal of sense not only from the standpoint of these
professionals, but also from that of the firms' top managements, to
approach the l/S turn-over problem vjlth proactive and
company- specific solutions. The exact formula for each individual
firm of course depends on a variety of unique circumstances. But the
unambiguous perceptions of these I/S professionals offer some equally
unambiguous suggestions aoout how to structure a
low-turn-over/high-productivity l/S human resource strategy.



-2-



I/S TURN-OVER LEVELS — CAUSES :

There are a few vjell-knowi facts about l/S personnel, which are
necessary but not sufficient to explain high annual turn-over. To
begin with, their technological bent is paralleled by a sense of
attachment to their occupations rather than to the organizations in
which they work.* This lack of organizational commitment makes it
all the easier for competing companies to l\ire them av:ay from current
jobs v/ith promises of more advanced technological equipment or more
challenging work. At the same time, this phenomenon is furthered by
the involvement of "head-hunters" and by promises of various kinds of
bonuses for internal referrals of other potential "steals".

Wlien demand for I/S professionals is high, salaries increase as
well. New recruits often command salaries that bear little
relationship to their experience in the field or on the job. This
salary compression — where junior personnel earn nearly as much as
senior personnel — in turn contributes to the job dis satisfaction of
the more experienced people, thus making them more likely targets for
head-hunters or direct offers from other firms.

Several other sets of factors have been documented to correlate
with high turn-over rates. When unemployment levels are low,
turn-over rates increase as vrell. The demographic composition of the
labor force also has an impact: younger people are less likely to
stay put in one job.

Many general organizational characteristics also affect
turn-over rates. Turn-over tends to be lowest in manufacturing



*T.A. Barocci and P.E. Cournoyer, "Make or Buy: Computer
Professionals in a Demand Driven Environment," Working Paper
1342-82, Sloan School of Management, M.I.T.



-3-



industries and highest in service sectors (like finance and health
care). At the sane time, turn-over levels are highest for relatively
unskilled blue-collar workers. Routine jobs and non-supportive
managerial styles also correlate with high turn-over levels.

Finally, a ^eL of liitegrativG factors centering on job
satisfaction also bears on the problem. But different kinds of
people are satisfied with different kinds of job characteristics. In
general, job satisfaction is thought to hinge in large measure on
salary and managerial style. For many occupations these conclusions
hold solidly. But in a discussion of l/S professionals it is
critical to distinguish between generally applicable job motivators
and the actual priorities of these employees. Salary is not the
primary consideration for I/S professionals. Table 1, aggregated
into eight job categories, illustrates the results of our data
analysis.

Several striking conclusions can be inferred here. First, all
categories of respondents left their last jobs primarily because they
offered too little opportunity for professional growth. "Management
Problems" and "Career Development Problems" are also important
reasons why these people left their last jobs, along with "Better
Offer Elsewhere" and "More Challenge Elsewhere." Our research also
indicates that job security is quite unimportant to l/S professionals
at all levels.

A number of our respondents had been offered jobs elsewhere,
but chose to remain with their current companies. Among the
n on- managerial respondents, tae most imporcant factors deciding them
to stay were "company location" and "personal reasons," The
managerial respondents turned down other jobs primarily because of
"company location" and "challenging position" (with current firm).



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Online LibraryThomas A BarocciTurn-over among information systems professionals → online text (page 1 of 2)