Abstract

This article presents the problem of retaining year 2000 personnel at the same time as other companies are trying to lure them away. What is to be done in view of escalating salary offers for top talent?

The paper takes the position that, as long as salaries offered are competitive, the deciding factors that determine whether employees will stay or leave are the same as the factors as usually operate in the employer-employee relationship. Even if pay is not competitive, these factors may outweigh differences in pay for some employees.

Outline

Abstract

Why Is 2000 A Problem: Source of the problem

General Staff Retention: Usual methods of staff retention still apply

Balancing Work and Life: What separates the usual employer from the extradinary one few people want to leave

Telecommuting: One benefit that may make a difference

What is Currently Being Done About Year 2000 Staffing: Bonus plans

Government Efforts to Retain Y2K Staff: Texas, Virginia and Rhode Island

Year 2000 Need: Global problems

Annotated Bibliography: Sources with hyperlinks to source documents

Problem Statement

Why is the Year 2000 a Problem?

The Year 2000 problem comes from the practice begun in the 1960's of saving expensive computer storage space by storing all years with two digit years. If a man says he "was born in '29", everyone understands that he was born in 1929, not 1829 and not 2029. For he would have to be over 150 years old to have been born in 1829 and few, if any today, live that long and 2029 has not yet come.

My oldest daughter was born in '93. In 1999, she will be 6 years old. For a computer to calculate that, the computer takes the current year, '99, and subtract the birth year, '93. The result is 6 years old.

Notice what happens if the computer uses the same algorithm to calculate her age in the year 2000, still doing the calculation with 2 digit years. In 2000, she may suddenly be 93 years old and ready to receive social security benefits. Here is how: the computer takes the current year, '00, and subtracts the birth year, '93. The result is -93. Few, if any, computer programs know how to interpret negative dates, ages, etc. so they will probably discard the sign and she is suddenly 93 years old.

For this calculation to happen in computer systems of the Social Security system, banks with loans and deposits (what happens if all the deposits and loans are suddenly credited with an extra 100 years of interest), even kindergarten invitation systems may fill nursing homes with new that patients around 100 years old should be coming in to register for kindergarten. The results of this discontinuity in computer stored dates is severe (and sometimes humorous in retrospect) impact on computer systems which store or use dates or date derived information.

When computer programs were written in the 1960's, 1970's and 1980's, everyone assumed that their programs would be replace by more modern programs long before the year 2000. The "two digit year standard" was carried into programs written in the 1990's. It wasn't until 1996 that even common applications, such as Microsoft Excel, would recognize anything outside of the range 1900-1999 when a year was typed with a two digits.

Virtually every major computer system stores or utilizes dates and/or date derived information. Even devises using embedded computers, such as automobiles, VCRs, elevators, etc. could be effected.

The cost to fix these problems is going to be staggering, in the billions of dollars worldwide. Over the decades that a two digit year has been used, it has been estimated that a similar amount has been saved by businesses and governments not having to purchase more memory and disk storage space to store those extra two digits. In hindsight, it was a cost delay, not a cost savings.

Estimates are that there will not be enough programmers to fix all the problems in time. The shortage of programmers has already started a bidding war between major companies for employees to solve their (or their clients) Year 2000 problems. The goal of this paper is to look at what companies (and governments) are doing and must do to provide enough staff to solve the Year 2000 problem.

The fixes for Year 2000 have been described by many as "not rocket science". Changes are routine and there are some automated tools. Invariably, these tools are only about 80% accurate and require a programmer to check the changes done by the tool for accuracy. This means the Year 2000 problem is highly manually intensive.6

In an article appropriately titled "Bosses Despair Over Staff Poaching", it was stated that it is not uncommon to see offers which are more than double the current salary. The Gartner Group forecasts a surge in salaries during the first quarter of 1998.8

General Staff Retention

One would expect that some of the same techniques for staff retention will work as the techniques employed by corporations for usual staff retention. Therefore, it make sense to observe how staff retention is achieved in the normal work environment.

Furthermore, even if it were easy to replace employees lost dues to Year 2000 concerns, it will cost valuable time for the new employees to ramp up to speed. One unusual characteristic of the Year 2000 problem is that it allows for no slippage in schedule. The Year 2000 is coming ever so much closer and there is no stopping it.

Finally, employee retention may be a major cause of customer retention. It has been suggested that the road to profitability is not through costs, or even customers, but through fulfilling employees' needs.16

Balancing work and life

Being able to balance work and family responsibilities is a key factor to employee retention. A July, 1996 survey in London, England showed that "helping employees to achieve a better balance between their work and personal lives is the factor most likely to encourage them, and in the highest performers, to stay with an organization."36

Hoechst Celanese is one of the world's largest producers of pharmaceuticals, chemicals. A March, 1997 survey of 3000 Hoechst professional, administrative and manufacturing employees found that this balance was the most critical factor for women. For men, this was the second most important. The only factor higher rated for men was job security.21 The company views their "work/life programs as a powerful tool in helping in helping to attract and retain employees and in strengthening employee commitment.

The Hoechst survey found that employees who were aware of the work/life programs of the company were 20% more likely to strongly agree with the statement "I am willing to go the extra mile to meet business needs". Furthermore, the aware employees were 39% more likely to strongly agree with statements like "I expect to remain with the company for the next three years". This, the report claimed, shows that employees who were aware of work/family balancing programs were more committed to the company and more likely to stay.

DuPont released a study from October, 1995 which concurs with the Hoechst study. This was the third study in ten years of life/work programs in the company. The following is a quote from John A. Krol, DuPont's president and CEO, "The results of the study clearly indicate that work/life programs are a powerful tool to motivate people and encourage commitment to achieving business objectives. We've always said that people are our most important asset. This study demonstrates that when a company acts on this belief by responding to employee concerns, it is not only good for our people, but it is good for the business as well."30

The DuPont study found the work/life tradeoffs caused 34% to refuse relocation, 24% refused jobs that required increased travel, 21% refused overtime or a job with more pressure, 12% refused promotions. DuPont's work/life programs include:

Motorola's LifeSteps benefits package is believed an effective employee retention tool. The four part plan includes these components17

Employers must determine what are the drivers of employee satisfaction26 , what are the root causes that they choose to remain with the company, and maximize those elements of the employees life as much as possible. Things an employer can do to improve commitment include:

In a 1997 career satisfaction survey of research and development professionals by Kelly Scientific Resources, it was found that there was poor correlation between the 75 percent who ranked their salary as "good" or "fair" and intent to stay at the position for the next two years. This showed that, as long as salaries were competitive, salary was not a primary factor in employee retention.17

The KRS survey also found that the opportunity to do exciting and significant work, especially with talented colleagues, is a key to retention. The three top aspects of the job were "solving challenging problems", "the people I work with", and "interesting work/variety of work".17

The KRS survey found the top workplace concern was "keeping current on technology". Hewlett-Packard has a program which allows certain promising R& D personnel to return to school full time to get a masters degree while still drawing a salary and having books and tuition covered.17

The KRS survey found management styles should correlate to employee preferences. The singles least favorable aspect of the job was "too much bureaucracy", followed by "no opportunity for advancement". "Lack of management feedback" was also on the top five.17

Examples of management styles tailored to employees include:

Another one of the top five list of least satisfying aspects of the job in Kelly Scientific Resources survey was "not enough appreciation". So many employers offer lots of award programs for researchers.17

Telecommuting

One way to maximize employee satisfaction is the option of telecommuting. There are three types of telecommuting: working from home, working from a satellite office (allowing employees to reduce commute time and expense by commuting to a location away from the main office facility), and commuting to a community work center shared by employees of different companies.2 A major California study revealed that telecommuters believe benefits of telecommuting far exceed their initial expectations and are eager to expand the number of days they telecommute.3

General benefits of telecommuting include:

The recruiting and retention benefits of telecommuting are:

Consider telecommuting a few days per week. Several steps must be completed for an employee to begin telecommuting. A more detailed, step by step plan can be found on pages 9-21 of Smart Valley Telecommuting Guide.

Year 2000 Staff Retention

What is currently being done about Year 2000 staffing

There are two basic questions, recruiting and retaining. Retention is the far more important to IS shops who already have personnel.

As long as companies offer mainframe staff compensation that is commensurate with current market range, nonmonetary benefits should prevent turnover--even as the market for skills intensifies.6

In the State of Washington, it is illegal to provide special retention incentives to Year 2000 workers. As of April, 1997, the Department of Information Resources (DIR) had lost none of its Year 2000 workers to private industry despite higher salaries being offered there. According to DIR's director, "This is a small community. People's roots are here. Employees are loyal to the state and their commitment may be different."7 But even DIR's director admits that the lifestyle and sense of community may not be enough to keep employees as the salary bidding was increases.

Bonuses are a popular incentive for retention in private industry. A top 10 financial institution is paying out Year 2000 bonuses of at least $30,000 between now and the Year 2000.7 A major financial services firm is offering a bonus of 25% of salary for an employee staying through 1997, 50% of salary for an employee staying through 1998 and 75% of salary for an employee staying through 1999.7 A major retailer is offering Year 2000 workers a second full year of salary for those who stay until 2000.7 Vesting stock options which mature at the date of completion are another incentive.7

A Year 2000 program manager for a major corporation stated "Companies which have been through downsizing need to have stronger retention program. No amount of money works where employees loyalty is gone. Loyalty is better that a retention program. A retention program is just icing on the cake."7

Bonuses are also used for recruitment. Signing bonuses are offered when hired or at an agreed date in the future.7

One large insurance company in Illinois prefers new COBOL programmer to more experienced staff because they are more likely to stay with getting the monotonous date-conversion work done. The new programmers are more likely to follow directions because they don't know enough to follow other creative instincts of more seasoned staff.6

Training can be an incentive for workers to stay with a Year 2000 project. Some firms offer to retrain Year 2000 workers in newer technology at the end of Year 2000 projects.7 Computer based training (CBT) is another benefit that will build company loyalty (ant therefore retention).7

Training can also be used to obtain more workers for Year 2000 projects. Complete Business Solutions, Inc (CBSI) from Farmington, Michigan offers a four week intensive training course to individuals who have not yet graduated. Their course covers COBOL, JCL, CICS and Year 2000 methods. This offers a career change to those with a year or two of programming courses, some logic and math and the chance to get a "foot in the door".7

AMS Training Services offers a four week Immersion Program to train people who have a college degree, but not in computer science. The Immersion Program consists of training, mentoring and actual project work. The new employee sees the commitment of the company to build their skills in the computer field. This builds employee loyalty and reduces staff turnover. The company sees technical competence built three to four times faster than by traditional methods.1

Government efforts to retain Y2K staff

The State of Texas has established a bonus system for Year 2000 critical staff. To qualify for the bonus (up to $10,000 payable on May 31, 2000 or on termination32 ), the employee must have been with their agency for at least three years and registered with the state as a critical employee by September of 1997. Justification had to be made why the employee was critical to the Year 2000 effort.27

Commonwealth of Virginia has established a bonus program for Year 2000 professionals. The bonuses are up to $10,000 for agreeing to stay with their agency through June 30, 2000. The bonuses are repayable if the employee leaves either for unsatisfactory performance or voluntarily separation. The bonuses can either be held until June 30, 2000 or distributed in two or three installments.18

Rhode Island expects key employees to leave if they reach their 28 year retirement threshold. They also expect to lose employees not heavily vested in the retirement program. They realize that commercial contract programmers can not replace lost in-house programmers on a one-for-one ratio because the in- house programmers are familiar with the applications. For each lost employee, they expect to use two contract programmers for the first three months, 1.5 contract employees for the next three months and 1 contract employee thereafter. Options they have considered include28

Year 2000 Need

Globally, the need for Year 2000 workers has not yet been felt. In Sidney, Australia, Year 2000 awareness is low and some companies are laying off IT staff. One company set up a Year 2000 factory and has not renovated enough code to pay for the employees lunches. There are variations from city to city, but so far "no shortages and no panic yet".7

Annotated Bibliography

References checked

  1. AMS Training Services, New Hire Immersion Program
  2. Benhamou, Eric, et al, Smart Valley Telecommuting Guide , pg. 2-7, 19
  3. Benhamou, Eric, et al, Smart Valley Telecommuting Pilot Project , pg. 7, 28, A7, A8, A13, A17-19, A28
  4. Boswell, Laura, Faxing over French toast - The life of a telecommuter (part 1)
  5. Boswell, Laura, Meeting over muffins - How to sell the boss on telecommuting (part 2)
  6. Callaway, Erin, COBOL Comeback
  7. Cohen, Bob, ITAA's Year 2000 Outlook
  8. Computerweekly, Bosses Despair Over Staff Poaching
  9. Delancy, Benjamin, The Year 2000 Problem: Paying the Programmers
  10. European Teleworking Organization, Is It Possible to Combine Home-Based Telework, On Site Work with Caring for a Family?
  11. European Teleworking Organization, Is There a "Right" Psychological Profile for Teleworkers?
  12. European Teleworking Organization, BT Survey of Commuters (November 1995)
  13. Franklin, Howard, Keeping the Best: Employee Retention in the '90s
  14. Goyette, Marc, Employee retention as a competitive edge
  15. Graham, Baxter, The Business Argument for Flexibility
  16. GreenSea Consulting, Strategies--Oct. '95--Employee Retention, Profitability, and Nice People--or How to Get the HR Department and the CEO to Talk to Each Other
  17. Higginbotham, Julie S., The Satisfaction Equation
  18. James, Charles E., Memorandum
  19. Kelly, Bernie and McGraw, Bruce, Successful Management in the Virtual Office
  20. Lipput, Henry, Employee Retention: A Little Flexibility Goes a Long Way Toward Keeping the Staff Intact
  21. Martin, Alice, Hoechst Celanese Study Ties Work/Family Programs to Employee Retention
  22. Nelson, Craig D., Improved Profits Through Employee Retention
  23. Netplex, Press Release: Netplex Launches Teamwork 2000
  24. NZInfoTech Weekly, Europe Lags Behind with Action Plans
  25. Object Services and Consulting, Virtual Office
  26. Positive Directions, Inc., Example Diagrams
  27. Riverman, Kim, TAMU Computing and Information Services Year 2000 Team: DIR Y2K Workgroup Meeting report June 13, 1997
  28. Road Island, Sate of, Year 2000 Preliminary Analysis, Final Report - June 30, 1997
  29. Roche, Eileen, Staffing for the Millennium
  30. Rowan, Heidelore, Dupont
  31. Shaker Advertising Agency, Research: HR News
  32. Texas, State of, Summary of Year 2000 Critical Employee Bonus Program
  33. Texas, State of, Year 2000 Legislation
  34. Texas, State of, From the General Appropriation Act For Fiscal Years 1998 and 1999
  35. Walker, Angela, The Recipe for Employee Retention: It Takes More Than Money, Say Family Business Owners
  36. Work/Family Directions, Inc, New Research by WFD Reveals That Work-Life Balance is the Key to Employee Commitment
  37. Work/Family Directions, Inc, The New Employer-Employee Compact


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Copyright (C) 1997, 1998 by Victor Fanberg. Last update 4/4/98.