All-Time Low for Employee Morale

Historically, the consequence of low morale is poor employee retention.

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Dissatisfied IT workers have nowhere to go - for now.

Much has been made of IT jobs lost to offshore outsourcing, but what about the workers who are still here? A large study of IT staffing trends shows that improving economic news has yet to translate into major hiring. At the same time, workloads haven't decreased for most IT workers; offshoring is still a relatively small phenomenon limited to a few companies. As a result, domestic IT workers are overburdened, with an attendant impact on morale, according to the Meta Group consultancy.

Meta Group surveyed 650 companies of various sizes for its "2004 IT Staffing and Compensation Guide," the sixth report in the annual series. Although 81 percent of the respondents said they were hiring this year, the new staffers were brought on largely to fill existing positions that were vacated. The total headcount for IT staff was nearly unchanged from 2003.

Morale for these workers is at an all-time low; according to feedback from employee satisfaction surveys, performance reviews, suggestion boxes and other means, 72 percent of IT organizations indicated a morale problem. The key driver for low morale is the continuing lack of job growth.

To redress low morale, 68 percent of the companies in the study took action, while 32 percent did nothing. The top two responses were employee recognition events and skill development opportunities, each cited by nearly half of the responsive companies. Other popular correctives were career development programs, annual action plans and more challenging work.

Notably missing from the morale boosters were the two actions that probably would be most effective: hiring more workers (cited by only 2 percent) or paying bonuses to existing staff (4 percent).

Historically, the consequence of low morale is poor employee retention. Yet two-thirds of the companies in the survey said retention of IT workers is not a problem - simply because the dissatisfied have nowhere else to go, opines Meta Group. When hiring picks up, however, companies that have neglected their workforce could suddenly find retention a serious issue.

Meta Group's prescription for increasing morale is to build a sophisticated "human capital management" capability (a surprising recommendation from a consultancy with no HR practice). But Meta Group cites a finding that only a quarter of the largest 2000 companies around the world employ one or more people as HR specialists for the IT organization. When it comes to caring for their IT staffers, many companies seem to have a long way to go.