• Personnel with legacy skills may be costing too much for the skills that they provide. Employees with new and different skill sets might provide more value.
• Build compensation based on bonuses and base pay. Keep entitlements to a minimum because the cost can be hard to control.
• Companies can offer partial or full reimbursement for approved training but should stipulate repayment if the employee doesn’t stay with the company for a certain period of time after the training is complete.
Making the most of your personnel budget is not easy in a time of economic uncertainty. Layoffs are prevalent, and hiring is challenging. Industry experts agree that the best way to stretch your personnel dollars in the data center is to assess the human resources already in place and make changes in workloads, compensation, and training.
Focus On Skills, Not Numbers
Many experts believe that the best way to cut personnel costs is to eliminate personnel wherever possible through a combination of virtualization, outsourcing, and squeezing efficiencies out of legacy and new technology in the data center. However, simply getting rid of employees is not always the answer; instead, any staff reduction should look at skills rather than just head count.
“The first step is to conduct a skills assessment,” says Rob Enderle, principal analyst for the Enderle Group. “What skills do you need and what skills do you have? How many of those can be virtual employees? That will give you a starting framework.”
Steve Yellen, vice president of marketing and product development at Aperture (www.aperture.com), recommends outsourcing “busywork” as much as possible so that data center employees can solve problems and perform other valuable tasks rather than getting caught up in minutiae. “Now that everything is connected, problems can be solved quicker, but sometimes people don’t understand the value of basic blocking and tackling,” Yellen says.
“The bottom line is that you are always going to have to have people,” says Sean Morris, director of sales for Digitech Systems (www.digitech.com). “You have to look at whether it is better to cut someone or to change their focus.” Morris adds that the data center should have the employees focus on core competencies and use managed services for any needs outside of those core competencies.
“Today, it is a question of the retention of the right type of personnel,” adds Blase Salvatore, president of Mercadien Technologies, a division of the Mercadien Group (www.mercadien.com). Although the recent economic downturn and consolidations in many data centers have made it a buyers’ market for employers, people with some specialized skills and data center technicians who possess certain combinations of skills are still very difficult to find. “You need to be able to hire the right people at the right price,” Salvatore says.
Similarly, the people retained in any right-sizing must be the right people with the right set of skills. “Maintenance is massively affected by legacy personnel who are used to big, cumbersome legacy systems,” said Brian Gentile, CEO of Jaspersoft (www.jaspersoft.com). “Part of those maintenance costs should be going toward weeding out personnel or updating personnel to those who can handle the next couple of decades of systems, which are very agile and lightweight. So the question management needs to start asking is not ‘Are we spending too much on people?’ It’s ‘Are we spending enough on the right kind of people?’”
Employee compensation is a tricky topic to navigate, but experts agree that there are areas to improve upon when it comes to budgeting for compensation. For example, your current staff might be overpaid due to agreements made when workers were much harder to find, says David Foote, CEO and co-founder of Foote Partners.
Even when hiring new employees, companies tend to overpay because they rely too much on salary surveys to determine compensation levels, according to Foote: “Companies look at salary surveys and try to match them to titles, but salary surveys are deeply flawed. The titles don’t match what the people actually do.”
According to Foote, the data center can better control its personnel costs, as well as the value it derives from its staff, by paying less in annual base pay and more for specific skills. “It’s very difficult to reduce salaries. It’s much easier to reduce variable compensation,” he says. The data center might also offer additional compensation for specific projects.
Skills tend to be more valuable than certifications, Foote continues. The pay for certifications has gone down and the pay for noncertified skills has gone up in the past three years. “The value of skills changes every year,” Foote says. “Companies that roll skills into salary tend to overpay. Skills are more dynamic than salaries.”
Although Foote says that it is difficult to move an employee from a high salary to a more incentive-based payment plan, Salvatore says installing such a plan will quickly uncover the employees who are complacent and those who provide real value to the data center. In addition to certifications, Salvatore recommends including performance incentives for uptime and customer satisfaction, because both are measures of the employee’s actual value to the data center.
John Challenger, CEO of Challenger, Gray & Christmas, adds that the monetary compensation can be controlled more easily than benefits, such as health care, because the company has little input in premium increases, so he recommends keeping benefits low as a percentage of total compensation.
“You need to keep entitlements down because they can be difficult to get rid of,” Enderle agreed.
Use Training Incentives Wisely
Training can be another significant personnel expense, but it’s one that can be controlled using a couple of different strategies.
Enderle recommends reimbursing your employees for approved training. Other recommendations include providing partial reimbursement for training, with stipulations that reimbursements must be repaid if an employee leaves the data center before a certain amount of time.
However, Salavatore says that companies shouldn’t depend on training to make up for any deficiencies a worker has when initially hired but to help the employee and data center benefit from additional skills.
by Phil Britt
Top Tip: Use Third-Party Recruiting Services Wisely |
After assessing their current personnel and skill sets, data center admins may find that they need to add personnel. However, in many companies, human resources operations have been reduced in response to the recession, so admins may need to rely on third-party headhunters, particularly if they are looking for certain skill sets or specialties.
But even when using a third party for recruiting and hiring, the data center should do its own background check on any potential hires, advises Rob Enderle, principle analyst for the Enderle Group. He adds that the data center should also conduct due diligence on any hiring firm by investigating the success previous placements have had.