Increased emphasis on transparency among IT companies, and the resultant shift toward quarterly financial reporting, is adversely affecting job retention in the industry.
Delivering results to the market every three months places enormous pressure on management to deliver increased revenues, but the real strain rests on sales teams which are pressed to close deals and strengthen the bottom line. The obvious focus of shareholders and potential investors is on improved earnings quarter by quarter.
SA`s IT industry is coming perilously close to spawning a generation of sales underachievers, and needs to address the root of the problem.
Jill Hamlyn, MD, The People Business
But the sales pipeline needs to be filled first. New sales recruits need to be trained to cope with the pressures of a more frequent reporting ethos within a company. But management and the market alike must be prepared to wait out an initially lean period.
The sales process needs to be nurtured through the first six months that are critical to building a solid relationship, conducive to sustainable future business dealings. If the proper procedures are not followed, employees tend to panic and skip out crucial steps in the sales process with the result that the deal falls through. With the high cost of IT systems and service, the tight reign on capital expenditure and strong focus on return on investment, companies are simply not prepared to rush acquisitions.
Dilemma
While deals are being fostered through the critical trust building phase, which traditionally falls in the first year of a business relationship, sales people should be backed with support and training which will pay dividends once the sales momentum gathers speed. IT companies are now facing the dilemma of high sales staff turnover as salespeople leave in droves in anticipation of below-par performances within the first two quarters of the financial year.
The effect of this staff churn is that the industry is robbing itself of the opportunity to breed successful, motivated sales people. SA`s IT industry is coming perilously close to spawning a generation of sales underachievers, and needs to address the root of the problem.
The sales force is acutely aware of targets and more often than not they tend to resign - before they are pushed - if they feel they won`t meet quarterly forecasts. They move on to the next job to tackle a fresh set of targets and expectations with the same pressures they have just left behind.
The net result is that the process simply repeats itself. New people then need to be recruited, which in itself is a costly and time-consuming business, and the sales process effectively has to start from scratch. This leaves the door open for competitors with established sales teams to swoop in and capitalise on the hard pre-sales work done. Management needs to realise that if staff leave midway through the sales cycle they are not adding value and that is a situation which needs to change.
However, once orders start flowing through the pipeline, quarterly targets become less of an issue. But in the meanwhile, companies need to hold on to staff if they are to get away from the "one step forward, two steps back" position in which they currently find themselves.
Pressures
What I believe should be advocated is not an avoidance of quarterly performance responsibilities, which are almost compulsory for subsidiaries of foreign-owned IT firms, but a recognition of the ebb and flow of the sales process. Long-term staff retention can then be achieved by recruiting the right staff up-front and communicating the pressures of the sales cycle to employees at the outset.
IT companies have to realise their competitive-edge rests on their ability to take products to the market through people. This is indeed the route for companies to take if they are to capitalise on their human capital.
The ability of companies to perform optimally starts with proper profiling and recruiting. It must then be followed up with a coherent mentoring strategy which allows employees to grow beyond the original demands of their initial key performance objectives and targets. This should be integrated with an approachable, user-friendly human resources strategy, a strong internal communication programme and a results-driven management focus that does not overlook the human element of management-employee interaction.
Only when companies start embracing an integrated people-driven operating philosophy will they manage to achieve goals on a consistent basis.
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