IT leaders also need business acumen

Sunday Business Post - Executive Search and Selection Report - Jan 20 2008

Unhappy with a lack of clout at board level, almost half of senior technology personnel is considering a change of job, writes Dermot Corrigan

Almost half of all senior technology executives working in Ireland are considering a change of job this year. This is according to research published by British recruiter Harvey Nash, which last year moved into the Irish market with the acquisition of Dublin company Rescon IT.

Published in October, the company's ‘2007/08 Strategic Leadership Survey – A European CIO Perspective’ questioned senior IT executives and managers in Irish and European organisations.

"Over 40 per cent of CIOs (chief information officers) expect to have moved jobs in the next two years and nearly one in five (17 per cent) are already looking for a new job,” said David Burke, operations and service delivery team lead, Rescon IT. “People are not just hanging onto the job they have. They are looking for a move."

The Harvey Nash report found that the main factor influencing this trend was dissatisfaction with internal company 'culture'.

"One in two of the surveyed CIOs (48 per cent) feel IT is not well enough integrated with their business," said Burke. "A further 42 per cent doubt the ability of technology to make a positive contribution to the bottom line of their business."

Adding IT value

Burke said CIOs' strategic influence at board level is actually decreasing.

"CFOs overwhelmingly still see IT as a 'cost centre' and not as a value-adding business weapon," he said.

Stephen Brady, manager with BroadReach, said senior IT executives looking to progress their careers required a keen head for business in addition to well-honed technical skills.

"The skillset that is required for your CIO, or your IT director, is changing," said Brady. "CIOs and IT directors are required to bring greater insight to the table. Creating greater efficiencies from the organisations systems and creating better market intelligence and client communication are very important skills at the moment."

Burke said that, by concentrating purely on technology, ambitious candidates risked impeding their career progression.

"Some IT leaders are still thinking in IT terms, and not like a businessman,” he said. “IT leaders need to focus more on things like return on investment and driving efficiencies and cost savings. The IT leaders that do this successfully are the ones who progress to board level or move into the CEO role."



Sectoral Environment

According to the IDA’s End of Year Statement for 2007, a number of tech-sector multinationals established or expanded operations in Ireland last year, including Microsoft, IBM, Amazon, VMware, Novell and Vivendi.

Áine Brolly, head of executive search and selection at Penna, said continued inward investment in the IT sector in Ireland was feeding demand for senior IT executives.

"Over 300 overseas ICT (information and communications technology) companies develop, market and manufacture in Ireland and seven of the world’s top ten ICT companies have a substantial base here,” said Brolly. “This means that there is real competition for talent within the sector, particularly at the top of organisations."

Burke said demand for IT executives within some other sectors of the economy remained constant.

"Financial services is strong,” he said. “This also includes technology companies providing software and services to the financial services sector. Global organisations and large outsourcing and consulting companies also figure high on the list."

When international IT organisations establish operations in Ireland, Brolly said, the majority bring senior staff with them to head-up the operation.

"Typically they will bring a couple of top guys with them," she said. "These people will know the company culture and the way it does things. The intention will not be for those people to stay, but they will wait until the other senior managers are bedded down."

Brady said multinationals establishing or expanding Irish operations often approach executive search films to find out about the pool of executive talent available locally.

"They will look to us to map out the market in the sector they are talking about," he said.

According to Brolly, the willingness of multinational companies to offer senior positions to Irish candidates varied.

"It depends on the role,” she said. “If Microsoft come into Ireland, they will also delve into the Irish market. For a very senior commercial role in Microsoft Ireland they will want someone who appreciates the Irish market.

"However, an organisation, like say Google, who is selling all over EMEA (Europe, Middle East and Asia), and Dublin just happens to be their base - does not need to have particular executives with a knowledge of the Irish market, so it tends to recruit from overseas."

Brolly said both multinationals and local organisations are often forced to look abroad to source IT talent at managerial level.

"The market here is pretty saturated," she said. "This means recruiters must spread their nets widely to fill executive positions. Where we look depends on where the company's competitors are based. We always have to take an international view now in terms of getting the right people, whether that is America, Asia or Europe."

Skills and experience

IT candidates looking for a seat at the boardroom table need genuine leadership potential as well as technical knowledge, said Brolly.

“Larger organisations will have all the niche technical and commercial skills lower down,” she said. “At senior management level you need strong leadership, you are looking for thinkers, people who are almost mavericks, who can drive change and keep organisations at the leading edge."

Brady said demand for senior IT candidates was currently coming from a range of business types and sectors.

"Typically, your start up is going to look for a more entrepreneurial and dynamic individual, someone who is more flexible and hands-on,” he said. “With multinationals there is a type of candidate that understands that environment. The SME sector would also have its own required skillsets, such as being able to expand the business and make it more efficient."

Burke said the number of high-level IT roles available just below board level was on the rise.

"We are very busy at present up to senior programme manager levels," he said. "These roles would be strategic IT functions, but perhaps not at director or board level."

Pay and perks

Brolly said senior IT executives in Ireland typically look to international salary trends in IT to determine pay and perks, rather than general senior-level pay trends in the Irish market.

"Major technology firms coming into Ireland are not saying 'What is the market rate in Ireland?," said Brolly. "They are looking at what our major international competitors would pay for these people. We have done a lot of work educating firms here about that, and telling them 'If you want someone to take a role in Dublin, you have to pay them what they would get in California. If you are really serious you have to pay what someone would make in any global location.'"

Brolly said leading Irish IT executives were aware of the business benefits they could bring to an organisation, and expected to be rewarded accordingly.

"You have to look at what the person will add to the business," said Brolly. "If a guy wants an extra €20,000 above what you were prepared to pay, you have to think of what commercial value they are going to add. For headhunting to be successful, there has to be flexibility in terms of the package."

For senior IT executives, Burke said the package of benefits on offer is, in most cases, as important as base salary.

"A strong factor at this level will be the benefits which will include strong bonus opportunity, car allowance or car, possible share options as well as the usual benefits,” he said. “This can add about 30 per cent to base salaries and is often the deciding factor in the overall suitability of the final offer."

Brady said senior IT candidates tend to expect substantial bonuses.

"Because the IT function can have a greater impact on profitability, we are seeing more IT directors and CIOs remunerated on a profit-based bonus scheme," he said. "That may have been the domain of the CEO or sales director, but nowadays if the IT guys are effecting profit margins by making improvements and efficiencies they are in line for a share of those profits."

Burke said salaries at just below board level were continuing to rise ahead of inflation.

"At programme manager level we are seeing an increase in base salaries," said Burke. "They are now firmly in the 80-100k base mark, which would be an average increase of roughly ten per cent last year.”