Turnover of information technology professionals: the effects of internal labor market strategies

ABSTRACT

Retaining information technology (IT) professionals is important for organizations, given the challenges in sourcing for IT talent. Prior research has largely focused on understanding employee turnover from an intra-individual perspective. In this study we examine employee turnover from a structural perspective. We investigate the impact on IT turnover of organizations' Internal Labor Market (ILM) strategies. ILM strategies include human resource rules, practices, and policies including hiring and promotion criteria, job ladders, wage systems and training procedures. We collect data on ILM strategies and turnover rates for eight major IT jobs across forty-one organizations and analyze the data using confirmatory agglomerative hierarchical clustering techniques. Our results show that organizations adopt distinct ILM strategies for different IT jobs, and that these strategies relate to differential turnover rates. Specifically, technically-oriented IT jobs cluster in craft ILM strategies that are associated with higher turnover, whereas managerially-oriented IT jobs cluster in industrial ILM strategies that are associated with lower turnover. Further, depending on their contingencies of goal orientation (not-for-profit versus for-profit), IT focus (IT producer versus user), and information intensity (IT critical versus support), organizations adopt an industrial ILM strategy for their technically-oriented IT jobs to dampen turnover. Not-for-profit and IT user organizations where IT is critical adopt industrial ILM strategies for their technically-oriented IT jobs to attenuate turnover and improve the predictability of their IT workforce. IT producers and IT users where IT plays a supporting role adopt craft ILM strategies that engender higher turnover to remain timely and flexible in IT skills acquisition.

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INDEX TERMS

Primary Classification:
  K. Computing Milieux
  K.6 MANAGEMENT OF COMPUTING AND INFORMATION SYSTEMS
      K.6.1 Project and People Management

Additional Classification:
  K. Computing Milieux
  K.7 THE COMPUTING PROFESSION
      K.7.1 Occupations

Keywords:
internal labor market strategies, management of information technology workforce, recruitment and retention