IT project management capabilities enhancement in contingent employment context
This paper summarises the doctoral research of the author. As an IT project management veteran, the researcher has great concern on how organisations can retain knowledge and experience generated from IT projects when there is increasing contingent employment reliance in the practice of IT projects. This may cause knowledge drainage, prohibit organisational learning, adversely affect the IT project management capabilities of organisations and thus risk the survival of organisations in the competition. The situation was analysed through a qualitative research with three in-depth case studies carried out in Hong Kong. This research contributed to fill the knowledge gap that there was limited referential research undertaken on IT project management capability enhancement using contingent employment. The researcher integrated three core themes (IT project management, contingent employment, and enhancement of IT project management capabilities) and suggested reference models of enhancing IT project management capabilities under contingent employment context. It was concluded that an organisation will be more projectised in structure and invest more on project governance and support structures, project management methodologies, and tools as it employs more contingent workers on IT projects while enhancing its project management capability.
Keywords: case study, IT project management, contingent employment, enhancing IT project management capabilities, large organisation, organisational learning, Hong Kong
This paper is extracted from the author's doctoral thesis (Ng, 2012) “Exploring contingent employment policy in IT — impacts upon IT project management capabilities enhancement in large Hong Kong organisations”. The researcher is a project management veteran in the Hong Kong information technology (IT) sector and observed that the IT projects have increasingly employed contingent workers to deliver IT projects. She tried to find an answer to the question from DeFillippi and Arthur (1998, p. 125) “How can a project-based enterprise accumulate its core competencies when it rents all the human capital?” From the outcome of the literature survey, it was found that there was limited referential research undertaken on IT project management capability enhancement through the use of contingent employment even though there were numerous studies on the themes—IT project management, contingent employment, and enhancing IT project management capabilities. The link joining these themes is missing. Based on this background, the author commenced the research.
The scope of the research is to explore how the contingent employment policy of IT impacts upon IT project management capabilities enhancement in large Hong Kong organisations. In this paper, information technology (IT) “encompasses methods and techniques used in information handling, transmission and retrieval by automatic means, including computing, telecommunication (voice, data and video transmission by digital or analogue means), office automation and industrial automation”; IT project management capability is defined as the “ability to perform IT project management actions”; contingent employment is “a category of the workforce that includes those who do not have explicit or implicit contracts to stay with an organisation for an indefinite period of time”; and a large Hong Kong organisation is defined as “any manufacturing businesses which employs 100 or more persons in Hong Kong; or any non-manufacturing businesses that employs 50 or more persons in Hong Kong.”
Hong Kong IT Context
Hong Kong, being a vibrant city, wants to become a knowledge-based economy (CENSTATD, 2011a), its IT industry is playing a significant role. The value added of the Hong Kong IT sector has grown 99 percent in the decade between 1998 (HK$39.5 billion) and 2008 (HK$78.3 billion) (CENSTATD, 2007, 2009, 2011b), and its speed of growth was more than three times that of the overall gross domestic product (GDP). It is a relatively small industrial sector in Hong Kong (only employs 3.3 percent of the total employment (CENSTATD, 2011b) but it is an important one. In the high technology industry, knowledge is doubling every 7 to 10 years and all professionals have to practise never-ending learning (McLean, 2006). Specifically, project management skills are in demand (Sullivan, 2008) when more technology organisations move toward a projectised organisation structure (Devine, 2011). In such context, a Hong Kong Chief Information Officer (CIO) leading an IT group and delivering IT projects for organisational success, has advocated that “Cost pressure - less for more” (Gartner, 2012; Hammond, 2011; Computerworld, 2009) and “Never-ending workforce skill shortage” (Chan, 2009; Computerworld, 2012; Wan, 2012) are the two constant challenges over time.
To satisfy the growing expectation on IT and IT projects while facing the cost and skill challenges, Hong Kong CIOs have utilised various strategies. Increasing the use of contingent IT workers is supposed to be one of the solutions. It is a feasible solution because organisations can acquire the skills on demand by hiring contingent workers (including project managers) for a specific period without committing to long-term employment that normally comes with benefits or training expenditures (Allan & Sienko, 1998; Barley & Kunda, 2004). Hiring contingent IT workers through agencies is common in Hong Kong. In addition to in-sourcing contingent workers, Hong Kong CIOs also adopt three contemporary strategies: outsourcing, integration with the Mainland China IT industry, and cloud computing to tackle their challenges. Essentially, the solutions are to obtain cost effective and flexible IT capabilities externally under skill shortage and cost pressure. Factually, recent reports reveal that the demand for IT contingent or temporary workers is expected to outpace permanent employment (eWeek, 2007), and contingent or temporary employment may grow three times as fast as total employment over the next decade (Newswire, 2007). There is a lack of official data about Hong Kong IT's contingent employment growth. However, it is likely to follow this trend when facing the global competition. The available data come from the Hong Kong Special Administrative Region (HK SAR) Government, which has taken the lead to encourage contingent employment for government bureaux and departments in the IT arena. Roughly 47 percent and 56 percent of the government IT workforce were under the Office of the Government Chief Information Officer (OGCIO), which arranged T-contract (a form of body-shopping contract) (OGCIO, 2011) contingent employment in 2008 and 2012, respectively. Data of private enterprises were unavailable, but observations of the researcher and IT veterans interviewed in the research told that there was an increasing contingent employment trend. IT projects account for 50 percent to 80 percent of the total workforce, as contingent IT workers are not uncommon.
“The winners in the post-recovery world will be the companies that leverage contingent workers as workforce accelerators, having mastered the art of managing a flexible mix of permanent and contingent workers to optimise their performance, increasing their speed of execution, building talent capability, keeping fixed costs low and doing more with less” said Lancy Chui, General Manager of Manpower Hong Kong and Macau Operations (CTHR, 2009, p. 1).
The 2008 financial crisis and 2009 European debt crisis gave a further impetus to the contingent employment trend in Hong Kong. However, it also means that IT is an even more organisational success strategic driver for economic recovery (Peterson, 2010; Computerworld, 2009). Nevertheless, IT projects have a relatively higher failure rate (Flinders, 2011; Hall, Beecham, Verner, & Wilson, 2008; Lemon, Bowitz, Burn, & Hackney, 2002; Lientz & Rea, 2001; The Standish Group, 1995, 2009; Whitfield, 2007) compared to long-established industrial sectors such as construction (Kwak, 2003). The theme - “IT project management” has caught the attention of many scholars and practitioners. Research has been conducted to identify characteristics of IT projects (Cooke-Davies, 2002; Lientz & Rea, 2001; Linde & Linderoh, 2006; McLean, 2006; Sauer & Reich, 2009; Trauth, Reinert, & Zigner, 2007) to find ways to have more successful IT projects (Kendra & Taplan, 2004; Sauer, Liu, & Johnston, 2001; Sauer & Reich, 2009) and enhance project management capabilities (Ellsworth, 2009; von Wangenehim, Silva, Buglione, Scheidt, & Prikladnicki, 2010; International Standards Organization, 2008; Julian, 2008; Kerzner, 2005; Levinson, 2010; Project Management Institute, 2008b; Rad & Levin, 2002; SEI, 2010; Williams, 2009).
Under the theme - ‘contingent employment’, it is noted that more IT works are being delivered as projects that have definite beginnings and ends and also the nature of continual technological change in the IT sector suggests a good resourcing fit by using contingent employment policy (Barley & Kunda, 2004; Bidwell, 2009; Devine, 2011; Gregory, 2001; Holland, Hecker, & Steen, 2002). Moreover, there appears to be no end to the contingent employment trend in IT. Literature surveys on contemporary research about contingent employment (not limited to IT industry) show that scholars and practitioners (Barley & Kunda, 2006; Benner, 2002; HR Focus, 2006; Gregory, 2001; Hatton, 2011; Kallenberg, 2001; Matusik & Hill, 1998; Redpath, Hurst, & Devine, 2007) agree the trend of widespread use of contingent employment will continue although there are advantages and disadvantages of contingent employment (Allan & Sienko, 1998; Barley & Kunda, 2004; Chaturvedi, 2010; HR Focus, 2006; Gregory, 2001; Hall et al., 2008; Labovitz, 2005; Lepak, Takeuchi, & Snell, 2003; MacDougall & Hurst, 2005; Matusik & Hill, 1998; Peel & Inkson, 2004; Redpath et al., 2007). Scholars are seeking ways to ensure the success of contingent employment resource strategies (Chaturvedi, 2010; CTHR, 2009; Goldsmith, 2007; Lepak et al., 2003; MacDougall & Hurst, 2005; Redpath et al., 2007) because the trend in this human resource strategy adoption seems irreversible.
Regarding ‘enhancing IT project management capabilities’, in order to deliver successful projects to organisations, including IT projects, the project management capabilities of both the project participants (especially the project managers) (Barley & Kunda, 2004; Brandel, 2010; Hall & Kahn, 2002; Huemann, Keegan, & Turner, 2007; Kendra & Taplan, 2004; Ladika, 2008; Loogma, Umarik, & Vilu, 2004; Peel & Inkson, 2004; Pinto, 1999) and the organisations (Crossan, Lane, & White, 1999; DeFillippi, 2002; Järvinen & Poikela, 2006; Julian, 2008; Lampel, Scarbrough, & Macmillan, 2008; Prencipe & Tell, 2001) are essential. The ability to learn and enhance individual and organisational capabilities determines success and failure of projects. Numerous studies regarding individual learning, competence enhancement and developing project manager career paths have been reported upon (Baccarini, 2006; Brandel, 2010; Ensworth, 2001; Huemann et al., 2007; Keegan & Turner, 2003; Ladika, 2008; Sullivan, 2004). Individual project management capability learning includes formal (Dulaimi, 2005; HKITPC, 2009; International Project Management Association, 2012; Nerland & Jensen, 2007; Office of Government Commerce, 2002; Project Management Institute, 2008a; Robb, 2007) and informal paths (Barley & Kunda, 2004; Benner, 2002; Day, 1998; Hall & Kahn, 2002; Kerzner, 2009; Loogma et al., 2004; Peel & Inkson, 2004; Rad & Levin, 2002; Sauve, 2007). In the context of organisational learning, there are a number of three-level learning models. That is learning at individual, group or team, and organisation levels (Crossan et al., 1999; Järvinen & Poikela, 2006; Prencipe & Tell, 2001). However, in the context of IT project management that demands people management skills and utilises a dynamic workforce (Holland et al., 2002; Nerland & Jensen, 2007; J. Sullivan, 2004) such as contingent workers, insights from research in knowledge areas such as social capital (Bredin, 2008; Chi, Chan, Seow, & Tam, 2009; DeFillippi & Arthur, 1998; Ellison, Steinfield, & Lampe, 2006; Lave & Wenger, 1991; Lesser, Fontaine, & Slusher, 2000; Nahapiet & Ghoshal, 1998; Rad & Levin, 2002; Sauve, 2007; Walker & Christenson, 2005) and organisational learning models beyond organisational boundaries (Arthur, DeFillippi, & Jones, 2001; Hedlund, 1994) seem to be applicable as well.
The research has conducted a comprehensive literature survey around three core themes: IT project management, contingent employment, and enhancing IT project management capabilities. This paper highlights the key references studies without going into too much detail.
Ontology of the Research
The ontology of the research is from the experience and background of the researcher with reference to literature and consultation of practitioners in the context of the research. The idea of this research came from the researcher's personal experience working on complex IT projects in Hong Kong for large organisations. It was observed that large Hong Kong organisations had increasingly utilised contingent IT workers to deliver IT projects. In a few multi-year and multi-million-USD IT projects led by the researcher as project manager or project director between the years 2000 and 2007, the percentage of contingent workers increased from below 40 percent to over 80 percent of the overall project team size. Eventually, even some IT project managers were under contingent employment.
The author has great concern on how organisations can retain knowledge and experience generated from IT projects. How can organisations avoid similar mistakes and increase the new projects’ success rate when a significant percentage of the project workforce is mobile and leave the organisation after project completion? It is more difficult for an individual contingent IT professional without the support and investment from an employer than an IT employee to climb the project management career ladder to become a competent project manager. In the researcher's experience, a significant portion of the project manager's time was spent on managing contingent workers’ hiring, orientation, setting expectations, monitoring job performance, aligning work consistence, transiting work from one contingent worker to another or firing non-performers. These are some of the author's observations: project mistakes were repeated within the same organisation because many project team members (including the project manager) were new to the organisation; contingent IT professionals repeatedly continue to perform the same role (such as systems analyst or developer) in new projects without job level promotions; and the career advancement of generation-Y IT workers seemed to be slower than the generation-X ones.
Furthermore, the author's previous master research thesis was on “The Role of Experiential Learning in Developing Information Technology Project Management Capabilities in a Large Organisation” (Ng, 2008). It was an Australian case study; one of the research findings was that the case study organisation had a policy of hiring trained, experienced IT project managers on an individual contract basis to run its IT projects. Such policy was suspected to contribute to the risk of knowledge drainage and prohibited learning in the case study organisation by the case study participants. In summary, therefore, the combination of personal experience, observations and research findings raised the interest of the author to further study this arena.
Employing contingent policy on IT projects seems to have an adverse impact on project management capabilities enhancement. However, the increasing trend of contingent employment on IT projects shows that such policy should contribute to some favourable outcomes to the employing organisations and/or individual practitioners. The research therefore explores the impacts from a learning and capability enhancement perspective. It began with the proposition that:
Contingent employment policy has an adverse impact on individual and organisation learning and causes a decrease in IT project management capabilities in large Hong Kong organisations.
The research objectives have been to (1) explore the importance of continuous advancement of IT project management capabilities to business successes; (2) identify and explain the contingent and permanent employment policies of IT professionals (including project managers) in large Hong Kong organisations; (3) investigate and explain the impacts of contingent employment policies on enhancing IT project management capabilities; (4) identify and explain the practices of advancing IT project management capabilities as an individual, as a group and as a large organisation; and (5) identify and present possible solutions to satisfy the needs to advance IT project management capabilities using contingent employment.
Knowledge Claim Approach
The problem being researched is a human problem in relation to how individuals or groups of individuals forming organisations learn project management capabilities. This research is to “explore” the knowledge area about enhancing IT project management capabilities in a contingent employment context. Ultimately, “the researcher builds a complex, holistic picture, analyses words, reports detailed views of informants, and conducts the study in a natural setting” (Creswell, 1998, p. 15). The research design of this work was planned following Creswell's (2003 Figure 1.1) framework for design. It consists of “three framework elements: philosophical assumptions about what constitutes knowledge claims; general procedures of research called strategies of inquiry; and detailed procedures of data collection, analysis and writing, called methods” (p. 3). The research follows the constructivist assumption to claim knowledge. The strategy of inquiry was the case study taking the multiple-case, comparative design. The research method mainly relied on open-end interviews supported by semi-structured interviews and triangulations using documentation and archival records. It took the qualitative approach.
Multiple-case Comparative Design
Three case studies were conducted in this research. It is a “multiple-case design” of Yin (2003) or “collective case study” as defined by Denzin and Lincoln (1994). The three case study organisations are typical large organisations who are major employers of the Hong Kong IT workforce. The majority of the Hong Kong IT employees (68%) are employed by a small number of companies (7.8%) that employ more than 50 employees (VTC, 2010, Figure 8) ; and the “IT users organisations” and the “IT and communications services organisations” are the two key categories of employers (Vocational Training Council, 2010). All three case study organisations satisfy the “large Hong Kong organisation” definition.
This research used a purposive sampling strategy (Green, 2002), and the cases selected were ordinary cases (Creswell, 1998) but representative ones. All case study organisations are typical large employers of Hong Kong IT staff. However, the three cases selected are significantly different such that cross-case comparisons (Denzin & Lincoln, 1994; Miles & Huberman, 1994; Yin, 2003) can be made. The first case study organisation (refers to as C1-PB) is from the public sector; it is a typical “IT users organisation.” The second case study organisation (refers to as C2-VD) is an international IT service provider, a typical “IT and communications services organisation.” These two organisations represent the two categories of Hong Kong employers (Vocational Training Council, 2010). More than 50 percent of the IT workforce in the IT group/department under study in both organisations was contingently employed when the research interviews were conducted between mid-2009 and early 2010. They were invited to participate in the research through the researcher's personal network. The third case study organisation (refers to as C3-FI) is from the finance sector. It is a typical end-user organisation and is a representative organisation that employs a low percentage (less than 20 percent) of its IT workforce in contingent employment terms. The researcher was introduced to the CIO of this organisation through a local professional project management association and had no prior knowledge of this case.
The targeted participants were IT departments or the IT groups’ managers, human resources managers, training mangers, knowledge management leaders, project management office (PMO) managers, IT project managers (including permanent employees and contingent employees), and/or IT project leaders (including permanent employees and contingent employees). It is a purposive sampling method (Green, 2002). Having a list of potential participants more than the actual number of participants serves the purpose to let all the participants remain anonymous and keep the identity of each participant confidential. Each case study organisation was expected to have six to eight participants. At the end, all three case study organisations had six participants (referred to as Cn.X with X as Participant A, B, C, D, E or F from case study Cn where n is 1, 2, or 3).
The author conducted the interviews in multiple batches. With theoretical sampling as the data collection method, the previous interviews’ data affect the subsequent interviews’ participant selection and the data collection questions. “Theoretical sampling is especially important when studying new or unchartered areas [such as this research] because it allows for discovery”(Corbin, 2008, p. 145). When all the individual case study's analysis was finished, cross case comparison of the three case studies was conducted. Limited to length of this paper, the details of the three case studies are excluded. The next section presents the comparative analysis outcomes.
Comparative Analysis of Three Case Studies
The Three Case Studies
The first case study organisation, C1-PB, employed about 8,000 employees, of which almost 400 of them were IT staff under the IT department. C1-PB has been established for over three decades in Hong Kong with the vision to help low income families. The corporate mission has been to provide high quality services to customers in a proactive and caring manner ensuring cost-effective and rational use of public resources in service delivery. In order to support the mission, C1-PB gradually changed its human resource strategy so as to increase its flexibility in staff employment and deployment. It moved from hiring civil servants (early 1970s to late 1980s) to direct contract staff (late 1980s to late 2000s) and then to engaging services from the private sector through outsourcing and procurement of body-shopped services (from 2007 onwards). The IT group supported the corporate mission and also experienced growing demands in the last decade. C1-PB has also mapped out the long-term information strategy to make greater use of IT in the 2000s. A series of priority IT projects was planned and implemented to replace old systems and facilitate new business initiatives. By 2009, C1-PB has entered into the web-based information processing technology era after completing the replacement of all legacy mainframe applications. C1-PB keeps working on the IT strategy of the next decade, and there is demand for continuous IT project management capability improvement.
The second case study organisation, C2-VD, employed almost 1,000 employees in Hong Kong, and the IT group under study (the IT services business unit) had about 200 IT staff. C2-VD's parent company has over 50 years of history and is one of the largest IT product and services providers globally. C2-VD has been established in Hong Kong for over 30 years from the late 1970s. By late 2009, it had seven major business segments following the global organisation structure including IT product focused, services focused, financial services and the corporate investment segments. The IT services business unit under study is one of the local business units under the services segment. The IT services business unit help clients revitalise and manage their IT assets through flexible, project-based, consulting services and longer-term outsourcing contracts. C2-VD's parent company has faced vigorous market competition and price pressure on its products and services in the past decade. In the same period, two major merger and acquisitions happened. The IT services business unit has therefore gone through changes driven by both the external market situation and the internal organisational and workforce restructuring. Its success relies heavily on its project management capabilities to win and deliver price competitive customer projects.
The third case study organisation, C3-FI employed almost 2,000 employees with over 100 IT staff in its IT department. C3-FI has been established in Hong Kong for almost one century. It was used to be a Chinese-owned local financial institution until the early 1990s; it was merged into an international financial institution.
In 2006, C3-FI was acquired by a large China-based financial institution. The parent company, after acquiring C3-FI aggressively, grew the Hong Kong business to get into the international finance market. By the time the research interviews were conducted, it was fewer than three years from the acquisition date and its number of branches had already close to tripled from the acquisition time. C3-FI has experienced its historic organisational expansion and there is huge demand on IT resources. IT projects thus changed from small scale to large, complex ones. It demanded for more serious project management especially after the historic large project - the core financial institution application upgrade project, was commenced around 2008. The Programme Management Office (PgMO) was therefore established in early 2009.
C1-PB and C2-VD are representative organisations hiring high percentage (greater than or equal to 50 percent) of contingent IT workforce. Between the two, C2-VD has higher contingent employment percentage (75 percent) than that of C1-PB (50 percent). C3-FI is a representative organisation that employs a low percentage (less than 20 percent) of its IT workforce in contingent employment terms. These organisations are all large Hong Kong organisations and major employers of the IT workforce. They are from different industry sectors with different organisational challenges. Nevertheless, they all rely on more effective IT project management capabilities to ensure their business success while facing the dynamic demand for IT resources to fulfill their fluctuating IT project workload. They have gone through their own changing business progressions and developed their IT groups’ project management practices and resource strategies. Contingent employment resource strategy is a common strategy in C1-PB and C2-VD, while C3-FI has made a different choice.
These three organisations have different business imperatives, but there are similarities and differences in their organisation characteristics including their business and organisational structure, project resource strategy, and investment on project management capabilities. Table 1 summarises the comparative analysis findings across the three cases from low reliance (C3-FI) to very high reliance (C2-VD) on contingent employment to deliver IT projects.
Business and Organisational Structure
C1-PB, C2-VD, and C3-FI, have their own business imperatives that demand improvement in IT project management capabilities to ensure project and business success. C1-PB serves the low-income families of Hong Kong. Its IT projects support C1-PB's business imperative as it seeks to achieve the public policy objectives in the relevant area and improve operational efficiency. It employs a balanced matrix structure (PMI, 2008a, Figure 2-9) in its IT group. It's IT group included three teams aligned with business function, two teams organised by projects (“mega project” and “application development” teams) and two teams providing organisation-wide services (including the PMO function). From C2-VD's perspective, as an IT vendor, the core business of the IT service business unit under study is delivering client IT projects. IT project management capability is its core competence to win opportunities in the vigorous market competition. Its IT services business unit is the most projectised one (Project Management Institute, 2008a, Figure 2-11) among the three case studies. This business unit has two pools of resources. One pool takes care of pre-sales activities, and the other is responsible for all project delivery. The second pool is a large pool including all the contingent workers. On top of these two pools, there is a small business operation team in this business unit. The roles of the business operation team include finance management, resource management (RM), knowledge management (KM), quality management, and project pre-sales and delivery assurance. In C3-FI's case, the business focus has been growing its business in the Hong Kong financial industry after it was acquired by a China-based financial institution in 2006. The IT projects should support both the growth and operational efficiency business imperatives. It organises its IT group in a functional structure (Project Management Institute, 2008a, Figure 2-7). The IT group teams, except the programme management office (PgMO), are aligned with the business functions. Each team runs its own production operations and IT projects.
Project Management Office (PMO) Function
All three case study organisations have a form of PMO (or PgMO) structure within the organisation. The common roles of PMO have been project governance, project management process compliance assurance, and capability development. However, C1-PB's PMO had a much longer history and more complex functions than the one-year-old PgMO of C3-FI when the research interviews were conducted. Nevertheless, in both cases, the PMOs are part of the IT group and assist the CIOs on portfolio management. They help to prioritise and manage IT project investments. For C2-VD, the local PMO is not part of the IT group under study. Both the local PMO and IT group under study report to the same corporate business segment heads. The local PMO's roles are similar to those of C1-PB and C3-FI except that it does not have the portfolio management function. None of the three PMOs have the project resource management role. They are not directly involve in hiring of permanent or contingent IT workers. PMOs of C1-PB and C3-FI have influencing power by advising the CIOs on the resource strategy. For the C2-VD IT group, it has a resource manager under the business operation team. She takes care of the hiring, firing, contracting and mobilisation of contingent IT workers among projects.
Table 1 – Organisational IT project management learning model from comparative analysis
|Business and organisational structure|
|Business sector and imperatives||Finance sector (business growth and operation efficiency)||Public sector (achieving public policy objectives and operation efficiency)||IT sector (successful client business / projects and operation efficiency)|
|IT group organisation structure||Functional||Balanced Matrix||Projectised|
|Project resource strategy|
|Reliance on contingent workers||Low (< 20%)||High (50%)||Very high (75%)|
|Attitude toward contingent employment||Not a preference||Short-term resource strategy||Part of the project resource strategy|
|Contingent employment impacts on the organisation||Common positive impacts: flexibility, acquiring skills, flow of knowledge, headcount, and screening.|
|Common negative impacts: knowledge drainage, management of contingent workers, and attitude and quality concerns.|
|Demand for external IT skills||Experts with business domain knowledge and vendor solutions||Generic technical IT professionals with government process knowledge||Experts and generic technical IT professionals|
|Resource strategies||Retaining core in-house; co-sourcing; outsourcing; in-sourcing contingent workers; and adding headcount.||Retaining core in-house; outsourcing; in-sourcing contingent employment; and in-sourcing from China.||Retaining core in-house; outsourcing; in-sourcing contingent employment; off-shoring; and in-sourcing from China, overseas and corporate.|
|Investments on project management capabilities|
|Project governance and support structure||PgMO, CQA||PMO, TA team||PMO, business operation team, people manager|
|Project management methodology and tools||Semi-structural (PPM)||Structural (CMMI, project portal)||Structural and complex (corporate methodology, local ISO, corporate KM, and others)|
|Project management learning||Cognitive learning and operational learning focus|
Project Resource Strategy
The “Project Resource Strategy” section of Table 1 summarise the project resource practices of the three case study organisations. All the three case study organisations have demands for an IT workforce to support the fluctuating IT project demands and market dynamics; however, they have different attitude towards contingent employment on IT projects. C2-VD identifies contingent employment as part of their resource strategy. C1-PB's view is more for resolving short-term demands; it takes contingent employment as a short-term resource strategy. In contrast, C3-FI sees it is not a preferred solution. Nevertheless, in order to retain the project management capability, they all utilise their in-house employees to retain core knowledge. Despite the differences, they share the views on how contingent employment affects the organisations. They all gain the positive impacts (see Table 1 – common positive impacts). The positive impacts include providing human resources flexibility, acquiring skills in need, allowing flow of knowledge in and out of organisation, overcoming headcount constraints, and screening capable candidates prior hiring them as permanent staff. Nevertheless, they are also well aware of negative impacts (see Table 1 - common negative impacts) and have spent the time and effort to reduce such impacts. There is potential knowledge drainage as contingent workers leaving the organisation, extra effort required in managing contingent workers, un-ideal attitudes and quality concerns. The following paragraphs describe how they reduce the negative impacts and maximize the positive impacts through their project resource strategy.
The very high reliance on contingent employment in C2-VD to retain its competitiveness is part of the project resource strategy. It demands all sorts of external skills depending on the customer projects it wins. It looks for a broad range of skills ranging from IT programming capabilities, technical skills to domain expertise. In addition to utilising a very high percentage of in-sourcing local contingent workers, C2-VD also employs strategies of “outsourcing” whole or part of the projects to sub-contractors, ‘off-shoring’ certain work to low cost countries such as China and India, and ‘in-sourcing’ some temporary workforce from the Mainland China. It also utilises overseas and corporate experts beyond C2-VD's boundary to fill skill gaps that are not available locally. Capability to source the right skills at the right time is essential to C2-VD's success. At the project level, it has a relative complex resource model. Every project team is a three-tier structure with a combination of Tier One staff - internal staff (including permanent and direct contract staff); Tier Two staff - stable extended workforce (from human resources agencies) and Tier Three staff - newly hired external workers (including workers from human resources agencies, sub-contractors, partners, and offshore or overseas resources). Tier One staff take senior positions of client IT projects and own all finance-related tasks. Tier Two staff are long-term stable contingent workers who are able to diffuse the project management and organisational knowledge to those temporary Tier Three staff who basically contribute their skills to the projects and learn the organisational knowledge on the job.
The situation of high reliance on contingent employment in C1-PB is different from C2-VD. It is a public organisation. External resources cannot develop business domain knowledge unless they have worked for C1-PB before. The external resources required are mainly those with generic IT technical skills and government project experience. Knowledge of government processes and technologies required are essential assets. C1-PB acquired such resources through body-shopping contracts. Such employment was meant for short-term oriented projects. In order to retain project knowledge, C1-PB relies on the civil servants and direct contract staff. As a new project team is assembled, in-house staff supporting the existing systems or to-be-replaced systems will be selected to join the new project team; existing work will be performed by contingent workers. Alternatively, if the new project demands skills that do not exist in C1-PB, contingent workers with the right skill and experience will be hired to join the new project team. In-house staff will pick up the new skills from the contingent workers who will be dismissed at the end of the project. On top of in-sourcing these contingent workers (including some from the Mainland China), it also fills its skill gap through outsourcing projects to vendors like C2-VD.
In contrary to C1-PB and C2-VD, contingent employment has not been C3-FI's preference even though it requires a flexible workforce to support its growing IT workload, especially the one-off historic large project - the core financial institution application upgrade project. The flexible resources that C3-FI normally looks for are experts with knowledge of the finance industry and experience in the vendor solutions they are using. This has to do with its preference to use vendor solutions instead of developing custom built IT applications. It always employs experts from large vendors or partner organisations with such capabilities. Moreover, C3-FI seeks rapid expansion to support business growth. This leads to high complexity in its demand for IT capabilities. Its resource strategy expands to include ‘in-sourcing’ contingent workers, ‘outsourcing’ to vendors, ‘co-sourcing’ with partners and ‘adding new headcount’. C3-FI is the only case study organisation employs the ‘co-sourcing’ strategy (Kaiser & Hawk, 2004; Salopek, 1998). The key characteristic is both work (Baldwin, Irani, & Love, 2001; Kaiser & Hawk, 2004), risk, and reward (Hirschheim, Heinzl, & Dibbern, 2006) are shared between the organisation and the co-sourcing partner. C3-FI always keeps the core business knowledge and user relationship in-house, the external resources are only hired as “arms and legs” to gain time when a project is under tight time pressure or when experts are unavailable in-house. These external workers are contractually obligated to transfer knowledge to C3-FI permanent IT staff before they leave the organisation.
Investment in Project Management Capabilities
With the choices of IT project management resource strategies, organisations seek for ways to improve its project management capabilities to support their business imperatives. From this perspective, the three case study organisations have invested in use of project governance and support structures. C3-FI was at the stage of migrating from simple IT project management practices to structural ones. It uses the compliance and quality assurance function, the Compliance and Quality Assurance (CQA), to audit all types of projects including the IT projects to ensure C3-FI's operation complies with all internal and external regulatory requirements. The establishment of the PgMO in early 2009 is “the biggest thing that [C3-FI has] done in relation to project management capability enhancement,” said Participant C3.B. It has further invested in tools such as Project and Portfolio Management (PPM). C1-PB as a public organisation, however, utilises project management investments made by both the OGCIO and its own. It used to structure its IT project management processes following the Project IN Controlled Environments 2 (PRINCE2) methodology. C1-PB further enhances the methodology to comply with its Capability Maturity Model Integration (CMMI) processes, uses the CMMI portal and enriches the PMO functions to include a CMMI audit. With a number of large projects kicked off to revamp the legacy applications running on mainframe machines, the Technical Architect (TA) team was established to guide the architecture design and build up the in-house IT framework for all IT projects. It continues to run IT projects in a structural manner with continuous enhancement. Similarly, C2-VD's project management investment begins with the corporate project management methodology. It is localised and obtained an International Organisation for Standardisation (ISO) certification to be the local project management processes of the IT services business unit under study. Investment in tools such as KM systems also comes from its corporate office. The project management practices are structural and complex. The governance and support structure are also the most sophisticated one among the three case studies. There is a corporate level PMO, local level PMO, and IT services business unit level business operation team and ‘people manager’ function. C2-VD is the only organisation among the three case study organisations that has a special function to take care of the contingent workers. The ‘people manager’ function in C2-VD is beyond the formal organisational structure. A people manager is one who provides personal care to individual contingent worker and he or she may not be the project manager of the worker. This allows a contingent worker working on a project to have at least two channels to communicate with C2-VD management.
Project Management Learning
Regarding project management learning, Järvinen and Poikela's (2006) process of learning at work model has been applied to analyse the learning practices of the three case studies. This model emphasises the learning at three contexts: context of individual learning, context of shared learning, and context of organisational learning. It also condenses learning at work into four forms of processes: social processes, reflective processes, cognitive processes, and operational processes. Social processes are about the sharing of know-how knowledge and experience. Learning requires participation. Reflective processes are about the factors relating to the obtaining and giving of individual feedback, the assessment and the continuous evaluation. Cognitive processes are about the production, sharing, transfer, and recording of knowledge. Experience-based knowledge is refined into more general knowledge for the organisation's databases. Operational processes are the continual experimentation and testing of new practices and having the new practices become firmly established (Järvinen & Poikela, 2006, pp. 181-183). The common learning practices from the three case studies based on the model are listed in Table 2.
The three case study organisations are strong in cognitive and operational learning processes. From the strongest to the weakest learning processes, the common sequence has been cognitive, operational, reflective and social. The only exception is C3-FI. It may be because it has more focus to increase its in-house staff as home-grown leaders; staff are provided with opportunities to experiment with new ways to perform their work (operational learning). Conversely, organisations (C1-PB and C2-VD), with a high reliance on contingent workers and external parties, spend more effort on cognitive rather than operational learning. This may be caused by the high mobility of the IT workforce, and codified knowledge has to be retained by formal project management processes, organisational policies, and guidelines.
Table 2 – Common organisational learning practices. Source: Järvinen & Poikela's (2006) process of learning at work model
|Social Processes||Reflective Processes||Cognitive Processes||Operational Processes|
|Individual: Context of individual's work||* Practice on the job |
* Progressive job complexity
|* Informal coaching |
|* Formal training |
* Formal qualifications
|* Giving opportunities |
* Experimenting with new practices
|Group: Context of shared work||* IT project execution |
* Project knowledge sharing
* Informal cross sharing
* Job rotation
|* Formal project assurance (e.g., IT project audit by PMO/PgMO)||* Formal project management methodology||* PMO/PgMO driven continuous improvement |
* Experimenting with new IT project strategies
|Organisation: context of organisation's work||Not applicable||* Performance reviews |
* Employee surveys
|* Policies and guidelines||* Experimenting with new policies|
Characteristics of Contingent IT Workers
After understanding the organisational IT project management learning model, the next section looks at the viewpoints of individual contingent workers. In analysing outcomes from the individual contingent IT workers’ perspective, this paper mainly compares the cases of C1-PB and C2-VD. Participants of C3-FI have provided their viewpoints on the subject matter from their experience on hiring or managing contingent workers. Table 3 and the following paragraphs describe the identified common characteristics of contingent IT workers in large Hong Kong organisations.
Ten of the 12 participants from case studies C1-PB and C2-VD have contingent employment history. However, only one participant became contingently employed because of the poor economy and could not find a permanent job at the point of time he looked for a job. The other nine participants became contingently employed either by choice (seven) or by chance (two). In fact, seven of them chose to quit their previous permanent jobs to get into contingent employment. The reasons include acquiring marketable skills, career advancement, personal development, or better salary. Therefore, it may be concluded that it is common that IT workers voluntarily choose to become a contingent worker when he or she sees there are opportunities to earn the benefits from the contingent employment that overcome the drawbacks.
There are exceptions. Fifteen of the 18 participants in the three case study organisations raised the concern that young IT professionals may involuntarily get into the IT industry as contingent workers because large Hong Kong organisations mostly prefer to hire experienced IT professionals. The three case study organisations have such a preference. Moreover, nine participants from C1-PB and C3-FI state that IT professionals specialised in older legacy technology may also involuntarily become contingent workers when the economy is poor. They have a narrower job market and may have difficulty in finding a permanent job once they resign or are dismissed from their permanent positions.
Non-short-term Basis Contingent Jobs
One interesting finding from C1-PB and C2-VD is that nine of the 12 participants state that “stability” is a key benefit to contingent workers (see Table 3). A contingent IT job seems no longer be labelled as temporary or short term. Continuous renewal is common in C1-PB, and C2-VD intentionally retained a pool of stable extended workforce. In C1-PB, five of the six participants regard the contingent worker's attrition rate as low; in C2-VD's case, 40 percent of their contingent workers are stable and stay with C2-VD for over three years. Therefore, large Hong Kong organisation such as C1-PB and C2-VD seem to have preference to keep a pool of reliable and high-performing contingent IT workers. Even if a contingent worker resigns and leaves the employing organisation, there are possibilities that one will re-join the employing organisation. There are examples in C1-PB and C2-VD. Practically, C2-VD's resource manager proactively keeps contacting ex-contingent workers to invite them to rejoin the organisation on its latest projects. Furthermore, when there are headcount establishments in commercial organisations (such as C2-VD and C3-FI), high-performing contingent IT workers have the advantage of being selected to fill these permanent positions. Therefore, a contingent relationship between the employing organisation and the contingent IT worker are not solely developed through a short-term basis.
Human Resources Agency as Legal Employer
In both C1-PB and C2-VD cases, the number of direct contract employees is much less than that of human resources agency workers. In C1-PB, the average percentage of contingent IT workers as a total of C1-PB's IT workforce is about 50 percent. They are all under body-shopping contract employment through human resources agencies. In C2-VD, there is no direct contract employment in the IT services business unit under study. Seventy-five percent of this business unit's IT workforce is contingently employed through human resources agencies. An individual contingent worker, working for a large organisation in Hong Kong is likely to have a human resources agency as his or her legal employer.
Impacts of Contingent Employment
From the individual contingent worker perspective, there is high level of similarity in contingent employment positive and negative impacts. Table 3 summarises the common impacts from participants of C1-PB and C2-VD. The positive impacts of contingent employment to IT workers are having higher wages, acquiring exposure for career and personal development, remaining marketable, enjoying manageable workload, and having stability. They normally enjoy the freedom to choose jobs that fit their personal goals (such as more income, lighter workload, or fewer job responsibilities) or career development directions (such as learning latest technologies or involving in large IT projects). The common negative impacts are job insecurity, less career development, lower benefits and working conditions, lower training and development investments, and a lack of a sense of inclusion. Contingent workers generally feel unhappy that the employing organisations do not provide the same training, development and job opportunities to them as compared to in-house staff and they do not feel they are treated as part of the organisations even they may have worked there for a few years. The last positive impact – stability and the first negative impact – job insecurity seems to be contradicting. However, nine of the 12 participants from C1-PB and C2-VD supported stability as a positive impact because they see the job security or stability is the same for both permanent and contingent IT workers, especially when the economy is poor. Contingent workers are as insecure or as stable as permanent workers in C2-VD. Participant C2.D says “Nowadays, the world is very pragmatic. Only those who can adapt survive.” Participant C1.E also says, “T-contract job here may be more stable than some permanent jobs outside”.
Table 3 – Common characteristics of contingent workers
|Voluntary choices||IT workers commonly become contingently employed either by choice or by chance.|
|Involuntary choices||Young IT professionals with little work experience or IT professionals specialised in older legacy technology have higher chance to become contingent workers involuntarily.|
|Non-short-term contingent job||Large organisations have preference to keep a pool of reliable and high-performing contingent IT workers; continuous contract renewal is common; performing contingent workers have opportunities to fill permanent positions in commercial organisations.|
|Legal employer||Large employers rarely direct contract contingent workers; an individual contingent IT worker is likely to have a human resources agency as his or her legal employer.|
|Contingent employment impacts on contingent workers||Common positive impacts: Higher wages, career and personal development, remaining marketable, manageable workload, stability. |
Common negative impacts: Job insecurity, less career development, lower benefits and working conditions, lower training and development investments, lack of a sense of inclusion.
Enhancing Project Management Capabilities
In Table 2, the context of individual's work lists the common learning practices of IT professionals to advance his or her project management capabilities across the three case study organisations. If case study C3-FI is excluded, there are three additional common learning practices at this level. These are informal networking (social), learning from internal and contingent workers (reflective), and accumulating creditability (cognitive). These may be more specific learning practices toward contingent IT workers. The “temporary” employment relationship between the contingent worker and the employing organisation leads to fewer training and development investments and fewer career development opportunities for contingent workers (see common negative impacts in Table 3). In order to advance one's project management capability, a contingent IT worker has to be more self-reliant than a permanent IT employee. One tends to move from project to project and get to know more people than permanent IT workers. Learning from people working on the same projects is essential to one's capability growth. Networking with agencies and other contingently employed colleagues are also essential in job search. Social capital development is important to both capability and job security of contingent workers. Furthermore, one has to keep up the credibility in order to have a contract renewal or find a new contract job. A contingent worker is used to plan for one's own development and practise the individual level's social, reflective, cognitive, and operational learning and prepare to pay for one's own development investments.
Changing Contingent Employment Balance
Contingent employment has been practised in C1-PB and C2-VD for over a decade, and they have experienced a rising trend of utilising contingent IT workers. However, the large number of contingent IT workers and continuous contract renewals becoming a norm caught the attention of the OGCIO, which has revised the policies to tighten the control on the body-shop IT workers’ headcount, budget and employment duration since 2009/2010. At the same time, C2-VD has revised its resource strategy to hire more young IT professionals to develop as future leaders instead of just hiring experienced employees with contingent workers as supplements. In fact, seven participants of C1-PB and C2-VD state there is need to identify a balance in the ratio of contingent and permanent workers. In C3-FI, a similar but opposite view is observed. They have a low reliance on contingent IT workers. Five of the six participants concluded that they should increase the proportion of contingent workers to gain any related benefits. Therefore, every organisation seems to look for a balance point on the ratio of contingent to permanent IT workers to suit its own needs at a specific point of time.
Developing Social Capital for Project Management Learning
Networking for Better Social Capital
As represented by the three case study organisations, large Hong Kong organisations are likely to have adopted a project resource model with a high percentage of external resources (such as C1-PB and C2-VD) or prepare to expand their external partner pool (such as C3-FI). With contingent employment as IT project resource strategy, there continues to have in-flow and out-flow of knowledge carried by contingent IT workers to and from the organisations. Participant C2.A believes that business success has been its ability to take on “public knowledge” (that is knowledge not unique to any one firm but resides in the external environment); blend with its “private knowledge” (that is knowledge unique to the firm and a source of competitive advantage) (Matusik & Hill, 1998, p. 683) to develop its new “private knowledge” and retain it in-house. With people moving among projects and organisations, there exist opportunities to form various people networks within and beyond their organisational boundaries. Some networks have a visible shape and boundary and are mediated by some internal leaders such as senior IT managers or project directors, PMO or PgMO leaders, and resource managers. An example is in C2-VD, project director trees are mediated by project directors. A few project managers leading multiple projects report to one project director forming a tree. However, IT workers under different project director trees learn differently. Some project directors take the effort to encourage cross learning among his/her project teams, some do not. C2.A believes that “[Cross project sharing] depends on the project director's view”. The outcome of developing and capturing social capital in these networks with mediators is highly dependent on the mediators’ effectiveness. Two similar networks within the same organisation may not have common learning practices. Other networks are relatively volatile and informal without visible mediators. An example is C1-PB's vertical people networks where people forms their social networks according to the special characteristics of the individuals. They may group together because they are T-contractors (same employment terms) or project managers (same occupation) to form networks. Those participating in these vertical people networks may share latest T-contract employment news or exchange updates of different projects’ status. Such information is essential to contingent workers’ job search and survival. Therefore, the existence of these networks depends if the individual IT practitioners having similarities find common interests and form their networks or not. Learning from such networks is likely to be personal, and the effectiveness of learning from such networks is people dependent.
There exist networks beyond organisational boundary. Formal networks include the contractual relationships with the human resource agencies, outsource partners and IT services providers. In the three case studies, cross learning mainly involves product information exchange or project level sharing. Regarding informal networks, there are some senior C1-PB IT managers participating in some IT professional associations; some C2-VD representatives sitting on the committee boards of representative IT industrial bodies; and the CIO of C3-FI actively involving in various IT and financial industrial bodies.
All networks mentioned can be essential social capital to the organisations. However, none of the 18 participants mentioned how such networks help to enhance the organisational project management capabilities. It is an under explored arena.
Weak Cross Project Social Learning
Various people network within and beyond their organisational boundaries have not been capitalised in the three case study organisations; even networking among project teams within the same organisation has not been strong. Taking a proactive role in building social learning facilitations to fully capture the potential from their in-house and external resources across multiple projects is found to be a shared weakness in the three case study organisations. Learning among IT workers is mostly by chance or an individual's act, not through organised social activities. Most participants see social learning only happening within the same project, but not across projects. Similar to the example of C2-VD's project director tree, two managers (project directors) may not share learning practices. The learning practices are mostly individual dependent. Therefore, there is no consistency even within the same organisation. Nevertheless, large organisations such as the three case study organisations have central structure such as the PMO (or PgMO), TA group (C1-PB), business operation team (C2-PB) or CQA (C3-FI) to diffuse organisation-wide project management knowledge to different project teams in the form of a central hub. However, such central hubs may not own the cross project or cross team learning facilitation function. For example, the three PMOs (or PgMO) only guide and review projects one-on-one; cross-project learning activities are not in their charter. Nevertheless, there are social learning opportunities; contingent workers in these organisations have less participation than in-house staff. They may not be involved in formal job rotation (but project rotation) cross departments, have contact with the central hubs, or be part of some internal staff only networks. An example is C2-VD only invites selected contingent workers, not all, to join their annual dinner. Therefore, a contingent worker's social learning opportunity is thus less than that of in-house IT staff.
It may be summarised that today the social capital development in relation to the project management capability is not commonly facilitated by centralised organisational structures. Learning from social networks is mostly an individual's act. Large Hong Kong organisations such as the three case study organisations may not have put in enough investment to encourage and facilitate social learning and capture social capital generated in the contingent employment context.
Conclusions and Areas for Further Research
The sections of this paper compare and summarise the findings of the three case studies. The outcomes do not support the initial proposition that “Contingent employment policy has an adverse impact on individual and organisation learning and causes a decrease in IT project management capabilities in large Hong Kong organisations.” There are both positive and negative impacts to organisations (see Table 1) and individual contingent workers (see Table 3). Such impacts demand each party to adapt a suitable learning model, organisation structure, and investment (see Table 1) to advance IT project management capability to suit the context.
The analysis concludes that the degree of projectisation, project resource strategies, and investment on IT project management capabilities have to fit the organisation's specific business dynamics and change over time (see Table 1). The business situation of organisations determines the IT projects’ scale and complexity. These factors lead the IT groups to be organised along the spectrum of functional, balanced matrix or projectised structures. An organisation with higher projectisation (such as C2-VD) is likely to have a higher reliance on contingent IT workers and more resource varieties as its IT project resource strategy. In order to continue advancing its IT project management capability while depending on a increasing percentage of mobile external resources (including contingent workers), an organisation may invest more on project governance and support structures, project management methodology and tools. In order to retain project knowledge in-house, it is preferable to retain the stable in-house staff to capture the tacit organisational knowledge and invest in cognitive and operational learning to retain codified organisational knowledge. At the same time, large organisations upon utilising contingent employment resource strategy for a period of time seek to find a balance point on utilising contingent IT workers. Too high or too low reliance on such workers may not be considered as ideal.
From the contingent workers’ perspective, in most cases, they get into contingent employment work voluntarily unless they are young IT professionals or older technology IT workers. They enjoy the positive impacts brought from contingent employment (see Table 3 – common positive impacts) although they may dislike or accept the negative impacts associated with them (see Table 3 – common negative impacts). The nature of such employment is contingent; however, the contingent workers may stay in an organisation for a long period beyond the duration of a project because large Hong Kong organisations prefer retaining a pool of stable contingent workers. Performing contingent workers may probably have multiple contract extensions or even obtain permanent job offers from the employing organisations. To advance the project management capability to stay marketable, a contingent IT worker is likely to self-invest and practise the individual level's social, reflective, cognitive and operational learning. In particular, developing one's social network is essential to both the learning and survival as a contingent worker.
The social capital development is mostly concerned with individual rather than organisational behaviour in large Hong Kong organisations. Within an organisation's boundary, social capital development is normally informal and leader dependent. Beyond the organisational boundary, social learning is not well mediated although various forms of informal social networks within and beyond the organisational boundary exist. It is an underdeveloped area in large Hong Kong organisations.
The research contributes to organisations having contingent employment as an IT project resource strategy by suggesting reference models (see Table 1) to organise and develop organisational learning practices; and to contingent workers by providing a broad view of contingent employment (see Table 3) and their ways to enhance in their project management careers. Academically, this research has three contributions including filling part of the knowledge gap; integrating knowledge areas: IT project management, contingent employment, and enhancing IT project management capabilities; and identifying new knowledge areas such as the value of social capital in contingent employment context that demands further study. However, this research has its inherited limitations from theoretical frameworks and a small number of case studies, the findings cannot be generalised to represent the situation of a typical large Hong Kong organisation. Furthermore, the participants are mostly from the IT group of the case study organisations. The data collected regarding a case study organisation are drawn from a relatively small group within a large organisation. They could be biased. However, based on the outcome of this research, a number of areas may be further studied. Within the case study organisations, further research could be undertaken in areas of weaknesses such as the social learning processes or capitalising social capital to fully exploit their capabilities (including the contingent workers). Expanding the research to other geographic areas such as the Mainland China may potentially identify interesting results. Furthermore, the value of social capital in relation to enhancing IT project management capabilities and perfecting the contingent employment practices, are also worthy of further study.
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© 2013, Ng, Chui-Ha (Tracy)
Originally published as a part of 2013 PMI Global Congress Proceedings – Istanbul, Turkey