Malam's Secret of Success: Bosses Who Treat Their Workers Well

The Malam Group used to be the national government's computer unit. In the 1990s it was privatized and changed hands several times, even turning into a public corporation at one point. The company is now in the midst of a merger with the Team Computer Group. This merger is expected to create Israel's largest computer company, with 3,000 employees. Even alone Malam is considered one of the country's largest computer companies. It currently has 1,800 employees working in a variety of activities in its five business units. We spoke with Kobi Tzitter, vice president of human resources, about Malam's operations and its approach to employee management.

Malam's past operations as a government support unit was issuing salary slips. This comprises a substantial portion of the company's operations today as well.

Malam, which was founded in the 1950s as a government support unit, was set up to issue salary slips for state employees. Today Malam remains a major force in this field as one of Israel's top two service providers. Malam currently issues 600,000 salary slips (including those for its longstanding client, the Civil Service), which represents about one-third of the market. But today the company provides a wide range of software solutions. Of 1,800 employees 150 work in the salary departments.

What are the other four business units involved in?
Two other business units are ERP and Managed Services, which includes the Technologies Department and the Outsourcing Department.
The two other business units are Projects, which is active in various economic sectors and operates specialty units such as CRM, and Consulting, which operates computer workers who work within computer units at various organizations.

How many employees work in Projects and Consulting?
Projects has about 400 workers and Consulting has about 500. [Malam's Consulting unit is based on a common arrangement in the computer industry in which computer workers are employed at the client site for an extended period of time.]

That means that over half of the company's employees are located at client sites most of the time. How do you preserve their identification with Malam?
This is one of the main dilemmas IT companies around the world have to cope with in the modern work world. The matter becomes particularly conspicuous in the case of a single computer consultant working at the client site. He arrives at the bank or the police headquarters - it doesn't matter what the organization is - and there he works
side-by-side with the organization's employees. He may not be the only computer person, but works with computer workers from other software companies who have a similar 'problem.' 
This kind of worker has a double identity; he belongs to the software company that set him up there and to the client in charge of him, and the person who operates him is a manager belonging to the client organization.

So it differs from outsourcing. In outsourcing the entire unit in which he works, including his supervisor, is made up of people like him from the IT company, which runs the customer's computer setup.
That's right. With outsourcing you don't have this problem. The double identity comes to the fore in a variety of ways. At gatherings for instance. The employee went on a company excursion with Malam and a company activity with the bank. The bank personnel don't regard him as an outsider.

In cases where the organizations employ workers through contractor companies the customer wants to create a severance between its employees and the contractor's employees in order to avoid concerns of employer-employee relations.
When it comes to contractor employees that really is the case, because one of the main reasons for employing them under this arrangement is the desire not to create
employer-employee ties. On the other hand, among computer workers this is generally not the main reason for employing them this way, but rather a desire for the employee to be connected to the company, which has knowledge and professional capabilities. Therefore this concern, in the case of computer workers, generally doesn't exist among the customers. They tend to create activities that motivate the worker to identify with the customer.

You mentioned that sometimes the customer operates computer workers from a number of software companies. Why is it worthwhile for the customer to deal with several different providers?
For two main reasons. One is the desire to create a constant sense of competition among the companies in order to obtain optimal terms. The second reason stems from the way the workers placed at the client site are recruited. When a customer solicits bids for manning positions, software companies offer their employees. Generally these are employees recruited for this purpose. Many of them are already in the software companies' candidate pools.
Many of these workers are listed in the pools of more than one company. According to the ethical code in the market the first company that offers the worker that the customer selected is the one through which that worker is employed. So the worker is selected by the customer and employed by the first computer company that offered him to the customer. [Based on Tzitter's remarks, in this case the identity of the worker is more important than the identity of the company that sent him. -Stauber]

Then it's a complicated matter to create a sense of organizational identity because in most cases this worker didn't work at Malam previously, but was sent by Malam to the customer.
That's correct. But from this point on he is also managed by Malam. That means from the start of his term of employment he forms ties with both companies - the customer and the IT company that sent him to the customer and employs him in practice.

That means a worker who is not satisfied with the way the computer company that sent him takes care of him can speak with his manager at the client site and ask to be employed through a different computer company.
Yes, and things like this do happen. But as it turns out, what's generally important to the employee is his ability to develop professionally at the company. He doesn't just get a salary from us, but we also send him to courses, he attends professional meetings at Malam and he gets professional support.

Is the status of Malam's in-house workers, who work in the other three departments with operations on the Malam campus, considered higher than that of workers at the client sites? Despite the efforts to make them feel at home, they're still disconnected from the company.
What you're saying may have been true 15 years ago. But today things are different.
A Malam worker is involved in a project at the client site that lasts for a few months. Once the project is finished he can choose if he wants to go on to another project or stay with that customer as a support person. As a rule people prefer work that offers more of a professional challenge. Today the employment framework is less important to them.

What is the company's turnover rate?
Relatively low - 7%. Last year we recruited 450 people, but most of them were hired as a result of growth. Only 100 were part of routine turnover.

Did most of those who left choose to leave or were they dismissed?
The majority, about 70%, left of their own accord.

Were most of the new employees you recruited employed at other companies or not working?
About 60% of the employees recruited were working people who continue looking for work and move from one place to another.
The rest were not necessarily unemployed because they couldn't find work, but young people who just finished their studies and entered the high-tech job market for the first time, without job experience in IT.
For instance, in an ERP project developers are placed in administrative fields such as finance, human resources or logistics. To achieve this we hire an accountant, a human resources person, an economist or an industrial management engineer. 
That means we recruit an inexperienced professional without specialized training, provide him nearly six months of training in technological fields and then he can be placed in a work team at a client site. That's the way we train people with a general educational background who want to work in the IT world.
Another segment of the population is charedi women. This year the field will grow and the number of women from this sector will be over 100. We train them in cooperation with the Ministry of Industry, Trade and Labor and the Joint. Obviously these women are not employed at the client site, but at a special site for them in the charedi city of Beitar Illit. We call the worksite "Nearshore," a takeoff on the term "offshore," which is used to describe workers employed at sites in other countries.

What drives workers to switch from one company to another when really there's no substantial difference in the job or the terms of employment? In fact, most job mobility takes place among these companies.
You touched on the central managerial question. The main reason for switching jobs is not money or job conditions, but the treatment by the direct supervisor. Sometimes the job looks great on the outside - the right pay, good conditions, professional training - but in the worker's heart, the band's not playing. The manager pushes the worker off to the side and suddenly everything looks glum to him. This is a well-known problem at
high-tech organizations. You'll even find it at companies like General Electric, Motorola and Philips.

Why? What's distinctive about these companies?
In high tech managers are homegrown from the bottom up and throughout their career path emphasis is placed mostly on professional knowledge and less on managing skill.

So if the problem is recognized, why aren't efforts focused on developing managerial abilities?
Because at this type of organization the employees are constantly under time pressure. Another project, another task. The emphasis is on technology, that's the focus of the competition. They focus on what takes hold, and rightly so, since it's the basis for survival and growth.

Sometimes organizations promote people because they deserve a promotion - even if they're not capable of functioning as managers.
That's a problem that was widespread in the past, but today there's more awareness. We won't advance somebody to a managerial task if he lacks basic managerial skills. Today
I can promote an employee without making him a manager. I'll give you high pay like a manager, I'll give you a good company car or a subscription to Globes. I have no problem with that.

Do most of the managers come from within company ranks?
Yes. Keep in mind that there's also organizational lingo the new manager has to adapt to and this isn't always accomplished successfully. Those who worked their way up from the bottom are already familiar with it. An organization that doesn't advance people from the inside is making a grave mistake in my opinion. People want to develop. If you don't give them the chance, they'll leave.

I assume at Malam, as well, employee referrals are one of the main recruiting tools.
Definitely. And it's also the best recruiting tool - half of our recruitment is carried out this way. We compensate the workers for it, generally a 4,000-shekel bonus. For Golden Jobs the amount is double.
Another important recruitment source is the candidate pool I mentioned previously. In my view the pool is very similar to pools at other large companies and all of them update them regularly.
The quality and size of the pool determine the IT company's ability to do what's most important from the customer's viewpoint - to send it the best worker within the timeframe outlined. We have a pool of 40,000 people. I think just about everybody connected to the computer market is listed in it.

How do you carry out recruiting using the pool? Who picks up the phone to a candidate who comes up?
The recruitment coordinators in the Human Relations Department make the call. It's generally done during evening hours when the worker is probably not at work, because they don't want to put him in an uncomfortable position. The position is presented to him and he is asked for permission for Malam to suggest him to the customer as a candidate. If he agrees we call him in for an interview (unless we've already interviewed him in the past). His name is then passed on to the customer and then the customer calls him in for an interview.


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