With demand for quality tech professionals bigger than ever, it’s no surprise that the turnover rate is higher than in any other sector. The digital revolution has resulted in a scramble as businesses fight for the best talent to fill their ever-growing IT teams. It’s a great time for employees who want to get the best deal for themselves, but it’s a conundrum for employers.
Research from LinkedIn indicates the tech sector has the highest turnover rate of any industry in the United States at 13.2%, and the figure is as high as 23.3% for those positions that are most in demand. Considering how well-remunerated STEM positions generally are, it may come as a surprise that finances are dictating much of this movement.
The average salary of a tech professional in America is around $85,000, which is almost double the national average. Yet as we uncovered through a survey of tech workers, 32% said they expected to leave their employer within 12 months. The most common reason for changing roles was a lack of salary increase.
Looking for a Solution
There are two ways to try to remedy this. The first is simply to meet those demands and increase the remuneration on offer, but this is unlikely to be feasible for most businesses and will be unsustainable in the longer term for everyone. The more practical solution involves looking at other factors that influence people’s decision-making process, to find other ways to retain staff.
From our own research, the most common reasons for leaving a role tend to be interdependent. Beyond a salary increase, a lack of career prospects came second on the list, closely followed by a need for a new challenge, something that a study of your company culture could help remedy. Are you rewarding your top performers? Is there a clear pathway for them to progress within the company? Promoting from within and fostering that as part of your brand identity will give people a reason to stay.
Mentorships that develop your staff will also give them a clear route to forge a long-term career with you. When your employees’ eyes are on the road ahead, they’re less likely to be looking for an exit. If you’re aiming for a seemingly achievable promotion, any salary increase on offer elsewhere has to be substantial to be a real temptation.
The tech industry is often criticized for a lack of diversity, and statistics tend to back these critiques up. For example, only 20% of Google’s technical roles are held by women, with most industry surveys reporting a lower figure. In terms of minority groups, only 2% are African American.
Widening your net when hiring, and actively recruiting people from under-represented talent pools, will not only give you a better choice during the recruitment process, but serving the needs of these groups and developing a proper support network will also make you a much more desirable employer. When the quit rate for women in technology is twice as high as it is for men, creating an inclusive workplace is a vital consideration.
While this may involve a wholesale change in the structure, culture and operation of your organization, there may be other modifications you can look at that are easier to implement in the short term, and that will help you improve your own retention rates. For example, flexible working hours and remote working are often cited as big factors that influence the decision to accept a job offer elsewhere.
For many people, flexible working is an essential part of the decision-making process when considering their employment status. Giving your employees the flexibility to allow for any child-care requirements will go a long way toward making you a valued employer. Higher pay from a competitor is nice on paper, but when that extra money is swallowed up by a nursery or child-minder, plus the steps involved in arranging these, then your benefits package alone may be a cost-effective way to keep your retention rates as high as possible.
Ultimately the tech industry has one of the most competitive job markets on the planet. The predicted global shortage of STEM professionals is hurtling toward us, with more positions than ever left unfilled. As a recruiter working with niche technologies, we’ve seen the demand for talent grow immeasurably. While the balance of power has always tipped in favor of the best professionals, tech is now truly a candidate’s market, and it’s your responsibility to make sure you’re doing your best to attract the talent you need.
It may seem like the best option is to look at ways you can get ahead of your competitors, and get the jump on those workers who are looking at their next move. However, switching your focus toward engaging the talent already within your organization and improving retention rates will provide you with a far better long-term solution, as well as having a happier and more productive workforce as a result.