Employers must figure out how to retain tech talent during this major workforce upheaval, when many skilled workers are calling it quits.
August broke employee resignation records: 4.3 million people resigned from their jobs. This phenomenon, labeled the Great Resignation by economists, has been most disruptive in the hospitality, service, and restaurant industries, and is now impacting the tech sector: a Harvard Business Review study that analyzed over 9 million employee records from more than 4,000 companies found a 4.5% increase in tech resignations in 2021, marking one of the biggest jumps in resignations in any industry. The study discovered this could be due to tech experiencing huge surges in demand during the Covid-19 pandemic, leading to overwhelmed employees. Strikingly, 58% of tech workers reported suffering from job burnout.
Another insight was that resignation rates have had the largest increase among employees aged 30-45, which is atypical, given that the 20-25 year-old demographic is usually more prone to leaving their first roles. Despite being a dynamic, in-demand, and higher paying field, the tech industry is in the midst of a widening gap between the high number of tech job openings and skilled tech talent to fill it. Coupled with more and more resignations among the employees currently in these positions, industry analysts project a deficit of 6 million skilled tech workers and $162 billion worth of lost revenues by 2030.
In the face of so much uncertainty, companies must look inward and devise clever solutions on how to retain tech talent.
Momentum works with companies of all sizes on tech talent pipeline development, and recommends these strategies to improve tech talent retention:
1. Offer Ample Training Opportunities
A staggering 91% of tech workers want more training from their employers, a much higher rate among tech employees than the overall workforce, where 21% reported they would like their current employer to improve in training efforts. In fact, 32% of tech workers cite a “lack of learning and development opportunities” as the primary reason they leave their jobs, and 94% of employees report they would stay at their companies longer if they invested in professional and career development opportunities. Top of the list of specific tools they would like to learn, tech workers are asking for “technical skills related to their current role or project” (65%) followed by “technical skills related to emerging technologies” (60%). Tech workers also report professional development interest in soft skills areas like communication, leadership, and project management.
Training, particularly programs that are customized to align with organizations’ specific needs and business objectives, encourages employee engagement and provides motivation to improve. Organizations that provide professional development training report 37% greater employee productivity and are 58% more prepared to meet future demands. And when training programs are made available to employees who have been historically underrepresented in higher-level tech positions, that measurably advances your company’s commitment to diversity, equity, and inclusion. Finally, in many cases, investment in providing quality training to tech employees is more cost effective than recruiting fresh talent: when employers demonstrate commitment to the personal and professional growth of their team, their retention rates improve.2. Facilitate Transparent Career Progression
“Limited career progression” is the top reason reported by 41% of tech employees for looking elsewhere. Ensuring employees have room to progress in their careers is essential. Equally important is informing workers on what that progression looks like. Employers wondering how to retain tech talent should outline what is needed for each position to advance to the next level. Some organizations call these career journeys, but there are a variety of communication styles companies can adapt to explain job trajectories. Regardless of format, companies should chart a clear path for employees, so they can be empowered to gain key competencies and achieve position-advancing milestones.
Another way to prioritize opportunities for promotion is by establishing formal systems for frequent feedback sharing and goal tracking. Emphasizing this dialogue signals to employees that their employer never wants them to be in the dark with how they are performing and where they could be doing better. This goes hand-in-hand with training, because 75% of those in tech feel that their company focuses more on attracting new employees than investing in the existing ones. Stressing upskilling programs or mentorship opportunities shows your team that they can rise to higher tier positions. This combats feelings of staying stagnant or being undervalued, which yields disenchanted employees that may want to move elsewhere.
2. Foster a Supportive Company Culture
Tech workers experiencing burnout because of heightened need for their skills – more hours, and more demands – are twice as likely to quit their jobs. That’s why having a company culture that supports employees should be an especially pressing priority for companies. A toxic work environment” was cited by 39% of employees as the main reason why they are considering a change out of tech and “not being valued and appreciated” was cited by 37%. One of our Momentum graduates, Nichole Ross, spoke in a Women in Tech panel in early 2021, and she applauded the company culture surrounding her new role as a software engineer at Xactly Corp. In fact, she chose this position over offers from other companies that promised higher salaries because of Xactky’s culture. Nichole spoke on a few highlights such as the way higher-ups revised a powerpoint announcing DEI initiatives with her suggestions despite having just joined the company, the recent introduction of company-wide mental health days, and the advocacy and goodwill her superiors and teammates demonstrate on a daily basis. Nichole emphasized that culture really matters when considering how to retain tech talent.
This is backed by data, as 86% of employees at companies with strong culture feel the leadership listens to them. Surveying your employees about their work environment and experiences, and implementing their feedback is a great way to show that leadership cares. Overarchingly, workplace cultures that live out clearly-articulated company values through everyday practices creates an authenticity that employees can buy into. Employees point to regular and candid communications (50%), employee recognition (49%), and access to management/leadership (47%) as the biggest factors that impact workplace culture, whereas executives often point to financial performance (65%) and competitive compensation (62%). Culture transformation begins from the top-down, so it is important for management to look beyond the numbers and also focus on attributes that their employees report matter to them. Putting employees first and focusing on creating an open and accepting workplace is vital. Injecting some fun through perks trademarked by some of the biggest tech firms such as employee-wide meals or playful workspaces are other ways to foster amenable environments for longevity.
3. Put Flexibility and Rewards at the Forefront
The pandemic necessitating social distancing and stay-at-home orders has ushered in a whole new way to work and caused many employees to assess how they balance their priorities. 40% of employees say “lack of flexibility in working hours” and 30% said “lack of remote work options” are top considerations for why employees say they are considering leaving their job in tech. As of June, only 17% of tech employees found working in the office full-time to be extremely or very desirable, while at the same time, there has been a decline in the desire to work remotely five days a week, from 41% in Q4 2020 to 29% in Q2 2021. This mixed feedback explains the rise of hybrid models, with a mix of in-person and remote work. Employers should keep in mind that, while tech workers like the flexibility and schedule control that remote work provides, they have reported greater difficulty maintaining working relationships with colleagues and their managers. Building in expectations for communication and forums for virtual events are helpful in removing barriers for connection when not face-to-face.
In addition to flexibility in work location and hours, companies also need to acknowledge the pressures the pandemic has placed on everyone. Employers should re-assess whether their compensation packages are aligned with the high-demand market for tech. It does not stop there, however, because adjusting pay is usually a short-term motivational fix for retention. Recognizing jobs well done in formal and informal capacities and implementing rewards for specific accomplishments in line with organizational goals helps translate into a long-lasting impact on retention. Getting creative with meaningful benefits is helpful, too, like the way some companies are offering childcare support to assist parents working from home.
We are living in a time of widespread career reshuffling, and that has given employees greater expectations in areas like learning and development, ways of working, compensation, company culture, and more. Momentum offers training solutions in both technical and soft skills as well as corporate improvement courses, so that your business can make advances in how to retain tech talent and emerge from the Great Resignation even stronger than before.