As we enter 2023, the IT industry finds itself in a period of recession, yet the demand for highly qualified professionals remains high. The competition for top IT talent is even fiercer now, which makes employee retention a critical challenge for IT managers, HR, and business leaders. In this economic climate, it is more important than ever to develop effective retention strategies that keep top IT talent engaged, motivated, and committed to their company's mission, even when budgets are tight.
One of the most impactful factors in employee retention is the cost of turnover. According to a study by the professional HR membership association called Society for Human Resource Management, the average cost of losing a single employee is estimated to be around 21% of their annual salary. This cost includes recruitment, hiring, and training expenses, as well as the loss of productivity and the impact on morale.
To minimize outlay, experts recommend developing strategies to retain businesses' top talent as well as keep their employees engaged and motivated.
1. Foster a Culture of Professional Development and Growth
In today's fast-paced IT industry, top talent is constantly seeking new opportunities to expand their skills and knowledge. IT managers should create a culture of professional development and growth by offering training programs, mentorship, and opportunities for career advancement.
There are three types of career advancement:
- Vertical. It is career growth within the same company. For example, an employee applies to the position of Junior .Net Developer and grows to the Senior level.
- Diagonal. It is the transfer of a specialist to a new company with a higher position than at the previous place of work.
- Horizontal. Moving to an alternative position with a pay increase or expanding competencies and expanding the scope of one position. For example, moving from QA Engineer to DevOps Engineer.
According to business consultants from PWC, for 52% of millennials, the possibility of promotion in a career is even more important than the level of salary. Regular performance evaluations and clear career paths help top talent see a future with the company, staying motivated to achieve their goals.
Large businesses such as McKinsey & Company compensate employees for the cost of courses directly related to work. And some of them — for example, Starbucks is offering team members up to $1,000 in annual tuition.
Tip: experts recommend paying 50% of the cost of training. This increases the likelihood that the employee will complete the course. You can also sign an agreement with a person: if after training a tech expert quits within a year, he will have to return the cost of the paid course. This is a guarantee that you are preparing specialists for yourself, and not for competitors.
2. Offer Competitive Compensation and Benefits Packages
Top IT talent is in high demand, and compensation is often a deciding factor in whether they stay with a company or not. Regularly monitor the salary market. For example, in IT, salaries grow on average by 5–20% per year.
In addition, build a transparent grading system. It will become a visual instruction that will allow employees to know what needs to be done to get promoted.
IT managers also offer bonuses, and benefits packages to attract and retain top talent. This includes health insurance, paid time off, flexible work arrangements, and other perks that show employees that their well-being is valued.
For example, Salesforce gives each employee $1,000 annually to support a charity project and pays 6 days a year to volunteer. And at Google, each employee can devote one day a week to side projects. Thanks to this, Gmail and AdSense were created.
3. Create a Positive Work Environment
A positive and supportive work environment is crucial for employee retention in the IT industry. IT managers should encourage teamwork, open communication, and a culture of respect and collaboration. A positive work environment can also be enhanced by flexible work arrangements, remote work options, and opportunities for work-life balance.
According to Glassdoor, a company's culture, and values were found to be the second most important factor in job satisfaction, just behind "career opportunities."
What's more, Harvard business school professors John Kotter and James Heskett spent 10 years analyzing the performance of 207 top companies and the impact of internal culture on their economic performance. Scientists have concluded that organizations with a well-formed corporate culture and positive work environment are 20–30% ahead of their competitors.
4. Recognize and Reward Top Performers
Recognizing and rewarding top performers is a simple and effective way to keep top IT talent engaged and motivated. IT managers should establish a system for recognition and rewards that incentivizes employees to continue performing at their best.
5. Encourage Employee Input and Involvement
Top IT talent wants to be a part of something meaningful and important. Managers can create a sense of purpose and belonging by encouraging employee input and involvement in company initiatives as well as decision-making processes. By empowering employees to contribute to the success of the company, they will feel more connected to the organization and be more likely to stay.
Retaining top IT talent in 2023 requires a strategic and proactive approach. IT managers, HR specialists, and business leaders must work together to create a work environment that supports employee development and growth, offers competitive compensation and benefits, and fosters a positive and supportive culture. With these retention strategies in place, organizations can secure their future success in the dynamic and rapidly changing IT industry.