Technology employees have always outpaced other sectors in terms of turnover.
However, what was once a consistent 27 per cent of tech employees actively looking for new roles has crept up 7 per cent globally since early 2019.
If you’re experiencing turnover and you’re not talking about it, it’s a guarantee your employees are around the water cooler (virtual water cooler for some).
If they are the ones picking up the slack, they're probably wondering what you plan to do about this growing concern.
So, it’s time to get granular in understanding the why behind the “great resignation”.
Tech leaders must be ready to move to an employee-driven value proposition, and use this data to map out what matters most in retaining talent.
Prior to 2020, tech employees rated their willingness to leave on compensation, friendly work environments, or the prospect that another organisation would offer more talented colleagues.
The only exception was compensation, which had only gained momentum.
These days, an organisation’s culture matters slightly less.
This is particularly true for remote employees, who say that maintaining work-life harmonisation, pay, and flexibility in location are top factors.
However, several career-level dynamics remain at play in the tech labour market.
For talent retention, tech companies must drill into why employees are leaving by career level and plan surgical approaches to retention.
There are some reasons we have seen the climb, but the identification of the top reasons includes wanting to start their own business, retirement, and flat-out work experience dissatisfaction.
With mid-level career employees leading the charge to resign, the internal pipeline to replace senior-level employees is at risk.
Now, 36 per cent of senior-level tech employees who stated that they intended to leave jobs this year are doing so to retire.
Another 27 per cent said they were dissatisfied with their work experience.
When asked if only one factor changed, would you leave your current organisation:
· 65 per cent said they would leave if the only thing that changed was a 15 per cent increase in salary.
· 68 per cent said they would leave if the only thing that changed was an opportunity for more professional development opportunities.
· 70 per cent would leave if all other factors were the same, as the position was perceived to be a more senior position.
With 75 per cent saying that they feel somewhat to extremely confident in their company’s ability to succeed, 32 per cent of mid-level tech employees said last month that they plan to leave their current employer.
Perhaps the starkest difference between senior-and mid-level employees is the need for increased flexibility, how they work, what they work on, and where they work.
No doubt, location flexibility has climbed as a top employee value proposition, but those companies thinking of adjusting pay based on cost of living might want to press the pause button on that idea.
With inflation surging and raises stagnant, mid-level employees who might have taken a pay cut for more flexibility are quickly finding employment opportunities elsewhere for increased pay.
Also, 65 per cent said they would leave if the only thing that changed was a 15 per cent increase in salary.
However, other factors top the list when mid-level employees were asked to identify their top reasons:
· 65 per cent would go if the hiring organisation had a better work-life balance.
· 58 per cent would leave if the only thing that changed was if the company was perceived to be more socially responsible.
· Surprisingly, one out of five with the strongest intention to leave reported doing so to start their own business, begging the question: is time to invest in and incubate and harness your employees’ entrepreneurial spirit?
· 41 per cent of mid-career employees who left said their workload was too heavy, with some employees who had already left pointing to not being able to take time off.
With the highest intent to leave their current organisation at 41 per cent, entry-level employees at tech companies seem to feel the most burned out, and continuing education was the top reason entry-level employees wanted to leave their existing employer.
A deeper dive revealed that entry-level employees felt they were not being adequately supported for continued professional development at their existing employers.
Other factors impact entry level tech employees’ desires to leave:
A little over half felt that their current employer offered too few internal opportunities. Also, 67 per cent said they would leave for a better work-life balance and a closer look revealed of those who left for another organisation, our Q1 2022 Global Labour Market Survey reveals the top five reasons for attrition:
1. 42 per cent said that greater compensation was among their top five reasons for leaving.
2. One out of four who left their existing employer was dissatisfied with location options.
3. 23 per cent left for more development and training.
4. On par with mid-level employees, 23 per cent left due to the quality of their managers.
5. A need for greater employer respect came in fifth.
Constructing an employee-driven value proposition
Tech companies must look more granular at their attrition trends to redevelop an Employee-Driven Value Proposition.
Key ingredients for a successful model include:
· flexible location
· addressing compensation concerns transparently
· retaining mindshare by expanding employee development options
· including sabbaticals for employees looking to continue their education
Finally, if you’re not talking dollars, it may not be making sense.
Cookie cutter approaches will not help you keep your most valuable resources – your people.
Barika Pace is Senior Director Analyst at research firm Gartner.