Employee Retention Strategy for IT Firms

A steady increase in the global employee turnover rate is becoming an issue of utmost concern to employers, human resource managers and associated experts. More threatening is the fact that employee retention poses to be highly difficult in the IT industry which has grown to become the focus or core of every innovation across all industry, thereby increasing the competitive demand for skilled workforce.

According to a 2020 report on labor turnover by the U.S Bureau of Labor Statistics, the total 2019 quits rates for all industries was 27.9%, which has steadily increased through 2015, when it was 23.7%. These figures are very significant, especially when the cost of turnover is put into consideration.

Large, medium and small scale enterprises or firms spends more in replacing the vacant position of an employee on whom a critical project is hinged, or one who has acquired the company-centered skills and effectively aligned with its business workflow.

For IT firms, companies or organizations; the cost of employee turnover is higher than most industries as its operations are innovation-bound and always associated with individual mental assets rather than routine-based operations. Hence, losing an employee is more of a deep cut in varying measures.

Causes of Employee Turnover in the IT Industry

Finding the cause of a significant employee turnover is the first step to be taken when considering the adoption of effective retention strategies or solutions. Hence, let’s look at the major reasons why employees quit their IT jobs.

  1. Low Pay and Benefits

The IT industry is characterized by intense competition and this includes employee salary offerings and other benefits. With so many startups, young employees – which constitutes majority of the workforce, are attracted to better offers, especially those with significant addtions.

2. Toxic Culture

A toxic working environment can lead to health breakdowns, fatigue or stress, declination of interests, and in some cases, depression, because there is little or no culture that prioritize employees welfare and personal lives. At the slightest opportunity, employees of such workplaces will quit their jobs to get a better life.

3. Poorly Managed Flat Organization

Flat Organization is a very important aspect of human resource management but unfortunately, it is poorly managed in the IT industry. A significant amount of employees have career targets and aspirations which could be duly satisfied with proper hierarchy or promotion structure at work places.

IT organizations are mostly flat structured and this has led to significant operational difficulties as disclosed by CareerFoundry, amongst other firms. Although there are advantages, the disadvantages of using a flat structure make a huge impact on employees, especially on those coming from a structured setting or have ambitions of ascending in roles or offices on a timely basis.

Once there are no standard metrics for promotion and specially designed levels of roles, employees will mostly regard such jobs as temporary while they scout for a more portfolio-friendly one.

4. No Development Program

Employees get bored doing the same thing the same way for a very long time, and this could lead to loss of interest in carrying out designated tasks.

The acquisition of recent skills is a serious quest for IT employees and other participants in the industry as it influences the professional value of the individual as time passes. Hence, the ability to acquire advanced knowledge or skills through another employer can be enough reason to quit a job that deprives or discourages such development.

5. Poor Branding & Treats

Don’t be surprised that poor or unsuitable branding can make employees look for jobs somewhere else, and most certainly leave for a company that makes them feel proud about where they work.

The manner in which employees are treated at professional outings could also go a long way in influencing their self-esteem and confidence as they represent their company. Therefore, ill-treated employees will have little or no desire to be part his/her company’s future, and will have to look out for a more-respected or organized company.

6. Bad Leadership

The word “Boss” is not quite pleasant to many employees due to the common characteristics associated with the title. The toughness, poor communication, insatiable requests, ever-increasing tasks, partial treatments and other unpleasant experiences are enough reasons to quit.

Strategic Steps toward Employee Retention

  1. Recruit Rightly

According a Glassdoor report, 37% of hiring decision makers say retention rates would increase significantly if new hires were better informed during the hiring process.

Transparency is very important when carrying out recruitment exercises as applicants would be more prepared for the tasks ahead instead of stumbling into daily difficult surprises.

Also, recruiters should lookout to avoid quitters by ensuring the applicant’s personal prospect aligns with the goals or objective of the company. This will help in creating a stronger connection between tasks and employees thereby, building a team of workforce that will see the company’s long term goals to the finish line.

2. Competitive Pay and Benefits

In a competitive industry as seen with IT, salary ranges are of high concern to job-seekers and employees, where experience and updated skills are sought by matured and unlimited number of Tech startups with competitive offers.

While some are comfortable with just a good salary, some other employees will stay longer if the company provides benefits especially health-related ones.

3. Healthy Culture

The ability to maintain a non-toxic working culture will leave employees in a happier and comfortable state, thereby making them enjoy every moment with each other and long for more days of working together. Hence, the thought of quitting will be far from such employees, rather, they will collectively work to build the company to heights that can afford them more benefits.

4. Appraisal & Appropriate Hierarchy

Employee efforts should be duly recognized with frequent well-calibrated appraisals. This will steer employees to be more connected to the firm and its goals, as well as maintain a steady supply of innovative suggestions.

It is necessary to give employees clear pictures of their career ladder irrespective of the hierarchical or organizational structure being used in a company. Also, these structures should be appropriately implemented with the help of professional human resource managers.

5. Professional Development

There is a need to officially expose employees to developments across their fields of operation, as well as provide them with motivations that will lure them to eagerly adopt new methods of carrying out their tasks.

6. Good Leadership

Nobody likes a bad boss and quitting the job could be the only way out. Don’t become or harness just a good boss instead, be or get a good leader, and your employees will wish to keep working with your company for a longer time.

Managers, Team leads and other senior employees should also be monitored and assessed appropriately to ensure that their subordinates are well treated.

7. Branding & Treats

Branding should not stop at custom wears, it should extend to social and corporate responsibilities which includes participation, sponsorship, promotion or support. Employees will be proud to be part of a life-impacting effort and may not want to stop anytime soon.

It is also very important that proper treats are arranged for employees when they are out on a professional assignment. This ranges from their welfare to the amount of resources they are granted access to, confidence will be built and cherished-moments will keep them attached to the company especially during difficult times.

Maintaining Low Employee Turnover Rate

Once a low turnover record has been achieved, it is still of utmost importance that companies continue in their research on Employee Retention Strategies, to stay abreast with new challenges and implementing precautionary measures in maintaining low turnover rates.

Also, artificial intelligence (AI) systems can be employed to monitor and study employee behaviors, giving insights on the tendencies of turnover and suggesting possible solutions to a significant extent.