People & Culture
6 minute read

What is the unspoken Achilles heel of tech business?


The tech industry has a higher attrition rate than any other sector. Retaining top technical talent is notoriously difficult. But there are some steps businesses can take to keep your tech people happy for longer.

The employee turnover rate in the technology sector currently stands at around 13.2%, placing it higher than any other sector[1]. When surveyed, tech employees give a variety of reasons for moving on to other roles, but the most common are:

  • Seeking higher compensation

(The Dice Tech Salary Report found this to be the reason given by over 70% of departing tech staff[2].)

  • Better working conditions
  • More responsibility 
  • The opportunity to express more creativity

What can businesses do to retain top tech talent?

Looking at the Dice survey results, the obvious answer would be to pay through the nose. Tech employees know that they are valuable and in demand, and expect appropriate compensation. If you don’t pay, they won’t stay.

However, this solution doesn’t seem to bear out in reality. Even the top paying tech recruiters like Tesla and Google report an average tenure of just 1 - 2 years[3].

So, if you can’t bribe them to stay, what can you do?

We’d suggest that you take a close look at your employee experience and optimise for retention across the entire employee journey. Here’s how:

Before hiring

1. Screen for values fit. 

If you recruit the right people, then they should be keen to stay with you for longer. In particular, if you find people who are a great values fit  for your company, they are more likely to be happy working with you. After all, research has found that if people feel that their work is meaningful , it is more motivating than financial rewards.

How do you check for values fit?

  • If you haven’t done so already, then start by clearly the values that our organisation aspires to. Your values can be expressed as your company mission and vision - your “Why” - but can also be seen in the behaviours you want to see, the ways that you aim to make decisions, and your priorities.

Once you’ve established what your values are, design interview questions that aim to elicit the candidates’ own values and screen for high levels of correlation.

2. Spend the day together.

Invite your final candidates to spend a work trial day  working on a project with their potential future team mates. Check to see if the chemistry works, if the candidate fits into how the team works, if they collaborate comfortably with others.

This should help you to understand if the impression you gained at interview is borne out by reality. It also gives the candidate a chance to decide if they really want to be part of your business, before they make the move.

3. Improve your onboarding process.

Update your onboarding to make every new hire feel like a critical part of the organisation. You can find our suggestions on how to create greater engagement during the onboarding process, even if you’re working remotely, over here.

Once they start work

  • Make sure you put your money where your mouth is.

Too many companies fall into the trap over overselling a job role during the recruitment phase. Then, once they find a great candidate to fill that role, all the exciting projects and cool tools promised at the interview suddenly evaporate. It’s no surprise that the candidate decides to move on as quickly as possible.

To avoid this, keep a close eye on the opportunities for challenging and stimulating work being offered to all employees, especially those at risk of a speedy exit. Make sure that you provide plenty of chances for employees to give feedback on their job satisfaction. Use an employee experience platform like Learn Amp to create individual learning pathways which include demanding “stretch goals” to channel your tech talents’ curiosity and ambition. 

  • Offer clear opportunities for advancement.

Top tech employees will be looking for the next great job as soon as they join your company. Make sure that they can see the chance to do that job without leaving. The typical path of progress from developer, to senior developer, and finally into a management role may not work for today’s ambitious tech talent.

Instead, create smaller, incremental career development markers tied to greater responsibility and autonomy or increasingly challenging and innovative projects, as well as small pay rises.

Rethink your strategy

As well as improving retention rates by optimising your hiring, onboarding, learning and development systems, you might also want to bear in mind that employee attrition isn’t always such a bad thing. After all, even Google has an average 1.1 year tenure, and they seem to be doing OK!

Research has found that while high retention rates are good, 100% retention actually damages performance. The researchers put this down to the beneficial impact of “positive friction,” as new employees join the team bringing in fresh ideas, high energy levels and a reduction in group think.

The key to dealing with high turnover in your tech teams is to adjust your strategy and expectations to reduce its impact:

  • For starters, build a strong knowledge management process to stop the best ideas walking out the door when employees leave.
  • Consider the impact on key account management. For instance, always have more than one tech team member dealing with a particular client - that way, if they leave, the other tech employee can step into the breach easily.
  • Develop a formal offboarding process that addresses the turbulence created when team members leave and recognises the contributions made by the exiting employee. After all, you never know - they might decide to come back again!

In sum, while you can’t eliminate attrition of tech employees, you can mitigate the impact on your business by accepting it as a reality of the tech sector. Meanwhile, by improving your employee experience at every step of the way, you will increase engagement and retention for all your employees, not just your technical talent.

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