How to retain IT employees in 2021
Recently there have been articles about the massive exodus of employees, especially in the IT sector. According to various sources 1, 2 more than half of IT employees consider changing jobs. Other indicators also point to this trend: over the last ten years, until 2019, the number of employees leaving has steadily grown 3. During the pandemic, the increase stopped. Moreover, the number dropped slightly; this happened probably due to a well-known psychological phenomenon: people are less likely to commit to significant changes in uncertain times. However, the pandemic situation seems to be coming back under control, and employees are beginning to consider what to do next.
Another factor that adds to this is the massive increase in e-services during the pandemic period. The COVID-19 disease epidemic acted as an accelerator on the labor market. Researchers estimate there has been a two to five-fold increase in e-commerce over the past year. 4 With this has also come a greater demand for developers. During a workshop on finding and retaining talents at the B2B software days conference, I recently learned about the shortage of 100,000 IT professionals in Austria alone. And in the neighboring countries, it’s similar!
During the pandemic, companies learned that an employee doesn’t need to be physically present in the workplace to function effectively. 5 HR officials report that some companies did not meet their employees in person for months during the shutdown period. Even the whole recruitment process was conducted online at many places. Companies could also test the flexibility of working hours without much risk in a situation where governments supported them with various job retention programs. So now they are much more willing to recruit even part-time workers.
Nowadays, companies are no longer afraid to recruit from abroad, offering remote work and actively trying to reach employees worldwide. On top of that, they are attracting them by providing flexible working hours. How to compete? What should you focus on to retain critical employees?
In employee experience research, financial reimbursement and recognition ranked among the most critical factors for employee retention. 6 However, experience shows that financial motivation itself is not enough. Salaries in IT are generally well above average, and therefore slight salary increases often have little effect on retention. Moreover, with the possibility of teleworking, there seems to be migration of employees from financially costly metropolitan areas to quieter rural areas, thus significantly reducing their cost of living. And this, in turn, may profoundly impact the importance workers will attach to financial rewards in the future. 7
But instead of money, another recognition, often a simple “thank you,” can work much better. If a manager knows what the team has achieved and can point it out appropriately, it increases employee engagement and productivity. Up to 40% of employees report that their manager only gives them the usual “ok” for their work. 2 We all need an appraisal from time to time; only a few of us can perform well over the long term without external reinforcement. After all, we build our self-image based on the reactions of those around us, and, especially at a younger age, external support is crucial.
Another item that regularly ranks very high in employee experience surveys is the opportunity for growth. 8 Everyone wants to get better, to grow. To become the “best possible self,” as humanistic psychologists describe it. Or, if we look at it through the lens of behavioral psychology, growth is simply an essential response to ever-changing external conditions. To cope with the constant change of the environment, we need to develop, learn new things, and acquire new skills.
Of course, companies have multiple training programs and courses. But the most significant growth usually happens when employees have the opportunity to work with more experienced colleagues. The experienced employee serves as a role model that the junior employee would like to grow up to someday. In IT companies, however, experienced professionals are often overworked. They are responsible for more tasks than they can complete by themselves, often responsible for multiple projects at once. Unfortunately, they don’t have the time to influence their colleagues consciously, but doing so could free up their hands and reduce overload in the long run.
If employees meet at work at least occasionally, the employer has one huge advantage. It is a sense of belonging. We all need to belong somewhere, to be a member of a group. To have mutual experiences, to share them with others. We strive to become a part of a whole. And that can be pretty difficult, if not impossible, in remote work, although companies are trying to do so these days. (For example, by hosting video conferencing parties and informal remote meetings.)
When there is a good team in the workplace, employees can quickly get through any complicated situations. Thanks to the support of their colleagues, they can handle the difficulties they encounter at work. However, a good team does not form on its own. You have to create conditions that facilitate relationships, such as a joint activity or a common goal. (A sense of belonging can also develop when resisting a common enemy, but this is not a wise solution in a corporate environment). Relationships are generally much easier to form in situations where emotions are involved. Thus we can help them a little through experiential programs.
So what is the recipe for employee retention in 2021? Work with lower management and lead them to motivate employees. Focus on more experienced employees, free them up to learn how to consciously adopt a role model, and use it to influence less professional colleagues. Arrange for employees to work together at least once a week, even if they mostly use telecommuting. And don’t forget to create the right conditions for strong social bonds to form.