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How to lower tech company turnover rate

How to lower tech company turnover rate

The tech industry is notorious for high-stress environments that lead to higher-than-average turnover rates. Some research suggests it has the lowest employee retention rate of nearly all industries today. Studies show that tech turnover can range from 13% to more than 18% and that even well-known, established, innovative, and profitable global tech companies struggle to retain top talent. 

A high employee turnover rate impacts companies negatively — from affecting your bottom line to damaging morale and decreasing productivity. Having a revolving door of employees due to poor employee retention can significantly hamper your ability to grow or enhance brand recognition and consumer trust — both critically essential areas in the world of tech. 

Technology is a unique industry. It often demands long hours, round-the-clock production, and a constant push for innovation and creativity that’s emotionally and physically taxing. It’s no wonder, then, that people are more willing to leave their jobs, either because of burnout or just in search of new, better opportunities. Despite the industry’s many challenges, lowering your tech turnover rate is possible — keep reading to learn how you can do so in your organization. 

Keeping people long-term can help you surge past your competition while positively impacting your revenue, brand recognition, and reputation.   

What is the average turnover rate in the tech industry?

The tech industry turnover rate is higher than almost any other sector in business. Some research suggests that tech turnover is 13.2%. Other studies returned an even higher employee turnover rate — 18.3%. Fortunately, tech brands don’t have to stand idle, watching talented personnel walk out the door. The right employee retention strategies and best practices can keep your company both innovative and competitive, with a loyal team who believes in you and your brand. 

Causes of high turnover in the tech industry

Across the board and nationwide, the technology sector sees higher attrition rates than other industries. Over half of respondents in one survey (53%) reported quitting their tech company job in 2020. The same poll found that more than 3 quarters (76%) of leaders at tech companies expect the trend to continue. 

To effectively reduce the tech turnover rate in your organization, you must explore why people are leaving in the first place. From the competition luring talent away to a culture of burnout in tech or poor management and leadership, addressing the many possible links to a high turnover rate can be a game-changer.

High demand for tech talent

The demand for tech talent is indisputable. Research conducted by Korn Ferry suggests the need will surge so quickly that by 2030, the global shortage of human talent could reach more than 85 million people. With demand this high, tech workers will have no problem finding a job that pays more, requires less, and offers superior benefits, making leaving their job a no-brainer.  

Burnout and work-life imbalance

A recent Gallup report surveying almost 7,500 full-time employees found that nearly a quarter (23%) feel burned out “very often or always,” and a whopping 44% more feel burned out “sometimes.” That same report also discovered employees who experience burnout are 2.6 times more likely to leave their jobs. 

Studies show a direct link between poor work-life balance and high rates of burnout, which we know contributes to turnover. In the American Psychological Association’s (APA’s) 2023 Work in America Survey, more than half of respondents (52%) say working for a company that prioritizes emotional well-being is “very important.” Another 61% believe it’s “very important” that their company respects boundaries around personal time.   

Lack of career advancement opportunities

The APA’s 2023 Work in America Survey shows an astonishing 91% of employees rate working for a company that offers prospects for advancement and learning as “somewhat or very important.”

Nobody wants to feel stagnant in their role at work. Offering clear, achievable opportunities for advancement can help you avoid losing the team you so carefully curated. Simply put, people will go where the opportunity for growth exists. 

Inadequate benefits

Benefits are a huge part of job satisfaction, and today’s workforce is looking for more than just a competitive salary. In fact, a healthy benefits package is considered “very important” to 60% of employees surveyed in a recent SHRM report.

Poor company culture & management

Toxic tech culture and poor management or leadership can have dire effects on tech companies, leading to decreased productivity and higher turnover rates. 

PayScale’s Retention Report surveyed more than a half million workers and found that 22% consider poor workplace culture to be a leading cause of attrition — and a 2022 study found that toxic leadership harms several areas of an organization, including an increase in turnover, job dissatisfaction, burnout, and anxiety. 

The desire for remote positions

The ability to work remotely offers many benefits, including higher job satisfaction, better work-life balance, and happier employees who don’t spend as much time commuting. Overwhelmingly, companies that offer remote positions say they can attract and retain top talent more easily. 

More than half of the 5,600 employees surveyed in a FlexJobs report (56%) say the option to work remotely, either all or part of the time, could improve their mental health and lead to increased job satisfaction and longer tenure with their employer.  

Rapid industry changes

The tech industry is synonymous with change, and staying ahead of rapidly evolving technology is critical to any tech organization’s success. 

Those driven to work in tech often have a passion for finding the next big thing, and many are more than willing to leave a company for an opportunity to be at the cutting edge of innovation. 

7 Tips for lowering the tech turnover rate

If your tech talent is leaving for new opportunities, the following strategies can help. Implement these tips to invigorate your workforce, effectively reduce attrition, build company morale, and increase productivity and revenue in the long run.

1. Offer competitive and performance-based rewards

The first tip is a no-brainer. Offering competitive and performance-based rewards helps keep employees motivated and more willing to stay with your organization.  

2. Address burnout with work-life balance initiatives

An extremely effective way to prevent employee burnout in any organization is by creating an environment that fosters work-life balance for employees. Tech talent is often expected to perform at peak levels, working long shifts and late nights, sometimes with minimal breaks. Encouraging downtime and boundaries and prioritizing mental health can greatly increase employee satisfaction and reduce tech turnover. 

Offering convenient and affordable therapy for tech employees will ensure employees feel supported and valued.

3. Promote internal mobility and career progression

Opportunities for internal mobility and career growth can be compelling reasons people stay with a tech company. It’s a win-win, too. Those eager to advance their career are thrilled to have the chance to grow professionally, and you get to retain your best people. 

4. Cultivate a culture of innovation and creativity

Employees who feel their ideas and suggestions are valued are more likely to stick around. Encourage your team to think outside the box by establishing a workplace culture that respects creativity, innovation, and risk. Implement things like hackathons, side project opportunities, and a safe space for experimentation, even if it means occasional failure. 

A great example is Google’s “20% Project,” which encourages people to spend up to one day a week working on personal projects. 

5. Implement remote and flexible working models

If anything positive came out of the pandemic, it’s that we found new ways of working that benefit employers and employees alike. 

Allowing flexible schedules and remote work environments helps people manage their time, reduces stress and anxiety that can lead to burnout, and provides a sense of autonomy that fuels overall well-being. 

Some studies have found that companies that offer remote options see benefits like increased productivity, reduced turnover, and improved mental health in the workplace.  

6. Enhance skill development and technical training

When you’re in an industry that moves as fast as technology, you simply can’t afford not to invest in keeping your people at the forefront of innovation. Continuous learning and development opportunities keep your team sharp and ensure your company is ahead of the highly competitive tech curve. 

7. Leverage advanced HR analytics for retention insights

Human Resources analytics can be incredibly valuable in helping you understand why people might be leaving – or staying. 

Use the information you garner via regular surveys and polls to determine what you’re getting right (so you can double down on those tactics to keep your people happy) and where you have areas of opportunity to improve (so people are more likely to stay with your organization). 

Invest in retaining your employees with Talkspace

Recent global studies show that 2 out of 5 tech employees are at risk for burnout. Worse, nearly half of them (42%) are considering quitting their jobs within 6 months. You can help your workforce learn to manage stress, set professional boundaries, and take control of their job satisfaction so they stay with you longer by offering online therapy for employees with Talkspace. 

Talkspace makes it easy for tech companies to invest in mental health organization-wide, so you can reduce tech turnover rates while seeing your team thrive.    

 

Sources:

  1. Petrone, Paul. “See the Industries with the Highest Turnover (and Why It’s so High).” LinkedIn, March 19, 2018. https://www.linkedin.com/business/learning/blog/learner-engagement/see-the-industries-with-the-highest-turnover-and-why-it-s-so-hi.  
  2. “Tech Tactics: Employee Retention Strategies.” Trickle, August 17, 2021. https://trickle.works/blog/tech-tactics-employee-retention-strategies/.  
  3. Davis, Claire. “Future of Work: Series Introduction.” ICONIQ, December 14, 2021. https://www.iconiqcapital.com/growth/insights/future-of-work-series-introduction.  
  4. Franzino, Michael. “The $8.5 Trillion Talent Shortage.” Korn Ferry, July 26, 2021. https://www.kornferry.com/insights/this-week-in-leadership/talent-crunch-future-of-work.  
  5. Wigert  , Ben, and Sangeeta Agrawal. “Employee Burnout, Part 1: The 5 Main Causes.” Gallup.com, July 12, 2018. https://www.gallup.com/workplace/237059/employee-burnout-part-main-causes.aspx.  
  6. Boamah, Sheila A., Hanadi Y. Hamadi, Farinaz Havaei, Hailey Smith, and Fern Webb. “Striking a Balance between Work and Play: The Effects of Work–Life Interference and Burnout on Faculty Turnover Intentions and Career Satisfaction.” International Journal of Environmental Research and Public Health 19, no. 2 (2022): 809. https://doi.org/10.3390/ijerph19020809. Accessed January 2, 2023.  
  7. “2023 Work in America Survey: Workplaces as Engines of Psychological Health and Well-Being.” American Psychological Association, 2022. https://www.apa.org/pubs/reports/work-in-america/2023-workplace-health-well-being.  
  8. Miller, Stephen. Better pay and benefits loom large in job satisfaction - shrm. Accessed January 2, 2024. https://www.shrm.org/topics-tools/news/benefits-compensation/better-pay-benefits-loom-large-job-satisfaction.  
  9. Starner, Tom. “Are ‘bad Bosses’ Really Driving Turnover? See What One Report Says.” HR Executive, June 8, 2023. https://hrexecutive.com/are-bad-bosses-really-driving-turnover-not-likely-says-one-report/.  
  10. Wolor, Christian Wiradendi, Ardiansyah Ardiansyah, Rofi Rofaida, Ahmad Nurkhin, and Mahmoud Ali Rababah. “Impact of Toxic Leadership on Employee Performance.” Health Psychology Research 10, no. 4 (2022). https://doi.org/10.52965/001c.57551. Accessed January 2, 2023. 
  11. “How Remote Work Has Impacted Employee Retention.” HCM Technology Report, December 13, 2022. https://www.hcmtechnologyreport.com/how-remote-work-has-impacted-average-employee-tenure/.  
  12. Howington, Jessica. “Exploring the Impact of Remote Work on Mental Health and the Workplace.” FlexJobs Job Search Tips and Blog, June 14, 2023. https://www.flexjobs.com/blog/post/exploring-the-impact-of-remote-work-on-mental-health-and-the-workplace.  
  13. “Who’s Working Overtime? Of the 46% of Workers with at Least One Additional ‘Side Hustle’:” State of Hybrid Work 2023 | US Report. Accessed January 2, 2024. https://owllabs.com/state-of-hybrid-work/2023. 
  14. “The State of Burnout in Tech: 2022 Edition.” BurnoutIndex by Yerbo. Accessed January 2, 2024. https://f.hubspotusercontent30.net/hubfs/7677235/The%20State%20of%20Burnout%20in%20Tech%20-%202022%20Edition.pdf.  

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