There’s a disconnect in the tech industry
The technology industry is booming, from social media, block chain, virtual reality and everything else in between. And while good news stories about the tech sector abound it’s not all positive, with many companies particularly struggling to maintain staff morale and experiencing a high staff turnover.
The software side of the technology industry has the highest rate of staff turnover compared to any other industry which is alarming considering it is one of the largest sectors of growth in many countries. This turnover is not due to the individual disliking the industry or their role but rather disliking the company and work culture. Research conducted by LinkedIn suggests that 49% of departing staff move to another job within the tech sector with further research suggesting this is due to competitive packages being offered to individuals to swap jobs. With some reports showing that certain game developers their have staff working between 70 and 100 hours for consecutive weeks and months it comes as no surprise that the turnover within that industry segment is 15.5%. Such a lack of work life balance means staff are going to look around for opportunities.
What’s wrong with having a high turnover?
Turnover is normal, to an extent, as people move jobs for many different reasons but it becomes worrying when it is particularly high or people are moving for the wrong reasons such as burnout or a toxic work environment. Turnover is expensive too with an entry level individual leaving costing a company 50% of their salary, for more senior or technical individuals this can get bumped up to 125% which is a lot especially for smaller organisations. (For example an intern gets paid €25,000 a year it will cost a company €12,500 to replace them due to loss of revenue, loss of output, retraining etc. More senior staff such as an executive who gets paid €50,000 a year will cost €62,500 due to their skills being a lot more beneficial to the company).
High turnover can lead to negative word of mouth which can really affect an organisation’s ability to get top talent new hires because why would anyone want to work for a company with a bad reputation?
How do I stop turnover?
Unfortunately, there’s no quick fix but there are steps you can take to reduce a high turnover of staff. Many who left companies felt there was no career progression available to them. This is great base information for any company to start with. Sit down with staff at regular intervals to discuss where they are at the moment and where they can be in the future. Providing general timescales for achievement can also prove beneficial at it gives staff something to aim for. This step is relatively small but can be worth its weight in gold as staff feel their efforts are recognised.
Look to hire internally rather than externally. This ties in with the point above, if staff believe see that the company actively recruit within rather than bringing in people from the outside they are much more likely to believe in themselves and their ability to progress in their career.
Invest in improving your employees’ skillset. It allows your employees to become better team members and the organisation also benefits from new skills being applied in the workplace allowing for better practices which can increase profits, improve efficiency and lead to an overall improvement in workplace culture.
If you need industry leading consultancy services provided by experienced experts contact us at ReganStein today to see what we can do for you.