While tech layoffs dominated news headlines last year, in a turn of events, companies now struggle to find qualified workers amid the shrinking tech talent pool. Today, the demand for tech talent significantly exceeds the supply, with the US Bureau of Labor Statistics predicting that this talent shortage in the software development field will increase to 1.2M by 2026.
Even if organizations manage to edge out competitors and attract the most sought-after employees, they still face the exhausting task of retaining those individuals. A recent 2023 survey from Gartner found that 73% of CIOs are worried about IT talent attrition, revealing that the battle for talent doesn’t end after they accept the offer letter.
An American company specializing in software engineering services conducted a report in partnership with a global insight-driven research company to discover why so many companies struggle to maintain their tech talent and what changes they need to make to foster sustained growth.
This report interviewed over 900 senior leaders from technology, digital, data, product, and people (learning, HR, and talent acquisition) departments spanning nine countries and twenty industries. Below are some of the most pertinent insights for HR professionals.
Why Companies Struggle to Retain Tech Talent
A mere 13% of the HR and technology leaders surveyed expressed satisfaction with their existing talent development and retention strategies. For hiring, only 11% of leaders were satisfied. While HR and technology leaders are undoubtedly aware that their current approach to recruiting and retention isn’t working, many aren’t sure why their most skilled employees continue to leave despite having access to people-focused initiatives and programs.
This report gets to the heart of the matter, revealing why technologists leave an organization. Interestingly, people leaders and IT teams could not agree on which reasons carried the most weight. However, the survey does note that the three most cited reasons were frustrations with tooling, micromanagement and bureaucracy, and dissatisfaction with technology delivery processes. Other reasons for resignations included a lack of control over workspaces and processes and a lack of training opportunities.
These listed reasons for technologist attrition create more problems that further exasperate hiring and retention efforts. Consider that, according to Gallup, it can cost one and a half to two times the price of a lost employee’s salary to hire and train a replacement. At the same time, excessive turnover can cause project delays, decrease morale, and harm a business’s ability to innovate. Likewise, the inability to hire and retain talent will eventually degrade brand reputation, resulting in additional difficulty in attracting qualified talent and industry leaders.
Moreover, these challenges deter innovation and growth. HR departments must find, onboard, train, and develop new technologists while IT teams work to rectify tooling, process inefficiencies and optimize technology stacks and workflows. These efforts, though essential, siphon energy and resources from innovation and growth-focused projects, ultimately hindering a business’ ability to compete effectively in the larger tech landscape.
Best Practices to Boost Hiring and Retention Success
Although the tech talent shortage is no small matter, not everything is doom and gloom. The report does propose multiple strategies organizations can employ to attract the best talent and ensure they stay through proper development and upskilling programs.
Businesses can attract qualified tech workers by giving job-seekers a unique and easily identifiable value proposition. HR professionals should showcase what sets their company apart from competitors, whether ample opportunities for growth, diversity of projects, commitment to healthy work-life balance, or other benefits like health and disability insurance or remote work options.
HR leaders should also build a robust governance framework. Such a framework will ensure that hiring, development, and recruitment strategies are constantly evaluated and adjusted to match emerging needs. Likewise, HR teams should set transparent and agreed-upon goals, implementing technology to track those objectives and provide real-time insights to decision-makers.
As for retaining technologists, the report suggests that HR leaders encourage IT and engineering leads to ask their employees what they need to optimize their skills. Why are you frustrated with current tooling and processes? Do you feel micromanaged? What changes would you like to see? HR can further assist technology leaders by creating questioners, feedback sessions, surveys, and interviews to compile findings quickly and in an official manner that articulates technologists’ needs and expectations.
Another helpful strategy for improving retention is to emulate those organizations (even outside one’s industry) with strong and vibrant technology cultures. Note what these companies do well and where emulation is possible, then present these findings to decision-makers.
Finally, HR leaders should work with relevant departments to establish specialized career paths for technologists. Talented employees will stay at organizations if they see opportunities for upward mobility and management positions. To that end, companies can provide mentoring programs to help junior-level technologists refine and hone their skills.
Improving the Disconnect Between HR and IT Leadership
Perhaps the most illuminating finding of the report was the misalignment between HR and IT leadership regarding talent lifecycle management. Recall that there wasn’t agreement on why technologists leave organizations; likewise, HR and people leaders expressed that they didn’t feel like equal partners in developing, retaining, and hiring technologists. Businesses must improve this disconnect to survive the coming years of tech talent famine. As such, HR professionals should advocate for collaboration and shared objectives, as well as a single, unified vision for tech talent management.
Dr. Sandra Loughlin is a learning scientist and organization change expert. As Head of the Client Learning & Talent Enablement Practice at EPAM Systems, Sandra is responsible for integrating EPAM’s many internal and external educational activities under one umbrella and ensuring that they reflect the latest advances from the learning sciences. Prior to her work at EPAM, Sandra held faculty appointments in colleges of business and education at the University of Maryland and advised several edtech startups. She holds a PhD in educational psychology and learning analytics from the University of Maryland and a master’s in education from Harvard University.