Gartner’s Technology Growth and Innovation Conference is quickly approaching, and we will be taking a close look at the technology talent market. In addition, we recently published our first U.S. Product Manager Talent Market Report, 1H22 . As part of this effort and in the light of the “great resignation”, let’s explore it and Gartner’s April 2022 Global Labor Market Survey.
Technology employees have always outpaced other sectors in terms of turnover. However, what was once a consistent 27% of tech employees actively looking for new roles has crept up 7% since Q1 2019.
Talent Leakage, Everyone is Talking About It
If you’re experiencing turnover and you’re not talking about, it’s a guarantee your employees are around the water cooler (virtual water cooler for some)
If they are the ones picking up the slack, they are probably wondering what you plan to do about this growing concern.
So, it’s time to get granular in understanding the why behind the “great resign”. Tech leaders must be ready to move to an Employee Driven Value Proposition, and use this data to map out what matters most in retaining talent.
It’s About the Money & the Miles
Prior to 2020, tech employees rated their willingness to leave on compensation, friendly work environments, or the prospect that another organization would offer more talented colleagues. The only exception was compensation, which had only gained momentum. These days, an organization’s culture matters slightly less. This is particularly true for remote employees, who say that maintaining work–life harmonization, pay, and flexibility in location are top factors. However, several career-level dynamics remain at play in the tech labor market.
To retain talent, tech companies must drill into why employees are leaving by career level and plan surgical approaches to retention. There are some reasons we have seen the climb, but the identification of the top reasons range from wanting to start their own business, retirement, and flat-out work experience dissatisfaction.
With mid-level career employees leading the charge to resign, the internal pipeline to replace senior-level employees is at risk. Now, 36% of senior-level tech employees who stated that they intended to leave jobs this year are doing so to retire. Another 27% said they were dissatisfied with their work experience.
When asked if only one factor changed, would you leave your current organization:
- 65% said they would leave if the only thing that changed was a 15% increase in salary.
- 68% said they would leave if the only thing that changed was an opportunity for more professional development opportunities.
- 70% would leave if all other factors were the same, but the position was perceived to be a more senior position.
With 75% saying that they feel somewhat too extremely confident in their company’s ability to succeed, 32% of mid-level tech employees said they plan to leave their current employer in April.
Perhaps the starkest difference between senior-and mid-level employees is the need for increased flexibility, how they work, what they work on, and where they work. No doubt, location flexibility has climbed as a top employee value proposition, but those companies thinking of adjusting pay based on cost of living might want to press the pause button on that idea. With inflation surging at 7–8%, raises are stagnant at 2–4%, and mid-level employees who might have taken a pay cut for more flexibility are quickly finding employment opportunities elsewhere for increased pay. Also, 65% said they would leave if the only thing that changed was a 15% increase in salary.
However, other factors top the list with mid-level employees were asked to identify their top reasons:
- 65% would go if the hiring organization had a better work–life balance.
- 58% would leave if the only thing that changed was if the company was perceived to be more socially responsible.
- Surprisingly, one out of five with the strongest intention to leave reported doing so to start their own business. Begging the question is time to invest in and incubate and harness your employees entrepreneurial spirit?
- 41% of mid-career employees who left said their workload was too heavy, with some employees who had already left pointing to not being able to take time off.
With the highest intent to leave their current organization at 41%, entry-level employees at tech companies seem to feel the most burned out, and continuing education was the top reason for entry-level employees to leave their existing employer. A deeper dive revealed that entry-level employees felt that they were not being adequately supported for continued professional development at their existing employers.
Other factors impact entry level tech employees’ desires to leave:
A little over half felt that their current employer offered too few internal opportunities. Also, 67% said they would leave for a better work–life balance and a closer look revealed of those who left for another organization, our Q1 2022 GLMS Survey reveals the top five reasons for attrition:
- 42% said that greater compensation was among their top five reasons for leaving.
- One out of four who left their existing employer was dissatisfied with location options.
- 23% left for more development and training.
- On par with mid-level employees, 23% left due to the quality of their managers.
- Rounding out the top five, a need for greater employer respect came in fifth.
Constructing Employee Driven Value Proposition
Tech companies must look more granularly at their attrition trends to redevelop an employee driven value proposition. Key ingredients for a success model include, flexible location, addressing compensation concerns transparently, and retaining mindshare by expanding employee development options. Finally if you’re not talking dollars it may not be make sense. Cookie cutter approaches will not help you keep your most valuable resources, your people.