As an industry, a 2021-2022 study showed that Information Technology had one of the highest rates of turnover of all industries surveyed. Several tech roles populate LinkedIn’s top 10 list of most in-demand jobs, including AI engineer, SAP developer (dealing with business optimization), and software engineer.
About 13% annual turnover is being seen in technology roles, which is above the average of 10.6% for that time period. This blog will provide actionable strategies to reduce IT turnover, allowing companies to retain as many workers as possible and avoid the need to fill positions that are proving very difficult.
The Cost of Turnover
Turnover has a number of costs for employers that must be considered. The biggest financial impact of IT turnover is the impact on serving clients and employee output, which is understandably reduced when there are fewer employees to shoulder the workload.
If the average IT team is around 10 workers, up to 10% of the team’s productivity will generally be lost for each team member that leaves the company. And even when a new employee is hired, it typically takes one to two years for them to reach full productivity with the team.
The financial cost of replacing an IT employee is estimated at 100-150% of that employee’s annual salary, or anywhere from $50,000 to $150,000. This steep cost includes lost productivity as well as the resources of other staff members in sourcing, hiring, onboarding, and training new employees.
Another important turnover cost to consider is the negative impact on employee morale. Not only will employees miss their departed colleague and feel sad that they are gone, but turnover can lead to other employees leaving or dropping in productivity because they feel stressed or overwhelmed with doing the departed employee’s work on top of their own.
It is apparent that reducing turnover is an important goal for companies to control their costs, maintain productivity, and keep employee morale steady.
5 Ways to Reduce Turnover
Offer Competitive Salaries and Benefits
Of all the reasons employees leave a company, by far the most compelling is when they get an offer of a higher salary and/or better benefits. Competitive salaries reduce turnover in IT, and they also show that you value the work your employees provide to the company more than anything else you can do.
It isn’t fair to expect IT employees to perform at a high level when they aren’t being compensated as they should be, and they will quickly figure this out and move to a more lucrative opportunity. If you can afford to offer attractive benefits like an employee stock program, unlimited time off, and hybrid or work from home arrangements, these will help keep employees working for you rather than looking elsewhere.
Provide Opportunities for Skill Development
Millennial workers now make up the largest share of the workforce, 35% or 56 million, and they particularly value workplaces that offer training and skills development to their workers.
Continuous learning and certification programs add value for millennials and many other workers of various ages, who realize that they need to keep their skills current and/or develop them in order to build and advance their careers. Training and skills development can be looked at as an investment in your workers, one that will benefit you too if they stick around long enough.
Foster a Positive Work Environment
Your workplace culture needs to be positive in order to avoid turnover and its costly consequences. Employees should feel recognized and affirmed as people rather than getting the sense that they are seen as little more than work machines to feed the company’s bottom line.
In addition, today’s workers find work-life balance extremely important. There are few workaholics willing to give everything to the company, since that lifestyle usually leads to isolation and the loss of friends and family. Doing what you can to support work-life balance will pay dividends in employee retention as you become more realistic about your expectations from employees.
Invest in Employee Well-being
Another way to show employees they matter to the company is to invest in their well-being. Many workplaces now prioritize mental health resources, workplace wellness programs and the flexibility for employees to use them when needed.
While company medical clinics and gyms cost money that smaller businesses don’t always have, it isn’t expensive to offer alternatives like health care plans that offer gym memberships, occasional onsite fitness programs, or Employee Assistance Programs (EAPs) that will ensure that mental health care is available to everyone when it is needed.
Implement Strong Onboarding Processes
A good first impression goes a long way to retention, and this process begins after the hiring process with onboarding. There are many onboarding programs available today that make the process easy and painless, as well as giving employees all the resources at their fingertips to find out what they need to know about their new employer.
The personal touch is also important, and onboarding can include a mentor for each new employee, an event to help new employees get to know their co-workers, and a genuine open door policy to allow them to ask questions that will make them feel more comfortable.
Armed with information and actionable steps to reduce employee turnover and improve retention, you will reap the benefits of holding onto your employees for as long as possible, improving your operations and your bottom line as well as the culture and reputation of your workplace.
If you need help with employee retention or need to recruit new IT employees when turnover inevitably occurs, GDH Consulting can provide all your needs. We offer Workforce solutions made easy.