How to retain talent with a fierce IT employee retention strategy12 Oct, 202314 minutes
You might be surprised to know that employee retention levels in the UK are one of the worst...
You might be surprised to know that employee retention levels in the UK are one of the worst in Europe. According to Gallup’s 2022 State of the Global Workforce, only 9% of UK employees felt enthusiastic about their work and who they work for. It doesn’t take a genius to know this is an ugly stat. But what can we do about it?
As businesses strive to harness the potential of cutting-edge technology, the ability to retain top IT talent has become a defining factor in achieving and sustaining a competitive edge. With all the chatter around skills shortages and the demand for tech talent, the need to retain your brightest sparks has never been more essential.
Picture this. Imagine a world where your IT engineers remain loyal to you until they’re grey and old, fueling productivity, igniting innovation, and consistently delivering exceptional results for your business until the end of time. Okay, we might be exaggerating slightly, but you get the gist.
In this guide, we’ll show you how this vision of retaining your IT talent for the long term isn’t just a pipe dream but an attainable reality. We’ll answer the questions of what employee retention is, why it’s important and how you can calculate your staff turnover rate. From there, we’ll jump right into our 5 steps on how you can improve your staff retention strategy.
Here’s a sneak peek of what you can expect to see in our guide on how to retain talent with a fierce IT employee retention strategy:
- What is employee retention?
- Why is employee retention important?
- How to calculate employee retention rate
- 5 steps on how to improve employee retention
- Have a clear mission, vision and values
- Establish a transparent work environment
- Invest in the latest cutting-edge tech
- Provide your ambitious IT talent development opportunities
- Reward stellar work with top-tier company benefits
What is employee retention?
Employee retention is all about how a business keeps or ‘retains’ its talent and can be applied to any and every sector, including IT engineering. Staff retention can be measured by the turnover rate of your business, with a low turnover rate considered as solid employee retention. We’ll have a gander at how to calculate your employee retention rate in a bit.
When it comes to employee retention, many factors can make the difference between having a high or low staff turnover. We’ll jump into some of these later in this guide, but to give you an idea, here are some of the things businesses typically include in their employee retention strategies:
- Compensation and benefits
- Work-life balance
- Opportunities for growth and development
- A positive work environment
- A sense of belonging and purpose
- Fair and consistent treatment
- Appreciation and recognition
So, now that you know what employee retention is, let’s highlight why it’s important.
Why is employee retention important?
Employee retention is important and should be high up on your agenda if you’re hoping to keep your software and developer engineers from running off to your competition. When your staff suffer burnout or see opportunities that better suit their ambitions elsewhere, they’ll be quick to leave if your staff retention strategy isn’t up to scratch. These strategies are essential and are significantly beneficial during periods when unemployment is low and the demand for IT engineers is high.
To further emphasise why retaining your IT engineering talent is important, here are some of the main benefits of employee retention.
Employee retention adds high-value productivity and efficiency
When employees are happy, engaged and motivated to work for you, this will translate into higher levels of productivity and efficiency, which can lead to increased profits and improved customer service.
Reduce costs of hiring and training new IT engineers
Did you know that the average cost of an employee who leaves a company is 33% of their annual salary? Ouch! This is because the costs can add up when you hire and train new employees to fill the gap of the employee who left. When your staff employees stay with you for a long time, you can save money on these costs.
On the flip side, this doesn’t mean you shouldn’t look to hire talent in the future - you’ll still need to do this if you want to grow your business. By having a fierce IT employee retention strategy, we're simply saying that you'll save a few pennies by not having to replace your existing people whilst also encouraging new people to join your brand.
Maintain an unorthodox IT engineering team
A high staff turnover rate can disrupt the workplace and make it difficult to maintain an unorthodox workforce and a stable culture, leading to decreased productivity and increased costs, and nobody wants that.
Constantly shifting teams creates an unstable foundation that is more challenging for your business to build on and maintain. So, it's vital to get your workplace culture and employee retention strategy spot on to avoid becoming a revolving door for having to keep replacing your talent. It's not just essential for maintaining an unorthodox IT engineering team but for encouraging more people to join.
Ignites innovation and creativity
If your employees feel valued and appreciated, they’ll be more inclined to be innovative and creative, which can lead to the development of new products, services, and processes that can benefit your business.
Improves customer satisfaction and loyalty
Your customers and clients can sense when a member of your IT team has left your business. If this number continues to rise, your customers will begin to question why your staff turnover rate is so high and perhaps think twice before partnering with you in the future. However, when your staff retention is spot on, and your employees are on board with the direction of your company, they’re more likely to deliver excellent customer service, which can lead to increased customer satisfaction and loyalty.
By investing in an employee retention strategy, you can establish a more positive and productive workplace environment, which can lead to better business outcomes. We’ll get into how to improve employee retention after we show you the ever-important method for calculating your staff turnover rate.
How to calculate employee retention rate
Knowing how to calculate employee retention rates in your business is an excellent indicator of whether your staff retention strategy is working or needs improving. What’s more, it’s easy to do.
You can calculate your employee retention rate by dividing the number of employees who stayed with your company during a set period by the total number of employees at the start of that period. This set time period can be whatever you like: yearly, quarterly or monthly.
For example, if your company had 100 software engineers at the start of the year and 95 of those employees stayed with you by the end of the year, your employee retention rate would be 95% - which would be pretty incredible considering the employee retention rate between 35% - 84% is considered good. For added context, according to the 2021 Bureau of Labor Statistics report, software developers had an average turnover rate of just over 57%.
Here’s the simple formula you can follow to calculate your employee retention rate:
Retention Rate = (Remaining Headcount ÷ Beginning Headcount) x 100
If you’ve calculated your staff turnover and realised your employee retention strategy could do with some improvements, or you’re rate isn’t too shabby, but you want to find out if there are other things you could be doing to boost your retention efforts, then scroll to discover our 5 steps on how to improve employee retention.
5 steps on how to improve employee retention
So we’ve covered what staff retention is, why employee retention strategies are important and the benefits they can bring to your business, along with how to calculate your staff turnover rate. Now it’s time to get into the nitty-gritty of how to retain talent with a fierce IT employee retention strategy.
In this section, we’ll let you in on our 5 steps on how to improve employee retention, from having a clear mission, vision and values and establishing a transparent work environment to the importance of investing in the latest cutting-edge tech, providing your IT talent with development opportunities and rewarding stellar work with top-tier company benefits. Let’s get into it.
1. Have a clear mission, vision and values
We’ll kick off our 5 steps on how to improve employee retention by delving into the importance of having a clear mission, vision and values. Your mission, vision and values are three big statements that ultimately define your business, from its purpose, goals and guiding principles.
Mission, vision and values are three statements that are often used together to provide a framework for the business's strategic planning and decision-making whilst also helping to guide the organisation's culture and employee behaviour.
Here’s an overview of what each statement means:
Your mission statement should include a brief overview of your brand's purpose. It should describe what you do, who you do it for, and why you do it. A strong mission statement is clear, concise, and memorable.
When developing your vision statement, remember this should highlight the desired future of your business. You should describe what the organisation aspires to be and achieve. Top-tier vision statements are aspirational, inspiring, and achievable.
Finally, your values statement is a list of your business's core principles and ethics. This should outline how your organisation wants to do business and how it wants to treat its employees, customers, and other stakeholders.
In today’s talent landscape, IT engineers want to work for companies with a purpose they can identify with and genuinely want to support. It’s therefore essential to communicate your mission, vision and values to your employees, not just when they get onboarded into the role but throughout their journey with you.
Having a clear mission, goals, and even a vision statement right from the get-go will do wonders for your employer brand and staff retention while ultimately driving your organisation into the future with the confidence of knowing you’ve got a group of loyal IT engineers who have your back.
2. Establish a transparent work environment
Most people, IT engineers included, prefer it when their employers cut out the bull and are honest and transparent with them. At the same time, employees are more likely to stay loyal to you if they feel their voice is being heard amongst all the noise in the fast-paced IT engineering world. With that said, establishing a transparent work environment is next on our list of steps for improving employee retention strategies.
Two excellent ways to establish a transparent work environment are by giving your IT team regular feedback and allowing them to give you feedback in return. Let’s start with providing employee feedback.
Provide employee feedback
You could conduct employee feedback once a month or once a quarter, whenever suits you and your staff member. This performance review could be conducted by a senior IT engineer or team leader who works closely with the individual on a daily basis. Ideally, you want to get to the point where members of your IT team feel comfortable coming to you to ask for feedback and support on how they can improve their performance.
Whenever you do these feedback sessions, whether it’s with the whole IT department or an individual developer, for example, be sure to conduct the feedback in a setting where you and the employee(s) feel comfortable.
Although feedback can be done just fine from a remote setting, it’s worth investing in your office space to ensure there are areas where these feedback sessions can take place to discuss matters that people may want to be kept private. Not only that, if you’ve got a nice office space, that’s one more reason for your employees to stay.
Get feedback from your employees
On the flip side, when establishing a transparent work environment, you should allow your employees to have their say. Whether they want your opinion on their performance, are looking to run a new product idea past you or wish to discuss something else, either work-related or personal, in private.
Another thing we’d like to add here is that as much as it would be nice to keep hold of your brightest and best IT engineers, there may come a time when they’ll move on to new pastures. It’s often nothing personal against your business; it’s just, well, business. In these scenarios, there are two options you can take.
Option one: You could be bitter about it and tell your former employee where to go while chucking a few expletives in as they walk out the door.
Or you could go with our preferred recommendation of option two.
Option two: You can allow your employees, typically via an exit interview, a chance to provide feedback on how they feel about your brand, why they’re leaving and any improvements they would make.
Information like this could be extremely valuable as you look to further improve your employee retention strategy. Allowing this employee feedback will also leave your former staff member with a positive, lasting impression on your business, which could one day lead to them returning to your business or recommending other IT talent to your organisation.
Encouraging this transparent and open behaviour will make your staff feel part of a company that genuinely cares about its people and wants the best for them. Now, you wouldn’t be quick to leave a place with a culture like that, would you?
3. Invest in the latest cutting-edge tech
Your IT professionals are one step ahead of the curve regarding the latest developments in the world of tech. They are the core industry disruptors who can truly shape and futureproof your brand, keeping you above the competition.
So, if your business is falling behind by utilising yesterday’s tech and isn’t striving to keep up with the times by applying the brand-spanking new technology advancements to your operations, what’s the incentive for your employees to stay with you?
With that said, next on our list of steps on how to improve your employee retention strategy is to invest in the latest cutting-edge tech.
Now, don’t get us wrong, you still need to create a workplace culture with a team of approachable, transparent and hardworking individuals - this goes a long way to keeping hold of your top talent - but for your software engineers and developers, specifically, they need to know they’re working within a space that values the tools that inspire and allow them to work to the best of their abilities.
We’re not saying to go and splash the cash and blow your budget on anything and everything tech-related unless you’ve managed to figure out how to grow money on trees. What we’re saying links back to our previous point. Speak to your IT engineers and encourage feedback from them to gain an understanding of the latest tech within the market and figure out what tools and technologies will set you and your staff up for success.
If you can justify it from a financial and business operations standpoint, go ahead and invest in the latest tech. Not only will you gain the advantage over a less tech-savvy competitor, but when your IT team sees you’re staying up-to-date with and investing in the latest industry advancements, they’ll be more inclined to invest their careers with you.
4. Provide your ambitious IT talent development opportunities
If you genuinely want to make an effort to keep your IT engineering go-getters motivated to stay with your brand, another step you could take to improve your employee retention strategy is to provide internal development opportunities.
A good starting point, which you could do from the interview and onboarding stage of your IT recruitment strategy, is to get feedback from your IT department on their career goals, where they want to go and what they think you could do to help. With this valuable information, you can grasp what makes your software developers tick and what opportunities you could tap into to get the best out of them.
For example, Zippia found that 92% of employees said well-planned training and development opportunities positively impacted their engagement. Additionally, Zavvy revealed that 94% of employees would remain with their current employer if they were offered more opportunities to learn and develop.
The evidence suggests that talent appreciates it when their employer invests in training and development opportunities to help with their career advancement. Whether you decide to build out and run internal training sessions to fill a skills gap or outsource a learning provider to give your IT team the latest tools they need to progress in their careers, showing an interest in growing your current talent is a huge must for improving your employee retention strategy.
Providing your ambitious IT talent development opportunities makes perfect sense when you think about it. Let’s say your most senior software engineer decides to retire, and you quickly need someone to fill the role. If you’ve given your IT professionals training and development opportunities throughout their time with you, they’ll be prepped and ready to jump straight into a more senior role - saving you the time and money of making a new hire.
Of course, there will be times when you need to hire executive-level talent, but every now and again, it helps to promote from within. Let’s face it: If you don’t allow for internal career growth and neglect to provide an internal progression ladder for your talented IT engineers, what reason do they have to stay with you? That’s why providing your ambitious IT talent with development opportunities is so important. Ultimately, you need to give your people something to work towards.
Similar to what we said in our previous point, if you invest in the career progression of your IT talent through training and development opportunities and internal progression, they’ll return the favour by investing their time and effort into your business - a win-win for everyone involved.
5. Reward stellar work with top-tier company benefits
Our final step you need to know if you want to improve your employee retention strategy is to reward your IT engineers for the stellar work they do day in and day out for your organisation and offer them top-tier company benefits to show your appreciation for them.
Quantum Workplace shows employees are nearly three times more likely to be engaged in working for their employer if they feel recognised and appreciated for the work they do. But what can you do to recognise and show your appreciation for the great work of your IT engineers?
Here are some of the things you could implement into your staff retention strategy to recognise the great work of your people:
- Pay raises and bonuses
- Company days out
- Gift cards
- Extra time off
- You could also introduce a points scheme where employees can earn points for achieving certain goals and targets. They can then save and cash these points in for different rewards, like gift cards we mentioned above
When mapping out the incentives of your recognition plan, be careful not to assume you know what will make your IT engineers happy. Going back to our employee feedback point, make sure to ask your IT engineering team what they’d like in return for their hard work.
You should also consider including some of the other more common benefits that are essential to improving employer retention strategies and making your talent more likely to stay with you. These include the following:
- Health insurance
- Pension plans
- Flexible hybrid working
- Paid annual leave
- Paid sick leave
- Staff discounts
- Wellness programme
Additionally, why not highlight the fantastic contributions of your IT engineers by shouting about them on your social channels through case studies and internal comms? All the above can go a long way to retaining your IT talent because when they feel recognised and appreciated by you, you’ll gain their respect and loyalty in return.
Let’s wrap this up
So that’s a wrap. You’re now well-versed in all things related to employee retention, from what it is, why it’s important and how to calculate your staff turnover rate. We’ve also gifted you with 5 simple steps on how to improve employee retention within your business, from having a clear mission, vision and values to rewarding stellar work with top-tier company benefits and everything in between.
As mentioned, you can’t retain everyone; people will come and go - that’s just life. However, by following our 5 steps, you can have a damn good go at retaining your top IT engineers and keeping them around for the long run.
If you’re interested in knowing more about the value IT engineers can bring to your brand and give you all the more reasons why you should improve your employee strategy to keep hold of your top IT engineers, check out our guide on the 5 reasons to invest in IT engineers to power your business.
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