Making hybrid working work | Computer Weekly

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Making hybrid working work | Computer Weekly

While employee retention is expected to pose a huge challenge across all sectors this year, it will be a significant issue for leaders in the tech industry.  

According to an online poll conducted by Gartner in February 2024, 26.5% of all tech workers are actively looking for new jobs compared with an average of 21% of staff elsewhere. A further 46.6% of tech employees consider themselves passive job seekers who would be open to persuasion if the right offer came along.

Brent Cassell, Gartner’s vice-president of advisory, explains that the top cause behind people leaving their employer today is compensation – although this focus on money is “neither new nor surprising”, he says. Equally predictable is that poor management ranks as the number two reason why an employee would quit.

Rather more eye-catching though is the third driver for

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: organisational stability. This factor has undergone the “most dramatic shift” in ranking terms over the past few months, points out Cassell. It is followed by future career opportunities, vacation levels and professional development.

“Although the first and second factors are generally in the top three somewhere, organisational stability is much less common,” Cassell says. “While

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over recent years are part of it, if you look at both the sector and the labour market as a whole, there have been significant changes in how and where people work, which has left them feeling disoriented.” 

Tech workers crave stability and belonging

Cassell believes that only 24% of all hybrid or remote workers currently feel connected to their company’s culture, with

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way. A further 15% of employees feel their organisation is less predictable than it used to be.

“During times of change, employees crave a sense of stability and that need is particularly acute in tech,” he says. “It’s significant because those organisations offering stability see a 51% rise in employee engagement, which is a massive number and speaks to just how important it is.”

But he also points out that the word “stability” does not imply an “absence of motion”. Instead, it is about what is described as “controlled motion”.

“As tempting as it may be, we can’t slow down the pace of change in organisations, but we can provide employees with the handholds they need to deal with it. Such handholds, particularly in times of significant technological change, such as today, include doubling down on training and development,” he says.

“This helps employees feel their employers have a plan for them and are investing in their skills for the long term. If people worry their skills are gathering dust, particularly in fast-moving sector like tech, they’ll be more likely to leave.”

Changing employee expectations

Andy Brown is co-founder and chief executive of leadership and employee engagement consultancy Engage. He, like Cassell, believes that although the tech industry may be experiencing similar talent trends to the wider market, it is also undergoing some particularly severe pressures of its own, making staff retention “even more intense”.

For instance, in general terms, the size of the ***’s overall labour market has shrunk since the start of the pandemic. This means there are simply less people available for work, particularly at either end of the age scale,

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.

But there has also been a significant shift in employee expectations, especially among younger people, leading to a gap between what employers need from their employees and what employees anticipate they will obtain from work.

“Employers haven’t really changed what they need: productivity, commitment, hard work, results, customer service or client service delivery,” Brown says. “But what has really shifted is what employees expect from their employer and how much they’re prepared to put into their work.”

Current common expectations include more flexible working hours, hybrid working when required, and more choice over the work individuals do. “But if that’s set against employers wanting to deliver the same results and output, the gap between the two is creating a challenge, and attrition or lack of retention is the upshot,” Brown says.

The situation is particularly acute in the tech sector due to its young demographic as expectations tend to be highest in this age group. But

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with no explanation as to either the rationale or the benefits have not helped the situation – and can be actively counterproductive.

RTO mandates and skills shortages

As Brown points out, the most engaged employees are generally much keener than others to come back into the office. Once they do so, their engagement levels tend to rise further due to interaction with colleagues.

“So, if you explain to people why coming back makes sense, it helps create a virtuous circle,” Brown observes. “People are more engaged and come in more often, which means others follow suit and engagement rises across the board. But that doesn’t happen with diktats.”

Another structural factor affecting

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, meanwhile, is the industry’s widespread skills shortages. Such shortages are especially marked in areas such as artificial intelligence (AI) and information security. Despite the massive redundancies of the past few years, this means that most organisations still have skills gaps and find it far from easy to attract and retain the necessary expertise.

The upshot is ongoing competition around pay, particularly for mid-ranking employees. But to make matters worse, skills shortages are also creating a “polarised workforce”.

“There are those with the right skills for the future who can pretty much demand what they want,” says Brown. “But there’s another group who expect their next employer to upskill them and keep their expertise up to scratch.”

The problem is this can create a lose-lose situation for employers. “They either end up paying over the odds for people with skills or they pay [people] to develop skills that are just as likely to walk away,” Brown says. “You can’t win in tech at the moment.”

Retaining the best performers

One approach that does make the issue less thorny is to focus on retaining the best performers rather than just anyone. These “champions” are highly engaged and productive and usually make up about 45% of the workforce.

The two most risky groups though are what are described as “hostages” (25%) and “disconnecteds” (10%). Hostages are defined as those who are disengaged but are happy to stay with the organisation for the long term. This is because they are well-rewarded compared with the effort they put in, or are unwilling to give up financial incentives, such as shares. Productivity among this group can be up to 40% lower than champions.

Disconnecteds, on the other hand, are neither engaged nor loyal to the company and its leadership and often indulge in saboteur-like behaviour. As such, they are highly critical and oppose any change initiatives.

“People tend to look at retention rates and how to increase them, but what’s the point of retaining those who aren’t engaged or performing?” Brown asks. “You have to think about the situation more deeply as there’s no optimal retention rate – it’s more complex than that.”

But there are two key considerations when trying to retain high performers, believes Brown. The first is to enable trust by ensuring your

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(EVP) matches employees’ day-to-day reality. This is particularly true of new joiners, who are unlikely to stay if there is a mismatch.

The second is ensuring the basics are in place to deliver on the employee value promise. These basics include how the company is managed, how communications are handled and how staff development takes place, as well as the organisation’s values, being clear how people at all levels are expected to behave and what the consequences will be if they don’t.

As Brown points out: “The pressure is now on employers to create an EVP that is sticky enough to make people stay.”

Turning values into reality

Susan Charnaux is chief people officer at business process automation software supplier Appian. The company has recently doubled in size to 2,300 people due to international expansion and expects to add another 150 heads by the end of the year.  

As a result, the decision was made to conduct a review to ensure its strategy and values were consistent across the business, with the aim to “find ways to bring people together and ensure we were culturally cohesive”, according to Charnaux.

The first step was to capture the value statements of the organisation’s founders who have led it since being set up 25 years ago. These values were condensed into four categories: respect; constructive dissent and resolution; work to impact (not completion); and ambition (to improve the world). They were then discussed with employees at all levels of the business using focus groups and interviews to obtain their input.

“We wrote the values down, shared them and put them in various places, such as the intranet, but really it was about, ‘How do we turn this into something we do every day?’”, Charnaux says.

In relation to respect, for example, employees are now invited to award colleagues

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if they act in line with the company’s values. A new performance review process requires managers to evaluate team members based on specific competencies aligned with the firm’s values. Employees are also requested to illustrate how they demonstrated them in their activities.

But even during the interview process, recruitment managers are expected to have the values front of mind.

“We’re listening out for candidates who align with our values and would work well in our culture,” Charnaux reveals. “We want people who’ll like our ways of working because, if they don’t, it’s best to know from the start.” 

Ensuring organisational resilience

A final consideration in such difficult times for talent retention is positioning it effectively to ensure organisational resilience. Brown refers to one tech company that identified the pivotal positions in its business. It then evaluated whether they were filled by best people and transferred them into those roles if not.

The second step was to undertake succession planning. This was used to upskill colleagues and create a “bench of talent” consisting of two or three people beneath each critical role.  

“The idea here was if they were poached, there was a backup plan as one of the bench could be moved into the vacated critical role,” Brown says.

The next stage was to identify where the largest “********” group in the company was and to either re-engage individual members or let them go. The final phase was to codify any internal managerial best practice for adoption by others and to enhance the organisation’s EVP on the labour market to attract better talent. Data was employed throughout to inform decision-making and enable learning.

“It was quite a simple approach that was well thought through. And it makes sense because getting attraction and retention right is important in all sectors, but it’ll have an even ******* impact in tech right now,” Brown concludes.

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