In many cases, salary and financial benefits are the deciding factors for an engineer to stay with the company. However, firstly, every company has a salary budget, and secondly, a salary increase does not always imply the career growth the developer has in mind. We assume that the professionals the company is at risk of losing have some of the following characteristics:
- developers who lack personal fulfillment and meaning at work;
- skilled workers, especially those with scarce skills, who are ready for greater challenges;
- burned-out developers who continually work overtime and lack support from their colleagues or management.
A business also risks losing engineers without quality onboarding, company culture, and established business processes. Money is unlikely to hold developers for long without these.
The strategies we share in this article will help software companies reduce tech talent turnover and create a step-by-step plan for retaining the best workers. In addition, we’ll cover the stages that require particular attention, such as initial hiring and onboarding, and share ideas for managing and investing in developer growth.
We recommend applying employee retention strategies not only to in-house developers but also to part-time workers and contractors. The latter two categories often receive little attention from management but need just as much investment and incentives to stay at the company.
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Modern Software Engineers Demand More Recognition, Support, and Flexibility
For software companies and the job market, 2022 was a particularly turbulent year. Major tech companies have announced layoffs, and Y Combinator has advised startup founders to cut costs as companies see a decline in business activity. Even more disturbingly, a new wave of economic uncertainty came just after the shock of the pandemic, lockdowns, and the widespread shift to remote work.
However, laid-off tech workers are quickly interviewed and receive multiple job offers and higher wages. The balance of power is still with the job seeker as the labor market remains historically strong regardless of economic conditions. As evidence, LinkedIn’s Q3 2022 report shows that software engineer, DevOps, and project manager positions remain among the top 10 most in-demand occupations.
Realizing that tech professionals are in demand, employed workers might be persuaded into looking for another job that they feel better suits their aspirations. This is particularly the case for those professionals who have “outgrown” their responsibilities and role. In other words, modern talent demands more — more pay, more recognition, and more flexibility.
Strategies to Retain Top Tech Talent
Companies might raise salaries, revise benefits, and provide sign-on bonuses to attract and retain highly skilled workers. However, it’s not just the salary that encourages people to stay with the company. In this section, we uncover the highest-impact strategies companies use to retain top talent and begin our journey with the hiring process.
Hire the Right Tech Talent
To ensure developers are involved in the project, employers need to initially hire those who will be enthusiastic about the company and resilient to upcoming challenges. A hiring decision based on solid, objective factors helps the company find and retain the right people. Here are a few pro tips:
- Tech companies should have honest and realistic job descriptions and clearly communicate the requirements to candidates during interviews. For example, if a company is looking for someone to make minor updates to an application, it needs to avoid language that says the person will make strategic design decisions.
- Questions about candidates’ ambitions and priorities help to determine whether the engineer has a clear career path and if their goals align with the company’s.
- Some strategic questions Indeed suggests asking during the interview are, “How do you handle criticism from your boss?” and “What would you do if you had to undertake a project with a colleague with whom you had a disagreement?” Such questions show whether the candidate is able to resolve conflicts and take criticism gently. The ability to solve problems instead of harboring resentment is an important factor in strengthening company culture and workplace morale.
Create a Smooth and Motivating Onboarding Experience
The Society for Human Resource Management (SHRM) emphasizes that a well-designed onboarding process has a greater impact on employee engagement and retention than a simple one-day orientation. Besides introducing a new hire to the team and showing company and project presentations, tech companies should consider these steps to ensure smooth adaptation:
- Assign a technical specialist who can mentor and coach the engineer during their early days in the work environment.
- Start with simple tasks, so as not to overload the developer with information, and evaluate their work frequently.
- Tell the developer about their goals for the onboarding period. These might include getting deeper into the stack and infrastructure and implementing and releasing new features for the company’s product.
- Organize regular feedback sessions throughout the onboarding process to ensure its success and close any gaps in the new developer’s knowledge.
Learn more about why onboarding directly impacts developer efficiency and engagement by reading our checklist on remote developer onboarding.
Give up Power
As the Harvard Business Review says, people have certain universal psychological needs: the need to be treated as an equal, the need for professional development, and mastering self-directed learning.
Each of these needs is frequently denied by traditional command and control management. By giving software engineers authority, employers can create an environment that nourishes these universal needs instead of suppressing them. When managers’ actions show that they respect and trust team members, the latter will find inspiration to perform their daily tasks.
Invest in Developer Growth Opportunities
Thirty-five percent of developers cite the desire for growth and leadership opportunities as a reason to look for a new job. This data comes from a survey conducted by Stack Overflow in December 2021.
The tech industry is competitive, so continuous improvement is critical for software engineers. To avoid losing developers willing to leave positions that don’t provide enough room for growth, tech companies can make the following activities a priority:
- Assigning challenging projects to improve developers’ skill sets. This greatly benefits the employers, too — developers sharpening their skills and learning new languages can solve more complex technical and business problems.
- Mentorship and upskilling. Having access to more experienced team members, certification courses, or leadership development programs has a significant impact on improving professional skills.
- Offering alternative roles. Sometimes developers just don’t want to invest in improving their coding skills. They may look for other options, such as project management, technical sales, or quality assurance. Employers should offer people jobs they enjoy, even if it means moving them out of positions in which they excel.
Provide Benefits That Engineers Want
Since remote work has become the new norm for many tech companies, benefits packages also need to change. For example, software engineers working from home may not be as excited about benefits such as office snacks and coffee, child care, or even extra vacation time as on-site employees.
In a recent survey by Paychex, only 45% of respondents reported a change in company benefits since switching to a remote work format. The most common changes included flexible work schedules and performance-based bonuses. However, when workers were asked what additional benefits they wanted most, they ranked a home office stipend (31%) and reimbursement for internet costs (30%) in the top two places.
The study also found that 64% of respondents whose companies had updated their benefits packages did not plan to quit within the next year, compared to 47% of those whose benefits had not changed.
See also our research on the perks and benefits Series A startups are offering software engineers in 2022.
Listen to the Engineer’s Feedback
Great leaders are active listeners. One of the hallmarks of a thriving workplace culture is leaders who understand their teams and what they need in terms of job flexibility, work-life balance, and development opportunities. Including developers in decision-making, listening to them, and giving honest, respectful feedback makes developers feel better about their work.
Such feedback also protects engineers from burnout. Of course, it can be caused by unequal treatment or lack of support from management or colleagues, but simply asking team members for feedback is likely to reveal ideas on how to combat it.
What to Do if an Engineer Announces Their Decision to Quit
If it’s a really valuable professional, the team leader should talk to them. In some cases, offering a new position in the company or new tasks can save the situation.
Moreover, salary is often the deciding factor, so the company may try to negotiate a raise. Retaining a current engineer is financially beneficial to the company even after revising their salary. The cost of replacement is not always obvious, even to hiring managers. It can include recruiters’ bonuses or recruiting agency fees, downtime while searching for a candidate, and time spent by the hiring manager on screening and selecting candidates. In addition, the efficiency of a new hire may be lower in the first months of work, and if the developer is not suitable, the whole hiring cycle repeats.
Furthermore, the average market salary of a specialist is usually higher than the average salary of a similar specialist who has worked in the company for several years. In other words, the employer often exceeds the spending budget when hiring a new person.
Another factor rarely taken into account is the reputation of the company and the hiring manager. Each dismissal of a strong employee is a blow to the reputation, and each failed replacement additionally demoralizes and demotivates the team.
If an engineer’s skills and years of experience are key to the company’s future success, then they can also be offered a part-time or contract job. In the case of serious burnout, the employer may grant a sabbatical leave, during which the worker will be paid a percentage of their salary. If all else fails, the team leader should conduct an exit interview. Perhaps they will find ways to improve the company and reduce the number of similar cases in the future.
Finally, if a developer decides to leave, it doesn’t necessarily mean the company is bad. Just as every business moves forward, professionals can “outgrow” their responsibilities. Sometimes this happens at a time when there are no opportunities for them to develop further within the company. When those opportunities arise, however, it is possible that the professional will return to the company, especially one that has a strong culture and values team accomplishments. And if they do, they will return with more experience and new skills.
A talent retention strategy begins with regular communication. The needs of developers and how they see their career paths may differ from the needs of the company. Therefore, if both sides hear each other and find common ground, it will strengthen trust between them, preventing the engineer from burnout and improving their productivity.