Employment in the tech sector – both in large tech companies, and for tech roles in other industries remains high.
To those outside the field, this may come as a surprise, given the frequency of headlines highlighting layoffs in the sector.
On the ground, businesses are pushing forward on digital transformation as they seek to future proof their operations. To do this well they need ready access to skilled tech talent across multiple fields.
The requirements are varied and complex. For example, they need people who can integrate cybersecurity with business strategy, who can streamline operations using cloud computing or use AI and machine learning algorithms for both security and marketing purposes.
What this means is, as highlighted by Deloitte, demand for workers in tech occupations remains intense. This demand is compounded by significant skills shortages: a particular issue in the field of cybersecurity. In the UK for example, a recent government report published by the Department for Science, Innovation and Technology highlighted a persistent shortfall when it comes to the number of professionals needed, versus the number available.
For many businesses, the twin challenge of high demand for and low supply of tech talent is compounded by significant levels of attrition.
According to research published by data center provider Equinix in a 2023 report, over one third of businesses flagged talent retention as a challenge. This is not a new problem, in 2021, research reported on LinkedIn flagged that the tech industry has a higher than average turnover rate.
Attrition in Tech Roles: What Causes it and What is its Impact on the Business?
Where businesses experience challenging levels of attrition, there are likely multiple factors at play. Employees – especially those whose skills are eagerly sought after in the market – move for many reasons.
Salary is often cited as the primary motivation. We know that in tech, rates of remuneration have risen steeply in recent years – though the curve may be beginning to flatten. That said, we also know that salary is not the only factor when it comes to making a job move. Talent will weigh up benefit packages, culture, the pattern and flexibility of work and opportunities for development and skilling. It is this latter that businesses can often fail to properly value with regards to its effectiveness in keep talent engaged, motivated, and satisfied.
End-to-End Skilling, and What it Means for Retention
When organizations commit to a systematic approach to talent management, they are able to provide employees with tailored career paths, identifying opportunities for development and progression.
With access to this type of program, employees are better able to take a proactive view of potential career paths within their organization – either horizontally or vertically, and to have a clear understanding of the skills development they will need, all of which serves to keep team members motivated and engaged.
Progression is intrinsically linked to retention, as illustrated in LinkedIn’s recent Workplace Learning Report, which states that an employee who has made an internal move within an organization by the two-year tenure mark is more likely to stay with their company (75% vs. 56%), and notes that three of the top five factors that drive people to pursue new jobs reflect their desire to grow and develop new skills.
Skills Mapping Tools that Benefit Employees, Always Benefit Employers Too
Creating effective systems to facilitate skills development and progression, particularly at scale, is not an easy task for employers.
An end-to-end talent lifecycle management tool such as Talentwize, developed by Elev8 and YNV Group, streamlines this process, benefitting employees: providing clear learning paths and defined goals and so supporting progression.
Beyond supporting progression, it acts as a valuable early warning system for employers, flagging where high-contribution employees are ready for their next challenge or could be at risk of leaving, thus helping to reduce churn. The tool also serves to identify skills gaps and guide decisions on where existing employees can be skilled up, reskilled, or redeployed, via sophisticated assessment tools that can map skills across the entire organization.
More than that, it provides easily accessible data that can track and measure learners’ progress in diverse fields including data and analytics, software engineering, cybersecurity and infrastructure.
In a fast-moving field such as tech, a tool such as talentwize provides organizations with reassurance that as their business model evolves, the skills and knowledge of their team is keeping pace.
Cutting the Cost of Attrition
Estimates vary according to role and industry, but to replace an employee can cost anything from 50% to 150% of their annual salary. The drain of attrition on the business is significant, so where organizations can put in place effective, systematic solutions that both stem churn and match skilling with business priorities to fill skills gaps, then it serves them well to do so.
Ultimately, facing a surplus of tech-equipped talent and the steady threat of attrition, companies have an opportunity to retain their current employees and save on hiring resources by investing in upskilling programs and talent management tools. By providing clear learning paths and development opportunities to people, businesses will not only improve their retention rates, but ensure that their teams have the right skills to keep up with evolving industries and upcoming tech challenges. Reach out today to find out how Elev8 can support you with our boutique skilling programs.