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November 22, 2023
4 Min Read
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Amid a tight IT labor market, tech professionals are citing lack of salary increases and dim promotional prospects as top reasons to leave their jobs, according to a recent survey of more than 600 IT pros.
The Jefferson Frank study was based on data derived from the 2022-2023 Careers & Hiring Guides from the Tenth Revolution Group and its recruitment brands.
The survey group of tech professionals working across AWS, Salesforce, Microsoft 365, Azure, and NetSuite, revealed a desire for new challenges, along with a lack of leadership and company vision were also reasons compelling tech workers to jump ship.
To retain top talent, business leaders must promote a culture of transparency and opportunity. While the study noted fair compensation will “always be critical”, tech employees also want work-life balance guarantees in a sector where burnout is a persistent issue.
Jefferson Frank Chairman and CEO James Lloyd-Townshend told InformationWeek via email that opening a conversation with employees about workplace culture should be a cornerstone of any approach to talent retention.
He notes concerns around company culture ranked highly in the research among the reasons tech professionals quit.
“A holistic approach here, paired with concrete plans for implementation, is a good route to ensuring your staff want to stay with you as their careers develop,” Lloyd-Townshend says.
He adds it’s a conversation that absolutely must attend to questions of employee wellbeing as well, because burnout is still such a serious issue in tech sector.
“Our research shows that a tangible sense of progression is important to tech professionals, so clear career tracks are absolutely essential,” he notes. “This must include detailed responsibility maps and team organization structures as well.”
Flexibility, Promotional Opportunities
Lloyd-Townshend says mentorship schemes, support for ongoing learning, and leadership training are all good measures to consider, demonstrating a company-wide commitment to employees and their futures at the company.
“Managers also have a crucial role in keeping the conversation around progression open and transparent for individual employees,” he explains.
Josh Brenner, president of Hired.com, explains via email that while budget constraints continue to pose significant challenges for companies, they must exhibit a degree of flexibility and consider exceptions to effectively attract and retain the most competitive candidates in the current job market.
“If companies are unable to allocate financial incentives, they should explore alternative strategies to satisfy their employees,” he says.
The company's 2023 State of Tech Salaries report revealed that outside of monetary incentives, top talent highly prizes flexible work schedules, part-time off options, and physical health and mental health benefits.
Analyzing the data by gender, the study found 85% of women favor fully remote work options, in contrast to 78% of men.
“It's crucial for companies to recognize that flexible work options hold higher significance to women, as they frequently shoulder a greater burden of caregiving and household responsibilities compared to their male counterparts,” Brenner adds.
The company's 2022 State of Software Engineers talent survey found software engineers were motivated to pursue a career because of “new challenges and continuous learning”.
“To demonstrate commitment to helping teams improve, companies can hold hackathons, cover tuition reimbursement, develop moonshot projects, or through workshops and conferences,” he says. “These opportunities not only attract top talent but also support ongoing skills development within the existing workforce.”
Allocating Funds for High Demand Roles
Gartner Vice President Analyst Lily Mok told InformationWeek via email CIOs should work with their recruitment and compensation teams to identify IT roles and skills areas facing higher attrition risk and recruitment challenges due to noncompetitive compensation.
“This will help pinpoint additional funding will be needed in the short term to address pay gaps,” she says. “Organizations with limited financial resources should prioritize allocating increases to high-risk areas.”
She also recommends conducting spot-checks of the market pay conditions on at least a quarterly basis and updating pay benchmarks for key IT roles and skills areas with more recent data.
“At very least, I would recommend annual review of market pay levels for key IT jobs and skills area,” Mok adds.
Separate Salary Structure for IT
Another suggestion is to create a separate salary structure for IT, an approach that helps avoid force-fitting IT jobs into enterprise wide pay grades that often place a higher weight on internal equity than external competitiveness when valuing jobs across different functions.
“Utilize a market-based pay structure that aligns target pay positioning -- that is, lead the market, meet the market or lag the market -- by job family, critical workforce segment or even by individual role, reflecting the organization’s competitive needs,” she says.
For example, CIOs may choose to lead the market by setting salaries higher than 75% of organizations in the market for positions that are difficult to recruit and retain, such as those in software engineering, architecture, security, and data and analytics.
For those organizations with less robust or no bonus or incentive programs, such as public sector and nonprofit organizations, Mok explains CIOs can consider taking a market leader position in setting IT target base pay ranges between the market medians of base salary and total cash compensation for similar positions in the market.
About the Author(s)
Nathan Eddy is a freelance writer for InformationWeek. He has written for Popular Mechanics, Sales & Marketing Management Magazine, FierceMarkets, and CRN, among others. In 2012 he made his first documentary film, The Absent Column. He currently lives in Berlin.
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