What is the average IT recruiting process

Employee turnover rate

A high turnover rate causes problems in the technology industry.

The turnover rate in the tech industry is 13.2% and is higher than in any other industry. Even companies that have mastered recruiting and onboarding are still struggling with talent retention. Is a high turnover rate a matter of course and something that HR departments should accept?

Definitely not - in this article we're going to share with you the top reasons tech workers leave their jobs and what tech employers can do to reduce turnover.

What is the turnover rate?

Before we dive deeper into the subject of employee turnover in technology, it is worth explaining how to calculate the turnover rate so that we are all on the same page.

Calculate your turnover rate

Turnover is a decrease in the size of your workforce that results from employees leaving or retiring from the company. You can calculate it by dividing the number of full-time employees who left per month by the average number of employees and multiplying by 100.

And it spares no one ... not even "the big ones".

No technology company, regardless of size or reputation, is immune to revenue.

  • Uber - on average, their employees only stay with the company for 1.8 years, despite the generous service package and chic office space that Uber offers
  • Dropbox tech employees leave after 2.1 years
  • Tesla - the average tenure is 2.1 years

Source: Business Insider

According to the pay scale, we can see that companies with the shortest length of service are also the most aggressively hiring new employees. "

Failure to have a strategy to reduce your turnover rate will have serious business consequences

Failure to address high employee turnover will have a negative impact on your business. Think about it:

  • Loss of income - Losing an employee can cost you dearly - in the truest sense of the word. Especially if your top performer is out. Turnover and retention experts estimate that it costs 150% of the employee's base salary to replace them.
  • Loss of Productivity - On average, it takes 43 days to hire a software developer - that's nearly a month and a half in lost productivity, and that doesn't even take onboarding into account. That can cost you up to $ 33,251.
  • Create bottlenecks - When an employee leaves, he takes all his knowledge with him, and you can't put a price tag on that. This knowledge gap needs to be filled - on average, it takes one to two months to get knowledge workers up to speed. Inevitably, this will create some bottlenecks unless you ask your best employees to take on some of the duties and work with overcapacity. Unfortunately, this could lead to ...
  • Lower work ethic - Nobody likes being overworked, it could have a bad effect on employee motivation. Even if the departing employee was close to the people who stayed with the company, they could become emotional or even resentful and consider resigning.

The low morale of employees cannot be ignored as it can escalate the problem: the termination of one employee can lead to another ...

Ever heard of the snowball effect?

Like-minded people tend to follow one another - they reinforce each other's points of view. According to Robert Cialdini, we often base our decisions on other people's actions and treat them as social evidence that is a shortcut to help us decide how to act. The more employees leave your company, the more will follow.

What are the reasons for the high fluctuation rate in the technical area?

High turnover rate and reasons why tech workers leave their jobs:

  1. Striving for higher compensation (71%),
  2. Looking for better working conditions (47%)
  3. Looking for more responsibility (32%)
  4. Look for more opportunities to express creativity (26%).

Source: Cube

The above reasons for the high turnover rate in the technical field can be divided into two main categories: the right skills to carry out the job and the right cultural adaptation.

What can you do to reduce employee turnover?

To hire developers, employers need to employ the right strategies and tools to ensure that employees have the right skills and are in line with the company culture.

Review of technical skills:

Here are a few ideas that you can use to verify that your candidates are qualified enough to do the job you are hiring them to do:

Automated in-stack coding tests

While they're not the final yes or no to hiring a developer, they're a great pre-testing tool to help you decide who to invite for additional face-to-face meetings. You can choose custom tests to maximize adjustment accuracy. At DevSkiller, we are strong advocates of using coding tests that are similar to real work as they give both employers and employees an insight into real work. Automated in-stack coding tests are not only a massive time saver for the HR department, but they can also prevent them from making costly mistakes. If you end up hiring people who are overqualified for the job, they will most likely head off in search of more interesting challenges. Hiring an underqualified employee is just as detrimental as he will do more work for existing team members which will eventually lead to high turnover.

Conduct technical interviews with suitable candidates

Conducting technical interviews with the candidates you choose, either on-site or remotely, is a good tactic to hire the right talent and, as a result, reduce the technical turnover rate. Just make sure that all technical interviews are conducted with technical staff. DevSkiller can help you quickly eliminate candidates whose skills look better on paper than they do in real life, so you can focus your efforts on the right people. Check out how we helped ImpactTech reduce the number of technical interviews from 198 to just 64 to reach 28 new hires.

You can also consider pair programming ...

Some companies go even further and use pair programming as part of their hiring process, where a programmer works alongside the candidate on the same assignment. In this way, the recruiter can not only check the applicant's technical skills, but also their social skills and see what it is like to work with them.

Assessment of soft skills and culture fit

Another important step in reducing the high turnover rate in the technical field is to make sure that the new hires are a good fit for your company.

  • Use pre-hire assessment tools
    Psychometric tests are powerful pre-assessment tools as they measure candidates' mental abilities as well as their behavioral style. This can be used to check whether their character and cognitive skills are suitable to effectively carry out the job for which they are applying. There are several tests that you can choose from. The most common tests are number comprehension, verbal reasoning, graphic reasoning, situational judgment and personality tests. Below is an example of a verbal reasoning test.Source: SHLDirect

Psychometric tests improve recruiting effectiveness as they reveal skills that cannot be assessed in a face-to-face interview.

  • Ask candidates to spend some time in the office
    It is beneficial for both your company and your future employees. It gives candidates and employees the opportunity to meet in person, see if they are getting along, and ask questions. The recruiters can observe how the candidates behave and act, which should help them decide whether or not the selected candidate fits the corporate culture.
  • Use situation assessment tests
    By using video as part of your recruiting process, your candidates will get a better sense of what it would be like to work for you, while also allowing you to see how they react to "real" situations in the workplace.
  • Ask the right questions in the interview We rightly mean culture-specific questions because they help you assess the cultural fit. Here are a few questions to consider - just remember that the questions should specifically reflect YOUR company culture.
    • Describe the work environment or culture in which you are most productive and happiest.
    • What are the qualities of the best boss you've ever had - or wish you had?
    • What are the positive aspects of your current job and work environment or the last position you held before this interview?

      More on this topic here.

  • Find out what is really important to them Try to find out what is most important to them. You can get this information by asking an unconventional question to make the answer more real. Google, known for its thorough interview process, asks, "If you could be remembered for a sentence, what would it be? - Very powerful and creative, don't you think so?"
  • Find out how they want to grow and what kind of career they can make in your company Lack of growth opportunities is one of the reasons tech workers leave their jobs. Good hiring practice is to review the employee's expectations right from the start. If they are overly ambitious and you are sure that you will not be able to meet their expectations, then maybe it is better to hire someone else as they will most likely leave you.
  • Conduct soft skill interviews with HR Last but not least, don't forget to evaluate your candidates' soft skills; H. Communication, decision-making, collaboration, teamwork, etc. They are critical to checking cultural fit and a good indicator of future job performance. EBOOK: 259 software engineer interview questions

Final thoughts

The high turnover rate in technology is a problem that all companies struggle with. The high turnover rate can and should be addressed before new employees are hired.

The best strategy for managing turnover is to implement the right mechanisms for screening technical skills, such as automated in-stack coding tests, technical interviews, and cultural match checking.

Photo credit: Nathan McDine on Exposed