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Three Tips to Improve IT Employee Retention

While turnover is always a possibility, use these tips to keep your top talent.
Brian Carlson
Contributing Writer

In an improving economy with low unemployment rates, employee retention should be top of mind for hiring managers in organizations of all shapes and sizes. This is even more pronounced in the IT field, where the retention of highly-skilled and specialized technology workers is of paramount importance in any job market since the workforce is in such high demand and prone to constant poaching by competitors.

The key to improving employee retention is to first know your turnover costs, both hard and soft. There are the standard hard and fixed costs, like the effort to process the outgoing employee, advertising for the open position, interviewing with relevant stakeholders (rarely just a hiring manager anymore), onboarding training and benefits enrollment. But it’s easy to forget and not fully factor in all the soft costs that tend to get swept under the rug when calculating true cost to replace an employee by your CFO.

Co-workers will need to cover for the open position while the search is on, impacting their focus and attention (and possible performance) to their core jobs. And once the new person is brought on, the time and effort to train them within the team and integrate them into the organization and its processes take effort from both the hiring manager and peers, potentially lowering their productivity and focus on their main jobs as well.

According to headhunting expert Nick Corcodilos, “Surveys of employers over the years have suggested the cost to replace an employee that quits or gets fired can run up to 35%-40% of the salary of the job. That includes recruiting and new-hire processing costs along with learning curve. It’s much smarter to improve employee relations and retention – and less costly.”

Since we know that retention is a smart and cost-effective strategy for companies with highly desirable and skilled tech workers, what steps do you need to take as an IT hiring manager or CIO to ensure employees will not only be productive and successful at their jobs, but to keep them happy and engaged for the long-term? We offer three key tips that will help ensure when an employee comes into your company, and stays, they will feel respected and be part of a team with a common goal.

Tip #1 – Make Candidates Good Offers

It may seem like a basic assumption to offer solid comp packages to desirable and talented employees in a tight job market, but there is a trend in hiring for the past several years in which companies consistently low-ball job offers even under challenging marketing conditions for top talent. The McQuaig Institute polled over 600 HR professionals and the #1 reason they lose job candidates, reported by 48% of U.S. companies, is because the offers they make are too low.

Peter Cappelli, a human resources and labor researcher at the Wharton School, confirms that “employers can’t get candidates to accept jobs at the wages offered.” Cappelli says, “That’s an affordability problem, not a skill shortage. A real shortage means not being able to find appropriate candidates at market-clearing wages.”

Corporate accounting systems do not track the cost of leaving a job vacant, making it appear that the ‘cost savings’ of leaving the job empty translate into ‘profit.’ A crummy job offer costs an employer — and our economy — quite a lot.

Nick Corcodilos

Tip #2 – Recruit Right Now, Retain Better Later

Good retention practices begin during the recruiting process. When you are looking for candidates for any IT role, knowing what you want to emphasize to your candidates in terms of strategy and culture are critical to finding the right fit not just for skill, but for an individual’s ability to integrate and coexist with the company at large. You need people on the interview team that have the right skills and background to be able to analyze and access IT employee’s hard and soft skill-sets.

If your HR department is part of a company where technology (software/hardware/etc.) isn’t the core business, having peers and subject matter experts (SMEs) interview candidates for tech skills is critical. Hiring managers, their peers and HR can focus more on soft skills, like collaboration, emotional intelligence and cultural fit, to ensure the employee will not just get the mechanics of the job done, but will be lasting and contributing partner committed to the organization’s goals.

Tip #3 – Give Good Benefits That Mean Something

Anyone with a few years under their belt remembers Internet Bubble 1.0, when lots of companies with ‘web’ in their names built out hip office spaces with foosball tables, video games competitions, cotton candy machines…well you get the idea. There is nothing wrong with offering nice-to-have perks for your employees to generate enthusiasm and morale, but if you are serious about retaining your top talent, you need to offer significant benefits that people with IT skills will find beneficial and germane to who they are as people and employees.

Some of the most valuable benefits you can offer not only give employees the freedom and flexibility to manage their jobs in difficult modern-connected work but also can help to build trust and a lasting relationship with your employees. Flexible work schedules are very attractive especially for employees with children who need to get them on the bus every morning, and remote-work arrangements are productive for both company and employee and make total sense for many in IT, of course pending the role definition and amount of in-office face-time needed.

And you want to reward high-performing employees and top talent with profit sharing or stock option programs. Top people will not stay if they go above and beyond to contribute to the health and growth of the company, and don’t share in the success their efforts have contributed to.  


Retention should be a priority for all IT and technology organizations and its executives, regardless of market conditions or the unemployment rate. In a time of high-competition, this mandate becomes an imperative to retain your top highly-skilled talent that is being head-hunted right now by recruiters worldwide.

Employing good strategies and best practices from recruiting – a solid competitive job offer with valuable benefits and performance comp for your high-performing people – will go a long way to keeping your employee happy, engaged and employed with you for many years.

Keep in mind no matter the unemployment situation or your level of preparation, turnover will happen, and your rock star employees may jump ship for greener pastures. So don’t skimp or shy away from succession plans for any critical employee. They need to be in place so a turnover can be as quick and cost-effective as possible.

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