How Leading Employers Keep Tech Talent
Attracting and retaining a talented tech team is the most important success factor for the long-term success of CIOs and their agendas. But it is also their most difficult, nettlesome challenge, especially in today’s hot, cutthroat marketplace for IT and engineering skills. Companies have reached out to Everest Group for help understanding the complex issues they must navigate and are seeking our comprehensive analysis on how other companies handle these issues.
In response, we launched our Top Employers for Tech Talent™ program to recognize the companies that are doing outstanding jobs attracting and retaining their tech talent and share their approaches so other companies can learn from their successes.
The data forming the basis of the rankings are based on aggregated numbers representing tech workers’ perceptions of leading companies across multiple dimensions of key employer attractiveness factors in the US. We then translated those numbers into graded levels for the comparison rankings. Inclusion of the companies considered for assessing tech workers’ perceptions and the ultimate ranking was based on market share metrics.
Our inaugural report features the rankings of the top employers (among the largest companies) in each of three industries, as follows:
- New York Life
- Liberty Mutual
- Northwestern Mutual
- American Family Insurance
- Marsh & McLennan
- State Farm
US Tech Companies
- Meta (Facebook)
Financial Services Companies
- Alliance Bernstein
- Capital One
- Capital Group
- TD Bank
- Franklin Templeton
- U.S. Bank
What approach are these top-ranked employers taking to build and maintain a talented tech team? Before looking at that, it is important to understand the difficult, complex issues involved, as the issues shape the approach.
Why the challenge is so difficult
Attracting and retaining a talented tech team is simple in theory but difficult in practice. Why? Because of its elusive nature. There are many different issues to navigate and many different stakeholders to align. Also, this is a constantly evolving, never-ending journey.
The approach also must influence and align all stakeholders. They are a diverse group with differing interests and needs and include HR, finance, the CFO, business units, procurement, consultants, and service providers that are part of the company’s ecosystem and sources that are part of the ongoing tech delivery supply chain. Influencing and aligning these different factions with the CIO’s effort to attract and retain a talented tech team is a formidable task.
Add to that the employees themselves. We currently have four cohorts in the tech workforce – Boomers, Gen X, Millennials, and Gen Z (Zoomers). Managing four very different cohorts in the same workforce is yet another formidable task.
Attrition, wage inflation, and recession
Along with the issues I just cited, add the growing prospect of a recession. The market is already challenging with a critical IT and engineering skills shortage. Companies currently face an imbalance of demand and supply with a very overheated talent market. This is exacerbated by attrition rates (now 23-25%) and wage inflation. Wages, of course, vary by role and geography; and the wage inflation problem exists in the US, the UK, Eastern Europe, and India.
For the past year, wage inflation for some roles in internal tech teams in US companies rose dramatically. Examples: Wage inflation rose to 18-24% for Cybersecurity Architects, 22-30% for Senior Data Scientists, and 6-10% for Mobile Developers.
Even in a recession, it is likely that there will still be wage inflation for the roles with skills that are in demand. It is important to realize that, even if a recession causes attrition to slow and wage inflation to drop, the fundamental challenge of attracting and retaining an outstanding tech team never goes away. The factors involved in the challenge can change over time, but the challenge remains.
Approach used by top employers
So, how are the companies in our Top Employers for Tech Talent program approaching these difficult, complex issues?
They achieve their outstanding record by focusing on several dimensions. They pay their talent a competitive compensation. They focus on the work environment, which goes beyond just having good facilities. They create a sense of mission in which employees are able to buy into the company and the team’s missions and have a sense of purpose and belonging.
These top employers also ensure a diverse and inclusive work environment where all employees know they have an opportunity to be included and to advance in the company. These employers make commitments to ensure this work environment is authentic. Consequently, employees feel empowered and enthusiastic about staying and contributing to the company goals.
As we looked across 200+ organizations and examined the factors that drive high employee satisfaction, culture emerged as the #1 dimension. The quality of the leadership team and career opportunities were #2 and #3. The research proved that just paying high salaries without investing in the right work environment and culture translates to poor employee satisfaction.
Capability for building and maintaining the tech team
Navigating this complex, ever-changing journey is beyond the capabilities of just the CIO. It requires decisions across many issues that constantly change over a lengthy period, and it requires aligning many different stakeholders that the CIO does not directly control.
It is important to recognize that this task is a journey. The companies ranked at the top in our program succeeded in their efforts, but it was not an overnight success. There are a lot of dimensions and decisions on the journey. They have been working on this challenge for years and likely will continue to work out the issues. They work through economic recessions and booms, times of talent scarcity and surplus, and different degrees of funding.
The success of the top-ranked employers in our program exemplifies the need for a multi-dimensional and multi-stakeholder approach and making informed, data-driven decisions. They need to orchestrate many moving pieces over time.
In addition, the CIO must battle against the tyranny of the urgent. It is easy to lose sight of the broader challenge when overwhelmed with projects, initiatives, and budgets that dominate day-to-day activities.
Yet, it is doable if the CIO builds a vision for navigating the ongoing journey with good data to support what is happening in the company’s market and industry.
Companies that do not take this approach to attract and retain an outstanding tech talent team impede their ability to execute their vision and obligations. Yes, they can hire talent, but will the talent stay? Does the company have a great work culture that employees want to embrace? With the rising rate of attrition, will the company be able to keep a persistent team moving forward so the company does not lose productivity and knowledge when team members move on to other projects? Will the company have effective measures in place to motivate the tech team?
The market and industry data and the approach that top employers take will get a company to a strong place where the CIO can attract and retain a great tech team. Everything gets easier after that. CIOs that take this approach will be up to meeting whatever challenges their company presents and succeed in the most important success factor: attracting and retaining a talented tech team.