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Turnover Rate: What It Is and How to Decrease It

Turnover Rate can be a huge issue at tech companies

In recent years, reducing the turnover rate at tech teams has become a challenge for many companies – even for the giants, such as Amazon, Google, and Microsoft.

To give you an idea, a study by Hays Executive showed that employee turnover in the area is one of the highest in the market, mainly due to the growing demand for software engineers and development professionals.

The fact is that business rates like turnover rates can bring a significant impact on companies, after all, they have a direct impact on the drop in employee productivity.

In this context, it is essential that HR and managers adopt best practices to avoid high levels of turnover.

If you want to stay on top of them, then you’ve come to the right place. Check out, below, the tips we have prepared to help you reduce your company’s IT business volume and, thus, build a high-performance team.

Good reading! 😄

What is the employee turnover rate?

If your primary goal is to improve your company’s talent retention, the first step is to master one of the most important concepts for anyone working with HR and people management: turnover rate.

For those unfamiliar, turnover rate specifically measures the number of employees leaving an organization over a period of time.

This is a very important KPI to monitor because, in general, turnover does not come cheap for companies.

In addition to the expenses involved in the dismissal of the professional, hiring a new employee costs up to 30% more than retaining them through engagement actions.

Why the turnover rate is so important?

As we said earlier, staff turnover is a very costly process for companies. But this is not the only point of attention that the subject brings.

High turnover rates should also be seen as a symptom that the company is not pleasing the people who are part of it. In the long term, this can have catastrophic impacts on the organization’s image as an employer brand.

In addition, a high turnover also affects the performance of the team in general. And lower performance consequently leads to lost money and business stagnation.

It is worth remembering that, in short, there are basically two types of turnover in IT:

  • Voluntary turnover: when layoffs leave the company. Generally, it indicates failures in the recruitment and selection process;
  • Involuntary turnover: when layoffs come from the professional. This case indicates a failure to retain talent, which leads to dissatisfaction and lack of motivation.

The main causes of the turnover rate in the IT market

Remember when we said that the turnover of people in IT is one of the highest in the market? Well, it is estimated that turnover rates in the area reach 13%.

More precisely, people in high positions in the IT field spend an average of 2.6 years in a company. This turnover is considered high since in other sectors the permanence is at 3.8 years on average.

If you’re wondering why this happens, know that there is no single answer. Next, we list the main reasons linked to the high percentages on this front:

1 – A competitive market

Undoubtedly, the growing demand for IT professionals is one of the main reasons for the high turnover of employees in the area.

To give you an idea, the expectation is that the demand for IT professionals in Brazil will reach 420 thousand people by 2024. On the other hand, the country trains only 46 thousand professionals with a technological profile per year.

As you may have noticed, this account doesn’t close, right?

With more open positions than people trained to fill them, it is expected that professionals who are already employed will receive several job offers.

Consequently, this increases the chances of them going from one company to another in a short period of time.

2 – Remuneration and benefits below the market average

The salary and benefits offered (such as health insurance and food stamps) are two factors that weigh heavily when the employee chooses which company he will work for.

With the increase in the number of vacancies in IT, as explained above, it is important that the company is at least concerned with offering a salary that is within the market average.

To have a direction, it is valid to follow the values ​​practiced by the competitors, as well as the other benefits that are offered and desired by the professionals.

Precisely due to the high competitiveness, it is possible to find more and more companies offering benefits that go beyond the traditional. This is the case with organizations that offer perks like scholarships, Gympass, and agreements with therapy platforms, among others.

3 – Lack of a career plan

The lack of growth prospects within a company is one of the main reasons for demotivation at work. Consequently, this can lead employees to look for new opportunities.

Highly qualified employees who are aware of their talents are always looking for better positions and salary increases. When they realize they are not being valued, they open up to new market proposals.

4 – Absence of feedback

Another reason that can demotivate an employee is the lack of feedback from their managers.

In fact, this is a truth that doesn’t just apply to IT professionals. Every professional, regardless of the area, is interested in knowing how their performance is doing and the points they need to improve.

The feedback moment is also the opportunity for managers to better understand their role, as well as to see if something should be done to keep the employee engaged and able to deliver their best.

5 – Communication Problems

The absence of efficient communication with employees can result in a series of problems, such as non-alignment of goals, lack of clarity about the responsibilities of each employee, and conflicts between team members, among others.

Together, these factors can negatively impact the motivation of professionals, making them feel dissatisfied or even exhausted.

In addition, inefficient communication also prevents the manager from identifying these dissatisfactions and thinking about actions to resolve them before the problem becomes even more serious.

6 – Failures in the recruitment process

The process of selecting an IT professional requires a lot of planning and preparation, as it is usually done in stages and it is necessary not only to observe the technical qualification, but also the profile and other behaviors of the professional.

The HR professional responsible for this process needs to know some indicators for hiring IT professionals, in addition to validating whether the company’s culture is aligned with new employees.

When these precautions are neglected, there is a high chance that the company will hire a professional who is not aligned with the business objectives or organizational culture. And that, in turn, can result in an early shutdown.

7 – Leadership failures

One of the roles of the leader is to help employees so that they remain motivated and develop their full potential.

When a leader fails in this role, problems begin to arise, such as reduced engagement and a significant drop in productivity.

All of this has a huge impact on the company and on the relationship with employees, causing layoffs and even dismissal requests from employees.

8 – Bad work environment

Finally, the work environment is also decisive for employees to want or not to continue in a company.

Reflect upon yourself: would you like to continue working in a place that does not offer the necessary resources for you to carry out your activities, such as good furniture and technological tools?

Your answer is probably no.

The same goes for companies that have a bad organizational climate. In both cases, professionals are expected to look for new opportunities and quit without even thinking twice when given the chance.

How can you decrease the employee turnover rate?

Anyway, we come to the most awaited moment of the article: the one where we show you what you can do to avoid or reduce IT turnover in your company.

Spoiler: you will notice that retaining people depends on a series of integrated actions, ranging from assertive hiring and offering good working conditions, to adopting engagement strategies.

1 – Training and professional qualification

Have you ever stopped to think about the speed at which technologies evolve? It is not by chance that the IT area is one of the areas that most require updating from its professionals.

Therefore, providing your employees with training, updates and qualifications can be a crucial factor in retaining them and thus reducing the turnover rate.

Furthermore, we cannot forget that promoting the qualification of employees is, in fact, an investment: as they gain knowledge, the company also benefits from building a more qualified team.

2 – Good leadership

As we have already said, leaders have a very important role in the life of any professional. Therefore, working alongside someone competent, inspiring and charismatic can make a difference in retaining talent.

In other words, having a leader prepared to act according to the influence they have on team morale will make all the difference so that employees are constantly motivated to be there.

3 – Opportunities for growth

To reduce turnover in IT or in any other area, the organization needs to be clear about what it can offer its employees, or rather, what the plans are for these professionals.

In general, companies that have well-structured job, career and salary plans have better chances of retaining talent.

After all, if the talented employee has no career projection within the company and no opportunity for growth, the natural flow is for him to look for someone who offers him that, right?

4 – Benefits and bonuses

In addition to growth opportunities, benefits and bonuses also count a lot in favor of retaining people – especially in companies that still cannot offer high salaries.

Speaking of benefits, they can be both financial and symbolic. In the first case, we can mention the health plans with full coverage, great food/meal tickets, and the offer of gym plans on behalf of the company, among others.

Secondly, there are issues such as the day off on the birthday or when to hit goals, flexible working hours, not having to clock in, working remotely, and so on…

There are several options, so it’s worth being creative to differentiate yourself in the market!

5 – Organizational culture

Remember when we said that a bad organizational climate can also be behind a high IT turnover rate?

Well, the professional environment is almost like a second home for most people and, therefore, they want to feel good there. When that doesn’t happen, the consequences are not good at all…

That’s why your company should always keep an eye on employee satisfaction in relation to the work environment.

The best way to do this is by carrying out an Organizational Climate Survey. In addition to measuring the satisfaction rate of professionals, this strategy can bring a lot of input to engagement actions.

6 – Consistency in the feedback

In addition to the Organizational Climate Survey, constantly monitoring employees through feedback is also an excellent strategy when aiming to reduce the IT turnover rate.

This direct communication between leader and team member favors the construction of more positive relationships at work, helps to reduce conflicts, and also brings important insights for people management.

7 – Organized processes

Contrary to what many people think, the IT sector of companies cannot work just to “put out fires” or solve last-minute problems.

When employees in this area have organized processes and a routine aimed at achieving results, this greatly reduces day-to-day stress.

In fact, the IT sector can even be the main differentiator of a company. But, for this to happen, it is necessary that the team has well-defined the proposed goals and, mainly, that they are achievable and that there is support for this.

8 – Assertive recruitment

An extremely important factor that is often overlooked when talking about IT turnover is the recruitment and selection process (R&S) of professionals.

Undoubtedly, assertive hiring increases the chances of retaining talent. Therefore, every detail of the R&S must be carefully thought out and prepared: the job description, cultural fit interviews, and skills tests, among others.

It may seem complicated at first, but the truth is that, with the right technology in hand, this mission becomes much easier.

GeekHunter’s smart recruitment and selection platform, for example, has already helped many companies hire highly engaged and skilled IT professionals (all in an average of 14 days).

In addition to reducing the IT turnover rate, Geek’s solution also reduces professional acquisition costs.

Final considerations

As you have seen, there are several actions that aim to reduce IT turnover and thus ensure the sustainable growth of organizations.

When companies look at this aspect carefully, they increase their chances of building a high-performing workforce, as well as continuing to hire only the best people on the market.

After all, a large number of satisfied professionals is synonymous with a strong employer brand, which becomes a real magnet for good talent.

Another important point concerns cost reduction: keeping a quality professional who is always up to date is much cheaper than opening a new selection process and training a new employee.

Remember: IT turnover can be extremely harmful to the technology team and also for organizations that want to grow. To prevent this from happening, be sure to put into practice the tips we’ve listed so far.

We hope this article has been helpful to you. If you’re interested to learn more about GeekHunter and how we can help you match with top developers in Latin America, click the button below!

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