The competition for top tech talent is fierce. According to global consulting firm Bain & Company, almost 75% of technical companies report talent gaps. And despite layoffs across the industry, CompTIA, one of the industry’s major trade associations, expects demand to grow. It predicts an increase of almost 1% in the UK, and more than 3% in the US this year. Over the next decade, the projected growth rate of tech jobs in the US is almost twice the national rate.
The skills shortage is exacerbated by the fact that companies have a hard time holding onto workers with tech skills. A Harvard Business Review survey of 230 organisations found that only 13% of employers can attract and retain the tech talent they need most. Based on research by The Linux Foundation, almost a third of new hires leave within six months of being onboarded. This is not only incredibly costly, but also indicates a misalignment of expectations.
The question, then, is where the problem lies, and how companies can identify and address potential issues early on.
What do tech workers want?
As more companies rush to adopt generative AI, the demand for AI engineers is particularly high. According to LinkedIn, relevant job posts more than doubled in the past months. Felipe Calderero, CPTO at AI retail platform Ladorian, believes learning opportunities are key in attracting and retaining top tech talent – especially in the realm of AI. “They are not afraid of not having a job. If the salary is OK, the key part is learning and being able to work on a project that is challenging,” he explains.
A Harvard Business Review survey of 500 tech employees globally confirms this. It shows that, excluding pay considerations, tech workers most often leave because of a lack of learning opportunities, flexibility and recognition.
While distributed teams and flexibility are not new to the industry, it has moved up in priority since the pandemic. A recent YouGov survey of around 1,000 UK tech workers found that 78% consider a flexible working policy the most important factor when applying for a job.
Set realistic expectations early in the hiring process
So tech workers value learning and growth. But although the market for talent is very competitive, employers need to remain honest about the growth opportunities they can provide.
“Overselling is a typical mistake,” says Calderero. “Not everyone does amazing, state-of-the-art deep learning. It’s really fun when you read the job descriptions, but the frustration comes from, ‘Okay, this is not the project I was sold. This is not what I expected.’”
For firms that realistically cannot compete on salary, Calderero recommends hiring for potential. Timo Horstschaefer, co-founder and CTO of equity management platform Ledgy, took this approach and used it also as an opportunity to increase diversity early on. The company achieved a rare 50:50 gender split in engineering by introducing a Women in Web Traineeship.
The programme had a compounding effect. “From the traineeship so far, it’s 100% retention,” says Horstschaefer. “On the website, it stands out that there are many women in the engineering team. We also mention the traineeship in our job descriptions as proof that we live diversity. We use it for marketing purposes to attract diverse talent.”
Programmes like these are valuable for a variety of reasons. The Harvard Business Review survey found that diversity in the workforce is important for attracting new talent, while programmes that encourage inclusion have a positive impact on talent retention.
In terms of building an attractive engineering culture, Horstschaefer emphasises the need to embrace new technology: “In the end, you need to win with innovation. Give people space to look into new technology and try new things, even if they fail.” This can also make less challenging tasks more exciting by, for example, allowing people to automate repetitive tasks. But balance is key. “You also need to be careful not to overengineer it,” he cautions.
From attraction to retention: how to hold onto the talent you’ve got
Andreas Ehn is CTO, partner at tech due diligence consultancy, Approach, and was the first employee (and tech chief) at Spotify. He has found that internal politics are a common reason that tech workers decide to leave. Spotify was conscious of this early on, he says: “We tried to insulate developers from the bureaucracy of the rest of the organisation as it grew. We made sure engineers could focus as much as possible on solving problems by minimising meetings. As an engineering manager you can probably only do that with the support of the CEO. The CEO needs to understand this and support it.”
Ehn also highlights the importance of setting clear and realistic career progression plans for more experienced developers and engineers looking to move into management roles. But here, too, flexibility is key. While career progression has historically meant moving into people management roles, leaders must remember that people skills and technical skills are quite different. “It’s not common to find both skill sets in the same individual,” he cautions.
For companies that are running into retention problems, remaining objective during exit interviews can help identify the problem. Ehn thinks it’s important to distinguish between people leaving for something and those leaving from something. “If you look at your numbers and you see many people leave not for a new job but because of a problem in their existing one, then you have to rethink your current set-up.”
But as a general piece of advice, Ehn thinks companies should not compromise on talent, unless they absolutely need to. Insisting on high standards for hiring and recruitment can itself help attract and retain talent. “If you’re a really talented engineer, you want to work with other really talented engineers,” he explains.