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Why So Many Companies Are Letting Their Best Tech Talent Go

Why So Many Companies Are Letting Their Best Tech Talent Go

Talk to most CIOs and they will tell you the ability to attract quality technical staff is one of their top challenges. Projects need to move at a fast pace, and IT Managers find it difficult to find candidates that have the right skills, enough experience and the ability to communicate well and juggle multiple projects. Finding the right candidate is time consuming – time that could be spent accomplishing the backlog of projects. But there is nothing more frustrating than losing a quality employee to inflexible salary increase policies.

Salary increase budgets are important to keep costs from skyrocketing out of control and preventing an organization from being profitable. But there needs to be some flexible policies for niche positions in technology, where it is actually costing the organization money and productivity by losing bright, upwardly mobile technology employees.

Take an individual who is hired as a support person in IT. Someone who shows potential can get moved into an administrator position. They have received some formal training, but more importantly they have taught themselves a lot while on the job. And a really bright admin can move into an engineering role. After spending time in this position they are extremely more valuable; they have gained essential knowledge of how your systems and applications work. If you compared them to someone from the outside with the exact same technical skills, they would be exponentially more proficient because of that environmental-specific knowledge. But with traditional compensation policies you are destined to lose that talent.

[Related: This is What Women Care About When Looking for a Job]

According to the Society for Human Resource Managers, the average salary increase in 2015 was 3%. HR policies and budgets usually prevent managers from giving even high-performing employees much more than .75% above the average. After a few years, that employee has become extremely valuable and marketable, but their salary has not kept pace. Even if you want to promote an outstanding employee into a role that is a couple of levels up, policies and executive intolerance for substantial dollar increases are going to prevent you from compensating them properly.

But when the employee leaves the company, you can replace them at a much higher salary than you could pay them, because you are allowed to hire at (or closer to) the market salary. Administrative policy forces you to pay more money for the new employee than the employee who had years of in-house knowledge. This is an age-old problem that exists at almost every company with traditional merit increase policies. 

As technology moves at a faster pace, and the competition for qualified IT talent becomes more intense, the problem becomes more acute. According to a 2015 Harvey Nash Technology Survey, 4 in 10 technologists changed jobs last year, with 77% reporting salary as the main motivator.

There are other ways besides compensation to incentivize employees to stay. Flexible workdays can be a tremendous motivator. Parents really value the ability to start their day earlier or later, so that one parent can bring their child to daycare/school while the other parent handles the “pickup” shift. It is also important to try and accommodate requests for time off when at all possible.

Giving employees challenging projects is another important incentive. The ability to learn emerging or different technologies is a huge motivator; so is the ability for the employee to have input and contribute their ideas. The more that you accommodate an employee and show them they are appreciated, the more likely they will accept their compensation.

IT has to work with HR to develop more flexible policies to allow for additional increases for exceptional employees. These increases can be tied to projects, certifications and/or training, or can be on the spot awards. Not every tech employee needs to have supplemental increases. But there needs to be a framework to compensate and retain fast-tracked employees. Otherwise, you are destined to lose many of your best and brightest; and it is costing the company in real dollars as well as lost productivity.

[Read More: Look Outside the Office Window to Identify Employees' Hidden Talents]


Risé F. Jacobs is a Senior IT Executive with over 20 years’ experience managing technology teams. Ms. Jacobs holds an MBA and several IT certifications.

Have more questions? Follow up with the expert herself.