How to cope with employee turnover in IT

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How to cope with employee turnover in IT
IT Outsourcing

In the tech world, companies often face a common problem - employees leaving. This is especially tricky when it comes to IT developers. As the need for specific skills grows and the competition for the best IT experts gets tougher,  companies are facing a challenging situation.

Traditional strategies for dealing with employee turnover have been commonly used. These involve improving pay, offering flexible schedules, and building a positive company culture. Even companies offering weekly haircuts, massages, yoga and dance lessons, not to mention free lunches, fruits and alcoholic beverages, have realised that this is not enough to keep employees loyal.

The nature of IT work, with its demand for specialized skills, can lead employees to seek new opportunities despite these efforts.  When you're overseeing a major project, a high rate of employee turnover can be highly disruptive - something you simply cannot afford! In response, a new solution has emerged - IT outsourcing. This approach offers a more flexible way to handle turnover and meet the changing demands of the IT world.

Why do developers leave companies?

The IT industry operates in an environment characterised by rapid technological advancements and a very competitive job market. It's crucial to know why employees are leaving their jobs because that helps us create plans to solve the issue. We can come up with strategies to keep the IT workforce, the people who work in IT, strong and capable of facing these challenges. There are 3 primary factors that make developers to leave their companies:

  • Demand for specialized skills - IT professionals need to keep learning new skills and stay updated with the latest tools and techniques. This continuous quest for improvement can lead them to explore new job opportunities that offer a platform for personal and professional growth.
  • Intense competition - There are numerous job opportunities available, each with its own set of advantages and challenges. This competitive landscape not only keeps IT professionals in high demand but also encourages them to consider new roles. They might be enticed by better pay, enhanced career prospects, or positions that align more closely with their long-term goals.
  • Workload and burnout - The IT sector is known for its demanding projects, often characterized by tight deadlines and a constant drive for innovation. While these challenges can be motivating, they can also lead to burnout if not managed effectively. Maintaining a healthy work-life balance becomes increasingly difficult in such circumstances. When employees consistently feel overwhelmed and struggle to find balance, they may start looking for jobs that offer a more manageable workload. 
Infographic showing reasons developers leave companies

Impacts of employee turnover

Employee turnover in the IT sector has consequences that reach well beyond a change in personnel. It involves both short-term and long-term consequences that spread through projects, teams, and the overall development of a company.

Important aspect is its impact on team morale and collaboration. Frequent turnover can erode team morale and cohesion. When colleagues witness a constant flow of departing team members, it can lead to demotivation and make it challenging to establish effective working relationships. This, in turn, can hamper collaboration and teamwork, which are essential for project success. In contrast, outsourcing arrangements often come with a clear understanding that the individuals involved may change over time as project needs evolve. Team members are more likely to accept this as part of the outsourcing model, reducing the negative impact on morale. It sets realistic expectations from the start and helps maintain a focus on project goals and outcomes, rather than being overly preoccupied with personnel changes. This can contribute to a more positive and resilient team environment, ultimately benefiting project success.

Furthermore, there is a knowledge drain associated with employee turnover. Skilled employees who leave take valuable institutional knowledge with them. This knowledge gap can hinder ongoing projects and impede the transfer of best practices and lessons learned. It may take time for new employees to reach the same level of expertise, potentially causing disruptions in project quality and efficiency.

Lastly, there are cost and productivity impacts. The process of hiring and training new employees incurs costs that directly affect a company's finances. Moreover, the transition period when new employees are onboarded can lead to a decrease in team productivity, which affects overall project output. These financial and productivity setbacks can have lasting implications for a company's performance.

In summary, employee turnover within the IT sector goes well beyond a surface-level change. It disrupts projects, affects team dynamics, results in a loss of valuable knowledge, and incurs both financial and productivity costs, all of which can significantly impact a company's growth and success.

Traditional Solutions for Dealing with Employee Turnover

When it comes to dealing with employees leaving, there are some classic methods that companies have used for a while. These standard approaches focus on making the workplace better and more attractive to keep employees around. Some of these approaches are:

  • Employee benefits - companies have long recognized that providing competitive benefits like health insurance, retirement plans, and flexible work arrangements can encourage employees to stay. These benefits not only improve the overall work experience for current employees but also enhance the company's attractiveness to potential hires.
  • Cultivating a positive work environment -  another traditional method involves creating a work atmosphere where employees feel appreciated, valued, and engaged. This might involve team-building activities, mentorship programs, or fostering an inclusive and supportive workplace.
  • Investment in skill development -  when employees see a path for personal and professional growth within their current organization, they are more likely to stay. Investing in workshops, courses, and certifications not only enhances employee skills but also reinforces their commitment to the company.
  • Internal Promotions - When employees see that hard work and dedication can lead to career advancement, they are more likely to remain loyal. Internal promotions not only boost morale but also demonstrate that the company values and recognizes the contributions of its staff.
  • Mentorship Programs - Seasoned employees can guide and support newer team members, helping them navigate challenges and grow in their roles. These programs not only aid in skill development but also create a sense of belonging and community within the organization.

However, it's important to recognize that these practices have become quite commonplace in the industry, particularly within the competitive IT market. When considering a job change, employees often find that similar benefits and work culture exist in other companies as well. Consequently, relying solely on these measures may not be sufficient to convince employees to remain with their current company.

Rethinking Employee Retention in the Dynamic IT Landscape

However, things are changing, and these usual methods, while valuable, might not be enough in today's fast-moving work world. Especially in the IT industry, dealing with employees leaving requires a different approach. It's not just about keeping current employees but also about getting ready for a future where turnover is a regular part of reality in IT.

What's needed now are strategies that are more forward-looking and proactive. These strategies aren't just about making today's workplace better; they're about preparing for what's coming next. In a landscape where skills and job roles are always shifting, companies need to adjust. They have to look beyond the present and think strategically about the future.

In the upcoming sections, we'll explore the modern approach of IT outsourcing, which addresses employee turnover while providing tailored advantages for the IT industry's dynamic demands

What is IT outsourcing?

IT outsourcing is a strategic practice where companies partner with external organizations or service providers to acquire the expertise of skilled IT professionals for specific projects or tasks. Unlike traditional hiring, this approach offers adaptability and scalability without the obligation of long-term employment, essentially enabling organizations to "lease" specialized talent for project-specific needs.

Potential advantages over traditional hiring

  • Access skilled professionals without permanent commitment - IT Outsourcing provides access to specialized talent without the need for permanent employment. Companies can tap into a skilled workforce, tailored to their project needs, eliminating the commitment of full-time hiring.
  • Flexible scalability for projects - Employee turnover can lead to fluctuating workforce needs.  IT Outsourcing offers agility, enabling organizations to quickly scale their IT workforce based on project requirements. This ensures resource optimization and efficient workload management.
  • Cost savings compared to in-house teams - Maintaining in-house IT teams involves fixed expenses. IT outsourcing offers potential cost savings as organizations only pay for IT services when needed. This cost-efficient approach optimizes budgets while providing access to skilled professionals.

Considering the advantages of IT outsourcing over traditional hiring, it's clear that this approach can provide your organization with the flexibility and expertise needed to navigate the challenges of employee turnover. If you're looking to make the best decisions for your company's IT workforce and project needs, consultants from SKM Group are ready to assist you. We can help you tailor the right outsourcing solution to match your specific requirements and goals, ensuring the success and resilience of your projects.

Choosing the Right Partner

Selecting the ideal partner is a critical decision in the process of outsourcing IT functions. It can significantly impact the success of your projects and how effectively you manage employee turnover. Below you will find 3 most important criteria to consider when making a decision.

  • Track record of successful projects - begin by evaluating the outsourcing provider's track record. Review their portfolio of completed projects, paying close attention to the complexity and scale of those projects. Successful project outcomes demonstrate their competence and reliability.
  • Range of expertise and available skills -  Assess the breadth of expertise within their talent pool. Ensure that they offer a wide spectrum of IT skills that align with your project requirements. Inquire about their ability to scale teams up or down, which is crucial in managing employee turnover.
  • Compatibility with company culture and values -  engage in discussions with potential partners to gauge their alignment with your company's culture and values. Share your organization's work culture and expectations and assess their willingness to adapt and collaborate effectively within your environment.

A reliable and experienced partner, with a history of successful projects, a diverse range of skills, and shared values with your organization, is crucial for ensuring project consistency and success in the ever-changing IT landscape. If you have any doubts about the suitability of outsourcing for your company, please don't hesitate to contact SKM Group consultants. They can help you determine if our partnership aligns with your specific needs and goals.

Conclusion - Strengthening project resilience from IT Employee Turnover

Outsourcing isn't just a way to reduce costs; it's a strategic approach to maintaining IT stability and continuity. By partnering with external IT service providers, companies can access specialized expertise, minimize the disruptions caused by turnover, and free up internal resources for more strategic tasks. The role of outsourcing in mitigating IT turnover cannot be understated—it's a proactive measure to safeguard your IT operations.

We strongly encourage companies facing IT turnover challenges to explore outsourcing as a viable solution. By taking the time to assess your specific needs, research potential outsourcing partners, and carefully plan the transition, you can unlock the full potential of outsourcing. It's not just about filling gaps; it's about building a resilient IT infrastructure that can adapt to changing demands and market dynamics.

At SKM Group, we specialize in IT outsourcing services, and our expertise can help you make informed decisions for your company. To learn more about our IT outsourcing services and how we can tailor a solution to meet your specific needs, please visit our IT Outsourcing Services page.

To further illustrate the real-world benefits of IT outsourcing, we invite you to read our case study with PwC, a multinational professional services network. This case study demonstrates how outsourcing played a pivotal role in addressing their IT workforce challenges, enhancing operational efficiency, and ultimately contributing to their success. To read more about this case study, please follow this link

About The Author
Mateusz Kopacz

Mateusz is a seasoned professional in project management and software development. He is currently CEO at SKM Group, where he oversees projects and programmers, ensuring their successful execution. Additionally, he plays a vital role in shaping corporate strategy, driving product development, and spearheading business development and key account management efforts.