We discussed this last week in a workshop with the great team at Frank Recruitment Group, a global niche technology recruitment specialist. They conducted a comprehensive survey of prospective job candidates to learn about how to attract and retain tech talent.
Here are the key takeaways:
- Over 85% of the professionals are inactive, i.e., not on the lookout for a new job
- Remarkably, this implies that any job opening plainly posted on the main internet channels (e.g., Linkedin, XING) is reaching about 15% of the talent pool. In other terms, the post-and-wait strategy is simply insufficient and might require a degree of active talent sourcing by the employer, whether via networking or service professionals.
- Remarkably, this implies that any job opening plainly posted on the main internet channels (e.g., Linkedin, XING) is reaching about 15% of the talent pool. In other terms, the post-and-wait strategy is simply insufficient and might require a degree of active talent sourcing by the employer, whether via networking or service professionals.
- Salary is key, but not the only factor causing tech professionals to leave their job
- Unsurprisingly, among the top five reasons why tech professionals leave their jobs, salary is one that is mentioned by half of the respondents. However, other factors agreed upon by 30%+ participants include: career prospects, exposure to the latest tech stack, lack of responsibility, as well as a good working environment. Knowing that cash is typically a scarce resource, this indicates that a technology venture (which, by definition, is working on the latest tech stack) should focus their job offers on the factors described above.
- Unsurprisingly, among the top five reasons why tech professionals leave their jobs, salary is one that is mentioned by half of the respondents. However, other factors agreed upon by 30%+ participants include: career prospects, exposure to the latest tech stack, lack of responsibility, as well as a good working environment. Knowing that cash is typically a scarce resource, this indicates that a technology venture (which, by definition, is working on the latest tech stack) should focus their job offers on the factors described above.
- Remote work, diversity, and training are key attraction and retention levers
- Three approaches that attract: remote working (flexible at-home and in-office) is a staple in the post-COVID world, hence it is recommendable to find a suitable balance to implement this; Diversity, inclusion, and equality are increasingly pressing, to the point where they can make or break a key hire between an employer who has a clear related policy and one who does not; Lifelong learning and training (e.g., new certifications or skill development courses) is a highly regarded perk, creating a sense of belonging and commitment to the company. Although requiring a cash investment, the “return” in attraction and retention effects is usually strong. Most importantly, the recommendation is to include these in your job description.
- Three approaches that attract: remote working (flexible at-home and in-office) is a staple in the post-COVID world, hence it is recommendable to find a suitable balance to implement this; Diversity, inclusion, and equality are increasingly pressing, to the point where they can make or break a key hire between an employer who has a clear related policy and one who does not; Lifelong learning and training (e.g., new certifications or skill development courses) is a highly regarded perk, creating a sense of belonging and commitment to the company. Although requiring a cash investment, the “return” in attraction and retention effects is usually strong. Most importantly, the recommendation is to include these in your job description.
- Equity-based compensation is getting better understood
- A long-term incentive plan (“LTIP”), typically in the form of an equity-based incentive scheme, is getting increasingly sought after by candidates. While still a contentious topic in Europe, where candidates typically prefer cash-based compensation, more than 20% of respondents indicate this is a key decision factor. For early-stage ventures, this is a great tool to retain and motivate employees towards the company’s success. Europe still has a few regulatory and tax challenges that are still hindering a broad deployment of equity compensation, but it is undeniable that this should be leveraged – particularly for senior hires.
- A long-term incentive plan (“LTIP”), typically in the form of an equity-based incentive scheme, is getting increasingly sought after by candidates. While still a contentious topic in Europe, where candidates typically prefer cash-based compensation, more than 20% of respondents indicate this is a key decision factor. For early-stage ventures, this is a great tool to retain and motivate employees towards the company’s success. Europe still has a few regulatory and tax challenges that are still hindering a broad deployment of equity compensation, but it is undeniable that this should be leveraged – particularly for senior hires.
- Speed is critical to secure your preferred hires
- Finally, a very important statement with respect to the recruitment process: Once you engage with a favourable candidate, move fast. Today’s market conditions are in favor of candidates, with demand much higher than supply. This results in candidates having five offers on the table on average. Subsequently, they have multiple open options at any given time. Hence, moving quickly is a key lever to beat the other vendors, particularly the process-heavy ones.