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Why is it Difficult to Manage Tech Talent?

Companies are finding it increasingly difficult to attract, retain and manage technical talent.  Especially if your business operates in Chicago, Detroit or Austin.  These cities are actually seeing the demand for tech talent grow faster than the supply.  Companies are finding it harder to compete for talent than technical hubs like San Francisco, San Jose and Raleigh/Durham.

Smaller startups, non-profits, and rapidly growing companies are finding a dry well when it comes to the pool of talent.  But what has changed?   A major factor is the demographic of the supply has changed.   The emergence of Millennials and Gen-Y in the workforce has had a significant impact on retention rates at companies.  This is evident in increased employee turnover, a growing mobile workforce and people moving to areas they want to live and work remotely.  If a collaborative environment doesn’t exist in a multi-generational workforce, people will leave. In addition, new college grads are motivated more on values, quality of life, experiences provided and the ability to learn.

Mobile WorkforceThis generation is collaborative and wants to contribute to the greater good in how they spend their time working and living.  They place a high value on learning experiences and challenges because it helps them evolve as humans and contributors to society.  This may sound far-fetched, but the motivation of compensation is becoming a smaller part of a candidates decision on where to work and if they should stay.

Some good news emerging from the trends of 2016 include an improved business climate, better access to capital, hiring will continue, and the workforce will become even more mobile.  In a Pricewaterhouse Coopers study, 78% of millennials believe that access to the technology they like will make them more effective and 41% would prefer to communicate electronically.  Chief Economist of Goldman Sachs, Jan Hatzius stated the economy is expected to grow at 2.25% of GDP and in a Bank of America study 35% of small business owners plan to apply for loans in 2016. Which is an 11% increase over 2015.

With a positive outlook the need for tech talent will only grow as the workforce becomes more mobile, along with increased marketing spend on e-commerce, social media, communications and mobile marketing.  This will also place significant demands on data security, cloud computing, analytics and business intelligence.

There are several emerging trends and best practices when it comes to attracting, retaining and managing tech talent:

  1. As companies become more diverse, younger and the Millennial generation grows in the work force it is important that the company outlines its values. All aspects of recruiting, employee evaluations and company decisions related to benefits, operations and business practices should be aligned with those values.   The new generational workforce makes choices and stays with a company if the company follows through on their values.
  1. Become more creative in your benefits offering.  Small companies are finding it difficult to compete with large companies that can attract talent with larger salaries.  Common cost effective ways to attract and retain tech talent by small companies include:
    • Pay for the employee health and benefit premiums 100% and allow their spouse and children on the company plans at cost via payroll deduction.  This places every employee on a level and equal playing field regardless of family size.  This also differentiates the company from traditional benefit policies of larger companies.
    • Eliminate sick, vacation days and paid time off (PTO) policies and move to unlimited paid time off.  This program sounds scary, but time off still needs to be approved so it is not abused and the company should perform regular evaluations of employee performance to ensure employee career and performance goals are aligned with the company.  Without time off approval and regular employee evaluations, this paid time off policy change would not be effective.
    • Discounted and or paid services for the employee that alleviate the stress of their home life is deemed a bigger benefit, for example:  Paid or discounted house cleaning services,  health insurance for pets, subsidized commuter costs, bike sharing program, in office bike storage and shower/changing facilities, subsidized or paid memberships to cultural institutions, etc.
  1. Companies with IT departments of 1 – 8 should even consider outsourcing IT to a local provider which can provide dedicated local and on-site resources as part of a monthly fixed cost. This transfers the risk of tech talent management to the service provider.  In addition, this gives the company a deeper and wider skill set of resources, increases reliability and improves retention since resources are shared from a larger pool of talent.
  1. When performing recruiting, establish a company benchmark for behavioral traits. The company’s most successful employees should be emulated and aligned with recruiting efforts.  This will allow the company to improve employee retention and performance.  Recruiting will then revolve around behavior traits to strengthen the company culture.

As the workforce becomes more diverse in its needs so should the business approach change to adapt.  This research, trends and emerging best practices was presented at a tech conference in Chicago by SAGIN’s CEO Richard Sypniewski in November 2016.  For more information on managing talent, recruiting or IT managed services you can contact us at or +1.312.281.0290

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