A lot of engineering managers get this as part of their KPIs – employee retention. I’ve definitely had to deal with it at some point in my career and it wasn’t a particularly motivating objective.
Don’t get me wrong – I get why this is important to most companies. We spend months or even years training and mentoring people to be effective at their jobs. It would be a shame if they left as soon as we start getting a return on that investment.
But the way I see it, employee retention is a bonus for a job well done, and not a job in itself. Keeping an eye too much on employee retention as a statistic could mean we’re overlooking the things that actually make an employee stay.
How bad is it, really?
It doesn’t have to be, but I’ve seen a lot of negative things happen in a company resulting from a fear of losing employees.
Probably the two worst things I’ve seen as a result of this is a lack of feedback and a lack of transparency. When you’re afraid to lose people, you tend to mince your words and try and keep the status quo as much as possible. Ironically, the lack of communication and feelings of stagnation are often reasons for people leaving. It becomes a vicious cycle.
There’s also a case of people who were competent at their jobs being unfortunately mismatched to a new job just because they asked for it. Apparently, having people in other teams within the company is better than having them out of the company. The reality is though, someone working a job that doesn’t fit doesn’t help himself nor the company in doing so.
It gets exceptionally bad when upper management takes little responsibility in keeping the retention up but expects line management to figure out how to prevent people from leaving. Sadly, it’s often outside their circle of influence to do so. Here’s why.
A fair exchange of value
Employment, like any business transaction, is basically a value exchange. People stay if they’re getting the same value as they’re putting in. Likewise, companies hold on to people if the value is at least equivalent on their end.
The most tangible way to measure value is money, obviously. So I wouldn’t doubt that this is always a factor in whether an employee stays or not. But there are other things that can be of value to an employee. There’s learning opportunities, potential career growth, recognition and prestige, a healthy team culture, and much more.
The tricky part is that value is subjective and depending on how it aligns to a person or a company’s goals, the value of the same exact thing could vary widely. Timing is also a factor, as certain skills (on the employee’s end) and benefits (on the company’s end) may only be valuable for a limited timeframe and in certain conditions.
In the context of software, things get even trickier.
Valuing creativity
Software development is mostly a pursuit of creativity and as with anything creative, it’s difficult to put a hard number to its value. The industry at large has struggled for decades to come up with legitimately useful ways to measure how “skillful” a software engineer is.
It’s rarely a good idea to try and valuate a software developer’s “skills” as it is. It’s tempting to rate skill as a value on a linear scale, but it just doesn’t work that way in creative jobs. What makes more sense is to evaluate (probably with just your best guess) whether or not a developer can do what you need them to do at any point in time and how important that work would be to you as a company.
Supply and demand
Another thing that complicates value assessment is supply and demand. When these two variables change, your entire value exchange may end up tilted. Competition increases. In more regulated industries, this risk is quite controlled since there are standards that define value.
In software though, you can try and do a competitor analysis and you’ll get a super wide range of results that are next to impossible to make sense of. It gets incrementally worse the higher you go up the ranks. It’s a young industry and every company offers unique values, and every new startup has some wild employee engagement idea that candidates just seem to love.
Basically, what I’m saying is, it’s noble to try and look into this. But in our world of software, I’m ready to concede that this is probably a factor that’s beyond our influence, at least for now. It’s probably best to look beyond the competition if you want to provide value that gets your employees to stay.
What It All Means
Employment is simply that – a fair exchange of value. If an employee isn’t getting the value he feels his work is worth, he or she will look elsewhere. Likewise, if the company for any reason can’t give the value an employee is looking for, was the employee really all that valuable to the company in the first place?
If the tables were turned and the company decides to let go of an under-performing employee, I bet it sounds a lot more sensible to most people. As a matter of fact, it works just the same vice versa.
Here’s what I think management should do more of, instead of focusing on employee retention.
Assess Values and Goals
I think it all starts in the recruitment and hiring process. A lot of recruiters and hiring managers forget to factor in how well a person’s values align to that of the company. Another thing that’s even more often overlooked is what value the company can give to a person’s long term career goals. There’s a tendency to focus too much on skills and compensation, but often an alignment in goals tends to have a bigger impact in the grand scheme of things.
Be Transparent
Transparency, no matter how scary, is important in keeping the value exchange fair for all parties. Consistently let the employee know what he’s worth to the company and what the company is able to give in return. Try not to oversell. Also, make sure the employee knows how to grow his or her value, and that they understand whether the company would actually be able to give them equivalent value in return.
Setting these expectations will likely get your employees to be more aware of their value and how they can grow it, and that’s always a good thing for the company.
Assess and Mitigate Your Risks
There’s probably one reason you’re afraid of losing employees – you don’t know how to replace their skills and you’re afraid of wasting years of training effort. Let’s face it though – training is a sunk cost, and you’re probably wasting more money on someone who isn’t getting fair value.
Mitigate your risk, instead, by cross training and having a clear succession plan. I know, it’s not as easy as it sounds, and no one is ever immediately replaceable. But if you encourage a culture of learning and are willing to spend on improving your organization, you should at least feel more at ease with the thought of eventually losing your star engineer.
Finally…
It’s important to accept the fact that sometimes people just outgrow companies and that’s completely fine. Growth happens at different paces and sometimes, it’s best for both parties to move forward towards a more optimal value exchange. As a company, take it as an opportunity to hire or promote someone who can better grow alongside you.
In the end, if you’re afraid of losing employees, you’re probably doing something wrong. And it often has nothing to do with employee retention.
Dexter is an engineering manager at Synacy, a co-founder of ATeam Business Software Solutions, and founder of TechManagement.Life. He loves to share his experiences and thoughts on managing software teams and running businesses.
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