Martina Kushwaha November 2022 Sneha Mishra EXECUTIVE SUMMARY Final Question What are the best practices for employee retention within the first two-years for new hires (specifically for software engineering/STEM employees?) Introduction According to a survey conducted by DigitalOcean, about “64% of software developers with less than a year of experience have left their jobs between 2020-2021”.[1] Additionally, 32% of software developers with 1-5 years of experience have left their jobs. [1] These resignations have impacted organizations significantly in terms of retainment and recruitment. According to a survey done by Salesforce’s MuleSoft, “93% of organizations have said [these resignations] have made it more difficult for their IT teams to retain skilled developers and 86% say it has become more difficult to recruit them in the last two years”. [2] The demand for software developers and engineers has been constantly rising with the technological revolution of the 21st century; however, the COVID-19 pandemic has increased the demand for these employees with organizations making digital transformation a priority. While there is a high demand for software engineers and developers, organizations also face high attrition rates for these employees. This executive summary will explore best practices for employee retention within the first two-years specifically for software engineering/STEM new hires. Battling Burnout One root cause of high attrition rates for employees are feelings of burnout. A survey conducted on over 30,000 IT employees found that “2 in 5 workers showed a high risk of burnout” and “42% of those with high levels of burnout risk were considering quitting their company in the next 6 months”. [3] Looking specifically at surveys conducted on software developers it was found that “83% suffered from workplace burnout due to reasons such as high workload, inefficient processes and unclear goals and targets”. [4] To retain new-hires within the first two-years, organizations should consider how to combat burnout. Ways to Combat Burnout Scholarly research and empirical evidence have found that the following actions below are effective ways organizations can combat burnout [5]: a. Employee Autonomy - Managers can encourage direct reports to engage in job crafting. By giving employees autonomy in negotiating the contents of their job, and what projects they can do, it can help employees “better identify with their work” as well as promote “skill and task variety to enhance employee motivation and self-efficacy”. [5] b. Social Support - Research has found that social support helps employees with different stressors. When dealing with work stressors, it is important employees have support from their managers and co-workers to lean on. Ways organizations can do this is by having “managers foster genuine and high-quality relationships with employees”, and “provide opportunities for co-workers to converse or reflect on their work”. [5] c. Performance Management - Performance management can help to combat burnout as it allows employees to get feedback and help them develop their careers. Organizations should promote that “managers provide strengths-based feedback that is timely, frequent, specific, verifiable, consistent, and consequential”. [5] Research found that “when both managers and employees are held accountable for seeing through these [development] plans, employees feel supported socially and tangibly and are ultimately less likely to burn out. Involving employees in the goal-setting process benefits both the employee and the organization”. [5] Prioritizing Developer Experience Along with managing burnout, organizations should also try to create positive engineering environments for software developers. Increased competition for skilled IT engineers from both tech and non-tech sectors and high turnover rates in the technology sector (average employee tenure at Google and Zoom is only 1.3 years)[6] make employee retention a tough challenge for IT organizations. While most companies respond to this with increased pay, research suggests that the relationship between pay and job satisfaction is very weak and this relationship is similar across different cultures.[7] So, for increased retention IT companies should examine their systems and processes to create better developer experience. Ways to Create Developer Experience a. Onboarding- Gallup reports that strong onboarding efforts can improve employee retention by 82% [8]. Employees who have a great onboarding experience are more likely to be satisfied with their workplace and stay with the company. Organizations can leverage software tools to create an engaging onboarding experience that helps the new hires get the critical information they need to succeed in the organization.[9] Engaging with new hires during pre-boarding, gamifying onboarding activities, and developing meaningful relationships among the new hires are some of the strategies pursued by companies to develop their onboarding.[9] b. Work Process - High workloads and inefficient processes are not only a major source of software engineer burnout[4], but also negatively impact employee experience. Leading organizations focus on eliminating procedural bottlenecks in software development for their coders. [10] Creating well integrated development and testing environments, developing empowered teams, and reducing the number of non-core tasks performed by developers are some ways organizations can improve their work processes.[10] One model to consider is the site-reliability-engineering (SRE) approach where specific champions are accountable for eliminating toil for developers so that they can focus on their core activities.[10] c. Career Development- LinkedIn research found that the main reason employees leave their jobs is in search for better career opportunities.[11] Development and growth has been rated as the top priority for career decisions amongst millennials.[12] LinkedIn retains their IT employees by encouraging them to draft their personal “career development plans” that includes what they want to achieve in the organization and the skills they want to develop to achieve those goals.[11] So, creating robust career development options with supporting processes could help organizations attract and retain key talent. Conclusion Having high turnover rates among employees cannot only impact the business financially, but it can also harm a company’s reputation as well as decrease employee morale and productivity. The COVID-19 pandemic has impacted many employees resigning from their jobs and specifically, there is high turnover among software engineers and software developers due to burnout. So, to retain employees, organizations should try to manage burnout as well as develop processes to create better employee experiences. The practices discussed above are not mutually exclusive and require strong leadership and organization culture support to be effective. References 1. DigitalOcean. (n.d.). Currents: The 2022 report on open source and developer trends. DigitalOcean. Retrieved, from https://anchor.digitalocean.com/rs/113-DTN-266/images/DigitalOcean-Currents_June- 2022.pdf 2. New Research Shows How to Keep Developers Happy Amid the ‘Great Resignation.’ Salesforce News. (2022, April 13). Retrieved, from https://www.salesforce.com/news/stories/new-research-shows-how-to-keep- developers-happy-amid-the-great-resignation/ 3. yerbo. (n.d.). The State of Burnout in Tech. https://yerbo.co/. Retrieved November 23, 2022, from https://f.hubspotusercontent30.net/hubfs/7677235/The%20State%20of%20Burnout%20in%20Tech%20- %202022%20Edition.pdf 4. Ali, J. (2021, July 12). Study to understand the impact of COVID-19 on Software Engineers. Haystack. Retrieved, from https://haystack-books.s3.amazonaws.com/Study+to+understand+the+impact+of+COVID- 19+on+Software+Engineers+-+Full+Report.pdf 5. Gabriel, K. P., & Aguinis, H. (2022). How to prevent and combat employee burnout and create healthier workplaces during crises and beyond. Business Horizons, 65(2), 183-192. 6. Google’s employee turnover rate is surprisingly high. Here’s why it’s great for employees—And possibly even for google—Business news. (2022, June 16). https://biz.crast.net/googles-employee-turnover-rate-is- surprisingly-high-heres-why-its-great-for-employees-and-possibly-even-for-google/ 7. Chamorro-Premuzic, T. (2013). Does money really affect motivation? A review of the research. Harvard Business Review. https://hbr.org/2013/04/does-money-really-affect-motiv 8. Yager, J. (2022, November 15). 10 ways technology can improve employee retention. SHRM. https://www.shrm.org/resourcesandtools/hr-topics/technology/pages/10-ways-technology-can-improve- employee-retention.aspx 9. Kopoulos, A. (2017). Employee Onboarding Best Practices: A Technology Perspective. Alaska Business Monthly, 33(4), 70–71 10. How to find, keep, and develop tech talent | McKinsey. (n.d.). Retrieved from https://www.mckinsey.com/capabilities/mckinsey-digital/our-insights/tech-talent-tectonics-ten-new-realities- for-finding-keeping-and-developing-talent 11. LinkedIn Learning (n.d.). How to Attract and Retain Top Technology Talent. LinkedIn. Retrieved from https://business.linkedin.com/content/dam/me/learning/en-us/pdfs/lil-guide-attract-retain-top-tech-talent.pdf 12. PricewaterhouseCoopers (n.d). Millennials at Work: Reshaping the workplace. PricewaterhouseCoopers. Retrieved from https://www.pwc.com/co/es/publicaciones/assets/millennials-at-work.pdf