It’s always disappointing to lose one of your company’s best people, especially in tech where highly skilled, innovative employees are in high demand. And it happens quite a lot – a recent CIPD report found that 45% of employers feel that the competition for qualified talent has increased since the start of the pandemic.
With demand for certain skill sets now outstripping supply, it could be much more expensive and time-consuming than you imagine to replace an employee. Let’s take a look at the true cost of employee turnover in the tech sector…
The hidden costs of employee turnover in IT and tech
To put a figure on how much it’ll cost you to replace a valued employee, you need to take several things into account.
This includes the logistical costs of recruiting and training up a new employee, including:
- Advertising the role
- HR time to process the replacement
- Recruitment agency fees
- Management time to screen and interview candidates
- Hiring temporary employees to fill the gap before the replacement starts.
There’s also the cost of lost output, while you find a replacement employee and get them up to speed. On average, it takes as long as 28 weeks for a new hire to reach what is known as ‘optimum productivity level’. This could cost your business as much as £25,000 per employee.
So, what’s the figure?
According to a report by Oxford Economics, the average cost per replacement employee in IT & Tech is a whopping £31,808.
This is considerably more than other sectors such as Retail (£20,114) and Media & Advertising (£25,787). It’s only lower than Accountancy (£39,230) and Legal (£39,887), where costs are likely to be higher due to the level of training and certification required – which means higher salaries for qualified professionals.
This cost is affected by all of the factors above, plus the fact that it can often take longer to find tech
staff with the right skills compared to other sectors.
On average, it takes around 21 days to replace a hospitality worker. For a tech-based position, it’s 62 days or more. That’s over two months of lost output, added on top of the costs of recruitment.
Why do tech workers leave?
Ideally, you’ll be looking to avoid having to replace your tech team in the first place. This presents a tricky challenge – how do you encourage your best people to stay? The most obvious answer would seem to be a higher salary, but not all companies can offer this. Furthermore, not all tech professionals are motivated solely by money.
Research by Personio found that nearly 30% of tech workers were considering leaving due to a lack of career progression. The same proportion felt underappreciated, while 25% were frustrated by poor management and 23% were simply bored. A toxic workplace culture contributed to the decision to resign for 21% of those surveyed.
Personio’s Aidan Donnelly told TechRepublic:
“To prevent tech talent leaving, and protect their business, employers need to take time to speak to employees to understand their challenges and needs – and address these accordingly.”
Need help finding and attracting the best talent for your business? Get in touch with our IT recruitment specialists here at ITR Partners, and we’ll deliver a tailored solution to meet your exact needs.
