In recent months, a variety of surveys from the likes of PricewaterhouseCoopers (PwC), Gartner, and Paychex have delivered a torrent of information about what workers — especially those in technology — want. With one in five workers expected to quit their current jobs in the next year, the market for talent is tight and companies are scrambling to keep workers happy. The data offers clues to what smart enterprises can do.
Sometimes it’s as simple as asking employees what they want; in other cases, it could be offering employees remote work options, a decent raise, new skills, or a chance to find meaning in their work.
“If the ‘Great Resignation’ has taught employers anything, it’s to not take their workers for granted,” said Bhushan Sethi, PwC’s People & Organization Joint Global Leader. “Yet many companies risk doing exactly that — whether it’s by not paying close enough attention to skilled workers who are at elevated risk of quitting or by failing to support workers who seek personal fulfilment and meaning at work.
“Workers who feel empowered by their current circumstances — i.e., those with specialized or scarce skills — are ready to test the market,” Sethi said.
Those who plan to jump ship skew heavily toward younger employees, according to a March survey by PwC, findings that were echoed by separate research from Gartner. It found that IT workers under 30 are two and a half times less likely to stay put than those over 50. And IT workers are more inclined than workers in other areas to quit, with IT workers showing a 10.2% lower intent to stay than non-IT employees.
“This is lowest out of all corporate functions,” Gartner said.
That matters because younger workers — Gen Z and Millennials — will make up more than half of the tech workforce by 2025, according to the World Economic Forum. (Gen Z generally applies to those born between 1997 and 2012, meaning the oldest members of that cohort are now roughly 25 years old. Millennials, those between 26 and 41, make up about 37% of the workforce today.)
Tech jobs continue to be unfilled
Even as one in five employees is planning an exit, the average number of unfilled tech jobs has soared to more than 204,000, and that number is growing.
The unemployment rate for tech occupations fell to a near-record low in May, and employer job postings for tech positions passed 443,000, according to an analysis of the latest labor market data by CompTIA, a nonprofit association for the IT industry and workforce.
“The already tight labor market just became even tighter as competition for tech talent reaches near-record levels,” said Tim Herbert, chief research officer at CompTIA. “For any employer relying on the old hiring playbook, it’s time to rethink approaches to recruiting and retention.”
Employers throughout the US economy are stepping up their search for tech workers and tech companies continue to expand payrolls, according CompTIA. Specifically, tech firms added 75,200 workers through the first four months of 2022.
ClearbitMore than 191,000 new IT jobs will be created in 2022, according to IT employment consultancy Janco Associates. The IT job market now has more than 3.85 million positions in the US, with about 130,000 of those positions unfilled, Janco’s most recent report stated.
Janco analyzed exit interviews of 285 IT functions involving 1,203 employees and found that 45% (543) were employed for 24 months or less. Twenty-four months is the point in time an employee is considered snapped in and a full team player — contributing to the success of the enterprise’s IT function.
“Each of these was considered a hiring failure,” Janco said.
Don’t take employees for granted
For its third annual Hopes & Fears Survey, PwC queried 52,195 active workers across 44 countries and territories to identify where companies may falling short in retaining talent. Among other things, PwC found that 44% of tech workers plan to ask for a raise over the next year because they know their skills are in high demand.
When employees seek a raise, what they’re really doing is shopping around and comparing offers from other companies, according to Sethi. And when it comes to salaries, companies must keep up with inflation, which is running at about 8% a year.
But retaining employees requires more than just pay. Workers also want more support in translating environmental, social, and governance (ESG) considerations to their work.
“Fulfilling work and the opportunity to be one’s authentic self at work also matter to employees who are considering a job change," Sethi said. "Pay is table stakes, but I also want my job to be meaningful and fulfilling, and I want to work at a place where I can be myself."
Employees also want workplace flexibility. That, and human-centric work policies, can reduce attrition and increase performance. In fact, Gartner found that 65% of IT employees said that whether they can work flexibly affects their decision to stay at an organization.
The majority of workers (63%) prefer and expect hybrid work options, while 18% expect fully remote work as an option — and 11% prefer full-time remote, according to PwC.
Janco AssociatesWith many workers wanting or expecting remote work, companies next have to scramble to make sure employee benefits are relevant to them. Paychex, a US provider of human resource, payroll, and benefits outsourcing services, surveyed more than a 1,000 employees — from executive through entry-level positions -- to find the perks workers really want. The survey, conducted earlier this year, showed:
- Only 45% of companies had updated their benefits since switching to remote work, and 73% of those asked for employees’ input.
- Flexible working hours and performance bonuses are the most common benefit updates, but home office stipends (31%), internet reimbursement (30%), and a four-day workweek (29%) were what employees really wanted.
- 64% of employees at companies that updated their benefits have no plans to leave within the next year; only 47% of those where benefits hadn’t changed said the same thing.
“The place to start for IT companies would be to survey their employees to see what benefit packages are most desirable to them. Updating benefit packages will not only help with retention, but also attracting new hires,” said Heather Whitney, a human resources coach at Paychex.
With direct feedback, or surveys, find out what workers want
The best practice will likely vary depending on company size. Smaller companies should conduct 1-to-1 meetings between managers and employees for direct feedback. Larger companies might benefit from a company meeting with a poll for employees to select desired benefits.
“Our survey found that employer perception didn’t align with employees for many of the most desired benefits,” Whitney said. “Different generations often want different benefits, so it’s important for companies to survey their employees to ensure they are not missing the mark when it comes to benefit packages.”
For example, only 10% of employers offered internet reimbursement, and 9% offered a home office stipend, according to Paychex. Baby Boomers’ most desirable benefit? A four-day workweek.
When companies updated benefits packages based on employee input, 73% cited “productivity improvements,” the Paychex survey found.
Companies can also find small ways to reward employees more frequently, rather than waiting for performance reviews that may take place just once or twice a year. Bonuses are one option.
A typical performance bonus could be around 3% of gross annual income based on company productivity and are often more feasible in uncertain times when employers are hesitant to offer larger raises that are more permanent, Whitney said.
“Also, sometimes raises feel insignificant to employees as they only receive a small amount per pay period, while a bonus tends to be larger and more impactful,” she said
.Close the skills gap
Skills gaps can also create workplace inequities. High-value skill workers are more likely to feel satisfied, listened to and financially compensated, meaning companies should look for ways to close any skills gap between workforce demographics (i.e., gender and age) through upskilling investments.
“There is an upskilling dividend benefitting companies as they face an uncertain economy," Sethi said. "Retaining the right talented people and enhancing their skills can help them survive today’s challenges and drives competitive advantage in the future.
“In our own firm, we’ve launched a new strategy around people called 'My+,' where we’ll invest in you and build your skills —whether those skills are for PwC or one of our clients at some point,” Sethi said. “People don’t want to stay with one company forever. They want to get experience and move around.
“If they do stay 20 or 25 years and become a general manager or CIO, that’s great,” Sethi said. “But many companies are not designing for that."
Instead, companies should shoot for employees to remain from three to seven years. And that includes proper onboarding and training — a key to employee retention.
“A company needs to plan for workforce attrition and replenishment,” Sethi said. “Today’s employee has a choice. If you’re providing good onboarding and training, young employees will learn when you go to work for firm X, they will make you a more attractive candidate in the future.”